The impact of home-grown economic reform intervention on crop productivity in Ethiopia

The present study aims to examine the impact of home-grown economic reform (HGER) program treatment on crop productivity in kilogram per hectare (CYKGHA1), utilizing balanced macro-panel data from 1974 to 2023 with 1300 total observations. The fixed effect and difference-in-differences (DID) models were employed sequentially to examine the relationship between variables and the parallel trend assumptions, while the synthetic control model (SCM) was used to assess the policy’s impact on CYKGHA1. As per the result, the fixed effect model results reveal that average rainfall, fertilizer use, agricultural employment, and gross domestic savings all have a positive influence on CYKGHA1. The age dependency ratio has a detrimental influence on productivity, and the ATET is estimated at 341.494 in kilograms per hectare (kg/ha), indicating a significant increase in CYKGHA1. Before the use of HGER intervention, the actual and synthetic CYKGHA1 in the SCM result exhibit consistent production patterns, with yields ranging from 750 kg/ha to 1000 kg/ha. Following the 2019 treatment, Ethiopia’s CYKGHA1 in farming grew significantly, hitting 2900 kg/ha, which is closest to the lower limit of CYKGHA1's potential of 3000 kg/ha. This indicates Ethiopia’s CYKGHA1 (2900 kg/ha) is lower than the lower limit of production potential (3000 kg/ha). Consequently, the innovatively combined multiple methods with long panel data found Ethiopia’s HGER considerably increased CYKGHA1 towards its potential. Thus, to maintain viable CYKGHA1 by considering climate-responsive policies and key crop production opportunity costs, the application of HGER treatment scale-up to other similar control units and in the study area is recommended to feed the growing population.