IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i14p3952-d250113.html
   My bibliography  Save this article

Household Welfare Implications of Better Fertilizer Access and Lower Use Inefficiency: Long-Term Scenarios for Ethiopia

Author

Listed:
  • Ermias Engida Legesse

    (Institute for Food and Resource Economics, University of Bonn, Nussallee 21, 53115 Bonn, Germany)

  • Amit Kumar Srivastava

    (Institute of Crop Science and Resource Conservation, University of Bonn, Katzenburgweg 5, D-53115 Bonn, Germany)

  • Arnim Kuhn

    (Institute for Food and Resource Economics, University of Bonn, Nussallee 21, 53115 Bonn, Germany)

  • Thomas Gaiser

    (Institute of Crop Science and Resource Conservation, University of Bonn, Katzenburgweg 5, D-53115 Bonn, Germany)

Abstract

High population growth in Ethiopia is aggravating farmland scarcity, as the agrarian share of the population stays persistently high, and also creates increasing demand for food and non-food biomass. Based on this fact, this study investigates welfare implications of intensification measures like interventions that improve access and use efficiency to modern farming inputs. Using a dynamic meso-economic modeling framework for Ethiopia, ex-ante scenarios that simulate a) decreased costs of fertilizer use and b) elevated efficiency of fertilizer application for all crops are run for a period of 20 years. Fertilizer-yield response functions are estimated (based on results from an agronomic crop model and actual survey data) and embedded into the economic model in order to get realistic marginal returns to fertilizer application. This is our novel methodological contribution in which we introduce how to calculate input use inefficiency based on attainable yield levels from agronomic crop model and actual yield levels. Simultaneous implementation of these interventions lead to annual yield increases of 8.7 percent for an average crop farmer compared to the current level. Increased fertilizer application is also found to be profitable for an average farmer despite price reduction for crops following increased market supply. As a result of price and income effects of the interventions, all household types exhibit welfare gain. Non-farming households, being net consumers, enjoy lower costs of living. Rural farming households enjoy even higher welfare gain than non-farming households because they consume a higher share from crop commodities that become cheaper, and because their farming profits increase.

