The Impact of Agricultural Improvement Intervention Through Market Development on the Livelihoods of Rural Farmers in Ethiopia: A Propensity Score Matching Application

A market development program to enhance production, productivity and income of rural peoples was jointly implemented by the government and NGOs in rural Ethiopia from 2009 to 2012. It was claimed to be successful on different occasions creating an interest among policy makers, development practitioners and researchers to quantify the impacts of the intervention. Acoordingly, in 2013, data were collected from a total of 201 farm households comprising both participating and non-participating but comparative groups of farm households. The current study aimed at answering the questions of what changes were brought in the organizational and institutional aspect of the agricultural input/output marketing in the pilot implementation areas as a result of the intervention and what would have been the market orientation, participation, productivity and income outcomes of participating households if the intervention had not been in place. Using Propensity Score Matching (PSM), after controlling for the initial differences, the result of our impact estimate revealed that the program significantly raised the intensity of input use, productivity, commercial orientation and proportion of sales of most of the commodities of intervention for participant households leading to a significant increase in cumulative net income by about 10%. Although the results have shown that the program had succeeded in achieving the ultimate objective of the program, further research is recommended to elicit information on how the benefits were distributed among the different categories of participants and the relative contribution of each commodities of intervention to the outcome variables.