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Does fertilizer use respond to rainfall variability? Panel data evidence from Ethiopia

  • Yonas Alem
  • Mintewab Bezabih
  • Menale Kassie
  • Precious Zikhali

In this article, we use farmers' actual experiences with changes in rainfall levels and their responses to these changes to assess whether patterns of fertilizer use are responsive to changes in rainfall patterns. Using panel data from the Central Highlands of Ethiopia matched with corresponding village-level rainfall data, the results show that the intensity of current year's fertilizer use is positively associated with higher rainfall levels experienced in the previous year. Rainfall variability, on the other hand, impacts fertilizer use decisions negatively, implying that variability raises the risks and uncertainty associated with fertilizer use. Abundant rainfall in the previous year could depict relaxed liquidity constraints and increased affordability of fertilizer, which makes rainfall availability critical in severely credit-constrained environments. In light of similar existing literature, the major contribution of the study is that it uses panel data to explicitly examine farmers' responses to actual weather changes and variability. Copyright (c) 2010 International Association of Agricultural Economists.

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Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

Volume (Year): 41 (2010)
Issue (Month): 2 (03)
Pages: 165-175

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Handle: RePEc:bla:agecon:v:41:y:2010:i:2:p:165-175
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  1. Russell L. Lamb, 2003. "Fertilizer Use, Risk, and Off-Farm Labor Markets in the Semi-Arid Tropics of India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 359-371.
  2. Stefan Dercon, 2000. "Income risk, coping strategies and safety nets," Economics Series Working Papers WPS/2000-26, University of Oxford, Department of Economics.
  3. Stefan Dercon, 2003. "Growth and Shocks: evidence from rural Ethiopia," CSAE Working Paper Series 2003-12, Centre for the Study of African Economies, University of Oxford.
  4. 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.
  5. John Hoddinott, 2006. "Shocks and their consequences across and within households in Rural Zimbabwe," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 301-321.
  6. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
  7. Seo, S. Niggol & Mendelsohn, Robert, 2008. "An analysis of crop choice: Adapting to climate change in South American farms," Ecological Economics, Elsevier, vol. 67(1), pages 109-116, August.
  8. Clay, Daniel & Reardon, Thomas & Kangasniemi, Jaakko, 1998. "Sustainable Intensification in the Highland Tropics: Rwandan Farmers' Investments in Land Conservation and Soil Fertility," Economic Development and Cultural Change, University of Chicago Press, vol. 46(2), pages 351-77, January.
  9. Shively, Gerald E., 1997. "Consumption risk, farm characteristics, and soil conservation adoption among low-income farmers in the Philippines," Agricultural Economics, Blackwell, vol. 17(2-3), pages 165-177, December.
  10. Fufa, B. & Hassan, Rashid M., 2006. "Determinants of fertilizer use on maize in Eastern Ethiopia: A weighted endogenous sampling analysis of the extent and intensity of adoption," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(1), March.
  11. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
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