Suggested Citation

  • Ermias Engida Legesse & Amit Kumar Srivastava & Arnim Kuhn & Thomas Gaiser, 2019. "Household Welfare Implications of Better Fertilizer Access and Lower Use Inefficiency: Long-Term Scenarios for Ethiopia," Sustainability, MDPI, vol. 11(14), pages 1-24, July.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:14:p:3952-:d:250113
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/14/3952/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/11/14/3952/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-488, May.
    2. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," ESSP working papers 29, International Food Policy Research Institute (IFPRI).
    3. Gaiser, Thomas & Perkons, Ute & Küpper, Paul Martin & Kautz, Timo & Uteau-Puschmann, Daniel & Ewert, Frank & Enders, Andreas & Krauss, Gunther, 2013. "Modeling biopore effects on root growth and biomass production on soils with pronounced sub-soil clay accumulation," Ecological Modelling, Elsevier, vol. 256(C), pages 6-15.
    4. Channing Arndt & Karl Pauw & James Thurlow, 2016. "The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 962-980.
    5. Spielman, David J. & Mekonnen, Dawit Kelemework & Alemu, Dawit, 2012. "Seed, fertilizer, and agricultural extension in Ethiopia," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 4, International Food Policy Research Institute (IFPRI).
    6. Engida, Ermias & Tamru, Seneshaw & Tsehaye, Eyasu & Debowicz, Dario & Dorosh, Paul A. & Robinson, Sherman, 2011. "Ethiopia’s growth and transformation plan: A computable general equilibrium analysis of alternative financing options," ESSP working papers 30, International Food Policy Research Institute (IFPRI).
    7. Srivastava, Amit Kumar & Mboh, Cho Miltin & Gaiser, Thomas & Kuhn, Arnim & Ermias, Engida & Ewert, Frank, 2019. "Effect of mineral fertilizer on rain water and radiation use efficiencies for maize yield and stover biomass productivity in Ethiopia," Agricultural Systems, Elsevier, vol. 168(C), pages 88-100.
    8. Bold, Tessa & Kaizzi, Kayuki C. & Svensson, Jakob & Yanagizawa-Drott, David, 2015. "Low Quality, Low Returns, Low Adoption: Evidence from the Market for Fertilizer and Hybrid Seed in Uganda," Working Paper Series rwp15-033, Harvard University, John F. Kennedy School of Government.
    9. Demeke, Mulat & Kelly, Valerie A. & Jayne, Thomas S. & Said, Ali & Le Vallee, Jean-Charles & Chen, H., 1998. "Agricultural Market Performance and Determinants of Fertilizer Use in Ethiopia," Food Security Collaborative Working Papers 55599, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    10. Yu, Bingxin & Nin-Pratt, Alejandro & Funes, José & Gemessa, Sinafikeh Asrat, 2011. "Cereal production and technology adoption in Ethiopia:," IFPRI discussion papers 1131, International Food Policy Research Institute (IFPRI).
    11. Jaleta, Moti & Kassie, Menale & Shiferaw, Bekele, 2013. "Tradeoffs in crop residue utilization in mixed crop–livestock systems and implications for conservation agriculture," Agricultural Systems, Elsevier, vol. 121(C), pages 96-105.
    12. Berhane, Guush & Paulos, Zelekawork & Tafere, Kibrom & Tamru, Seneshaw, 2011. "Foodgrain consumption and calorie intake patterns in Ethiopia:," ESSP working papers 23, International Food Policy Research Institute (IFPRI).
    13. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," IFPRI discussion papers 1106, International Food Policy Research Institute (IFPRI).
    14. Bart Minten & Bethlehem Koru & David Stifel, 2013. "The last mile(s) in modern input distribution: Pricing, profitability, and adoption," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 629-646, November.
    15. Kassie, Menale & Shiferaw, Bekele & Muricho, Geoffrey, 2011. "Agricultural Technology, Crop Income, and Poverty Alleviation in Uganda," World Development, Elsevier, vol. 39(10), pages 1784-1795.
    16. Jayne, T.S. & Chamberlin, Jordan & Headey, Derek D., 2014. "Land pressures, the evolution of farming systems, and development strategies in Africa: A synthesis," Food Policy, Elsevier, vol. 48(C), pages 1-17.
    17. Becerril, Javier & Abdulai, Awudu, 2010. "The Impact of Improved Maize Varieties on Poverty in Mexico: A Propensity Score-Matching Approach," World Development, Elsevier, vol. 38(7), pages 1024-1035, July.
    18. Minten, Bart & Barrett, Christopher B., 2008. "Agricultural Technology, Productivity, and Poverty in Madagascar," World Development, Elsevier, vol. 36(5), pages 797-822, May.
    19. Verkaart, Simone & Munyua, Bernard G. & Mausch, Kai & Michler, Jeffrey D., 2017. "Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?," Food Policy, Elsevier, vol. 66(C), pages 50-61.
    20. Martins, Pedro, 2014. "Structural change in Ethiopia : an employment perspective," Policy Research Working Paper Series 6749, The World Bank.
    21. Zerfu, Daniel & Larson, Donald F., 2010. "Incomplete markets and fertilizer use : evidence from Ethiopia," Policy Research Working Paper Series 5235, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mesele Belay Zegeye & Getamesay Bekele Meshesha, 2022. "Estimating the impact of fertilizer adoption on poverty in rural Ethiopia: an endogenous switching regression approach," Asia-Pacific Journal of Regional Science, Springer, vol. 6(2), pages 713-733, June.
