An econometric analysis of the link between irrigation, markets and poverty in Ethiopia: The case of smallholder vegetable and Fruit Production in the North Omo Zone, SNNP Region

This paper examines the anti-poverty impacts of irrigation and markets on the welfare of rural households within the PRISM framework. Specifically, the papers addresses: the magnitude of anti-poverty effects of irrigation and conditions strengthening the poverty-reducing impact of it; and the market constraints of fruit and vegetable producers. The relationship between irrigation, market-orientation of smallholders and poverty is examined using descriptive statistics and multivariate analysis. In the descriptive analysis, low prices for vegetable and fruit, weak demand, lack of price information, and inadequate transportation have been identified as the main limiting factor for output market. The beneficial effect of irrigation, literacy rate of household heads, and extra years of schooling is readily apparent from the regression. A simulation approach is also used to explore the impact of irrigation and other factors, individually and together, on poverty. The results show that although irrigation reduces poverty, the effect is greater when combined with improving the literacy level of households. This evidence calls for policy measures that focus on the concurrent interventions in irrigation, education, markets, and other supporting inputs, thereby reducing poverty in the cash growing rural areas.