Agricultural Technology Adoption and Rural Poverty: a Study on Smallholders in Amhara Regional State, Ethiopia

Poverty has remained to be the major development and policy challenge in Ethiopia. Studies indicate that poverty is higher in rural areas in all its measures. Since small holder agriculture is the mainstay of rural dwellers, policies of the country intended to give priority to increasing the productivity of agriculture to challenge rural poverty. Consequently, different strategies were put in place since the 1994 reform period. Under the growth and transformation plan, whose tenure has just come to an end, intensification (through adoption of agricultural technologies) and structural change were sought to bring about small holder ‘productivity revolution’ for a transformative growth in the sector and poverty reduction. Agricultural technology adoption is however limited in the country with greater geographical differences. We analyze smallholders’ propensity to and intensity of agricultural technology adoption in Amhara Regional State using Double-Hurdle Model to identify the relative importance of the factors that explain the underlying choice. A modest attempt is also made to link technology adoption to household welfare using matching techniques of impact evaluation. The study is based on the Ethiopian Socioeconomic Survey (ESS, 2013/14) data of the Living Standards Measurement Study. The results corroborate the importance of policy support schemes, input market and physical infrastructure, poverty [capacity] to explain agricultural technology adoption. Considerable evidence on the positive welfare impact of technology adoption is documented which entails a tenable link between technology adoption and poverty reduction. However, a comprehensive policy framework is needed to tackle the capacity and physical access constraints to promote agricultural technology adoption.