    2. Haoye Sun & Thorsten Teichert, 2024. "Scarcity in today´s consumer markets: scoping the research landscape by author keywords," Management Review Quarterly, Springer, vol. 74(1), pages 93-120, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Felister Y. Tibamanya & Mursali A. Milanzi & Arne Henningsen, 2021. "Drivers of and Barriers to Adoption of Improved Sun- flower Varieties amongst Smallholder Farmers in Singida, Tanzania: the Double-Hurdle Approach," IFRO Working Paper 2021/03, University of Copenhagen, Department of Food and Resource Economics.
    2. Bachewe, Fantu Nisrane & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu Seyoum, 2015. "Agricultural growth in Ethiopia (2004-2014): Evidence and drivers:," ESSP working papers 81, International Food Policy Research Institute (IFPRI).
    3. Kazushi Takahashi & Rie Muraoka & Keijiro Otsuka, 2020. "Technology adoption, impact, and extension in developing countries’ agriculture: A review of the recent literature," Agricultural Economics, International Association of Agricultural Economists, vol. 51(1), pages 31-45, January.
    4. Bachewe, Fantu N. & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu S., 2018. "Agricultural Transformation in Africa? Assessing the Evidence in Ethiopia," World Development, Elsevier, vol. 105(C), pages 286-298.
    5. Goundan, Anatole & Faye, Amy & Henning, Christian H. C. A. & Collins-Sowah, Peron A., 2020. "Investing in risky inputs in Senegal: Implications for farm profit and food production," Working Papers of Agricultural Policy WP2020-07, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    6. Musa Hasen Ahmed & Kassahun Mamo Geleta & Aemro Tazeze & Hiwot Mekonnen Mesfin & Eden Andualem Tilahun, 2017. "Cropping systems diversification, improved seed, manure and inorganic fertilizer adoption by maize producers of eastern Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-16, December.
    7. Wainaina, Priscilla Wairimu & Tongruksawattana, Songporne & Qaim, Matin, 2014. "Improved seeds, fertilizer or natural resource management? Evidence from Kenya’s smallholder maize farmers," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182644, European Association of Agricultural Economists.
    8. Raju Ghimire & Wen-Chi Huang, 2015. "Household wealth and adoption of improved maize varieties in Nepal: a double-hurdle approach," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 7(6), pages 1321-1335, December.
    9. Vandercasteelen, Joachim & Beyene, Seneshaw Tamru & Minten, Bart & Swinnen, Johan, 2018. "Cities and agricultural transformation in Africa: Evidence from Ethiopia," World Development, Elsevier, vol. 105(C), pages 383-399.
    10. Kostandini, Genti & La Rovere, Roberto & Abdoulaye, Tahirou, 2013. "Potential impacts of increasing average yields and reducing maize yield variability in Africa," Food Policy, Elsevier, vol. 43(C), pages 213-226.
    11. Bairagi, Subir & Bhandari, Humnath & Kumar Das, Subrata & Mohanty, Samarendu, 2021. "Flood-tolerant rice improves climate resilience, profitability, and household consumption in Bangladesh," Food Policy, Elsevier, vol. 105(C).
    12. Lambrecht, Isabel & Vanlauwe, Bernard & Maertens, Miet, 2014. "What is the sense of gender targeting in agricultural extension programs? Evidence from eastern DR Congo," Working Papers 167158, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    13. Mukasa Adamon N., 2016. "Working Paper 233 - Technology Adoption and Risk Exposure among Smallholder Farmers: Panel Data Evidence from Tanzania and Uganda," Working Paper Series 2328, African Development Bank.
    14. Tufa, Adane Hirpa & Alene, Arega D. & Manda, Julius & Akinwale, M.G. & Chikoye, David & Feleke, Shiferaw & Wossen, Tesfamicheal & Manyong, Victor, 2019. "The productivity and income effects of adoption of improved soybean varieties and agronomic practices in Malawi," World Development, Elsevier, vol. 124(C), pages 1-1.
    15. Khonje, Makaiko & Mkandawire, Petros & Manda, Julius & Alene, Arega, 2015. "Analysis of adoption and impacts of improved cassava varieties," 2015 Conference, August 9-14, 2015, Milan, Italy 211842, International Association of Agricultural Economists.
    16. Santosh K. Sahu & Sukanya Das, 2016. "Impact of Agricultural Related Technology Adoption on Poverty: A Study of Select Households in Rural India," India Studies in Business and Economics, in: N.S. Siddharthan & K. Narayanan (ed.), Technology, pages 141-156, Springer.
    17. Shiferaw, Bekele & Kassie, Menale & Jaleta, Moti & Yirga, Chilot, 2014. "Adoption of improved wheat varieties and impacts on household food security in Ethiopia," Food Policy, Elsevier, vol. 44(C), pages 272-284.
    18. Abate, Gashaw Tadesse & Rashid, Shahidur & Borzaga, Carlos & Getnet, Kindie, 2015. "Rural finance and agricultural technology adoption in Ethiopia: Does institutional design matter?:," IFPRI discussion papers 1422, International Food Policy Research Institute (IFPRI).
    19. Lambrecht, Isabel & Vanlauwe, Bernard & Maertens, Miet, 2014. "Agricultural extension in eastern DR Congo: Does Gender Matter?," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182731, European Association of Agricultural Economists.
    20. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," ESSP working papers 29, International Food Policy Research Institute (IFPRI).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:14:p:3952-:d:250113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.