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Does Fertilizer Use Respond to Rainfall Variability? Panel Data Evidence from Ethiopia

Author

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  • Alem, Yonas

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Bezabih, Mintewab

    () (Department of Economics, University of Portsmouth, UK)

  • Kassie, Menale

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Zikhali, Precious

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

In this paper we use farmers' actual experiences with changes in rainfall levels and their responses to these changes to assess if patterns of fertilizer use are responsive to changes in rainfall patterns. Using plot and farm level panel data from the central Highlands of Ethiopia matched with corresponding village level rainfall data; results show that both the current year’s decision to adopt and the intensity of fertilizer adoption is positively associated with higher rainfall levels experienced in the previous year. Furthermore, we find a concave relationship between previous season rainfall levels and fertilizer adoption, indicating that too much rainfall discourages adoption. 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 its use of plot level panel data, which permits us to investigate the importance of plot characteristics in fertilizer adoption decisions.

Suggested Citation

  • Alem, Yonas & Bezabih, Mintewab & Kassie, Menale & Zikhali, Precious, 2009. "Does Fertilizer Use Respond to Rainfall Variability? Panel Data Evidence from Ethiopia," Working Papers in Economics 337, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0337
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    References listed on IDEAS

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    Cited by:

    1. Bumb, Balu L. & Johnson, Michael E. & Fuentes, Porfirio A., 2011. "Policy options for improving regional fertilizer markets in West Africa:," IFPRI discussion papers 1084, International Food Policy Research Institute (IFPRI).
    2. Ayenew, Habtamu Yesigat & Sauer, Johannes & Abate-Kassa, Getachew, 2015. "Expossure To Risk And Risk Management In Smallholder Agriculture," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209211, German Association of Agricultural Economists (GEWISOLA).
    3. Yonas Alem & Håkan Eggert & Remidius Ruhinduka, 2015. "Improving Welfare Through Climate-Friendly Agriculture: The Case of the System of Rice Intensification," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 243-263.
    4. Alem, Yonas & Maurel, Mathilde & Millock, Katrin, 2016. "Migration as an Adaptation Strategy to Weather Variability: An Instrumental Variables Probit Analysis," Working Papers in Economics 665, University of Gothenburg, Department of Economics.
    5. Villegas, Laura & Smith, Vincent H. & Atwood, Joe & Belasco, Eric, 2. "Does Participation In Public Works Programs Encourage Fertilizer Use In Rural Ethiopia?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2).
    6. Larson, Donald F. & Gurara, Daniel Zerfu, 2013. "A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia," Policy Research Working Paper Series 6681, The World Bank.
    7. Leonie & Christina Gravert, 2015. "Grit Trumps Talent? An experimental approach," Economics Working Papers 2015-18, Department of Economics and Business Economics, Aarhus University.
    8. Khor, Ling & Ufer, Susanne & Nielsen, Thea & Zeller, Manfred, 2015. "The Influence of Individual Risk Behavior on Fertilizer Use Decision in Vietnam," 2015 Conference, August 9-14, 2015, Milan, Italy 211844, International Association of Agricultural Economists.
    9. Kefyalew Endale, 2011. "Fertilizer Consumption and Agricultural Productivity in Ethiopia," Working Papers 003, Ethiopian Development Research Institute.
    10. Wakeyo, Mekonnen B. & Gardebroek, Cornelis, 2013. "Does water harvesting induce fertilizer use among smallholders? Evidence from Ethiopia," Agricultural Systems, Elsevier, pages 54-63.
    11. repec:bla:agecon:v:48:y:2017:i:6:p:693-706 is not listed on IDEAS
    12. Ayenew, Habtamu Yesigat & Sauer, Johannes & Abate-Kassa, Getachew, 2016. "Cost of Risk Exposure, Farm Disinvestment and Adaptation to Climate Uncertainties: The Case of Arable Farms in the EU," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235595, Agricultural and Applied Economics Association.
    13. repec:eee:wdevel:v:98:y:2017:i:c:p:447-466 is not listed on IDEAS
    14. Aizhen Li & Boris E. Bravo-Ureta & David K. Okello & Carl M. Deom & Naveen Puppala, 2013. "Groundnut Production and Climatic Variability: Evidence from Uganda," Working Papers 17, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    15. Sauer, Johannes & Finger, Robert, 2014. "Climate Risk Management Strategies in Agriculture – The Case of Flood Risk," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172679, Agricultural and Applied Economics Association.
    16. Monjardino, M. & McBeath, T. & Ouzman, J. & Llewellyn, R. & Jones, B., 2015. "Farmer risk-aversion limits closure of yield and profit gaps: A study of nitrogen management in the southern Australian wheatbelt," Agricultural Systems, Elsevier, pages 108-118.
    17. Holden, Stein T. & Westberg, Nina Bruvik, 2016. "Exploring technology use under climate risk and shocks through an experimental lens," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(1), March.
    18. Temesgen Tadesse Deressa, 2011. "Effects of climatic conditions and agro-ecological settings on the productive efficiencies of small-holder farmers in Ethopia," Working Papers 223, Economic Research Southern Africa.
    19. Khor, Ling & Zeller, Manfred, 2015. "Perception of Substandard Fertilizer and Its Impact on Use Intensity," 2015 Conference, August 9-14, 2015, Milan, Italy 211843, International Association of Agricultural Economists.
    20. Murray, Anthony G & Farrin, Katie, 2014. "The Effect of Index Insurance on Returns to Farm Inputs: Exploring Alternatives to Zambia's Fertilizer Subsidy Program," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170240, Agricultural and Applied Economics Association.
    21. Alem, Yonas & Broussard, Nzinga H., 2013. "Do Safety Nets Promote Technology Adoption? Panel data evidence from rural Ethiopia," Working Papers in Economics 556, University of Gothenburg, Department of Economics.
    22. Mintewab Bezabih & Remidius Ruhinduka & Mare Sarr, 2016. "Climate change perception and system of rice intensification (SRI) impact on dispersion and downside risk: a moment approximation approach," GRI Working Papers 256, Grantham Research Institute on Climate Change and the Environment.
    23. Murray, Anthony G & Mills, Bradford F, 2014. "Estimating the Resiliency of Zambian Smallholder Farmers: Evidence from a Three-Wave Panel," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170234, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Fertiliser adoption; Rainfall; Highlands of Ethiopia; Panel data;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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