Impact of modern irrigation on household production and welfare outcomes: Evidence from the PASIDP project in Ethiopia

Investments in irrigation have been shown to substantially improve farmers' agricultural outcomes and alleviate poverty. Our study provides an example of such investment, the Participatory Small-Scale Irrigation Development Programme (PASIDP) in Ethiopia. Combining a primary household survey with detailed geographical information, we estimate the impact of the project on agricultural production and households expenditures using a novel quasi-experimental approach. Beneficiaries gain from the project through improved crop yields, which raise revenues, and allow switching from relying mainly consuming their own produce to purchasing greater amount of food from the market. Though we rule out that the project may have targeted farmers based on their agricultural performance, summary statistics indicate notable differences between beneficiaries and non-beneficiaries, an indication that the project might have systematically targeted farmers with certain attributes. Systematic targeting is often favoured either to ensure the highest rate of success, or to deliver the project to those who may need it the most, but may limit the generalizability of the project in relation to any efforts to scaling up.