Smallholder farmers' risk management and innovation strategies and their impacts on poverty and resilience
Final Report Abstract
This research project studied agricultural technology adoption, risk preferences, and risk management strategies in Ethiopian rural smallholder farms. The main objective was to identify the constraints to the adoption of major agricultural innovations under particular consideration of risk preferences, intra-household decision-making, and the role of social networks. Furthermore, the study of the welfare impacts of various agricultural innovations at the household level was of significant importance for this research project. This research captured the risk preferences of main male and female decision-makers in smallholder farm households. Rural women were more risk-averse than men, and this has been identified via risk game. Respondents’ self-assessments also showed that females consider themselves more risk-averse than males do. Considering that rural households view technology adoption as a risky decision to make, implications of risk preferences were analysed. It is estimated that the main female decision-maker’s risk preference is an essential determinant of the adoption extends of high-yielding varieties in rural Ethiopian households. Moreover, in rural smallholder farms, adoption decision is mainly determined by access to an extension that indicates the importance of knowledge acquisition and road access that suggests the potential for selling surplus produce and accessing inputs. Wealth is an important factor, and the poorest tercile of households are disadvantaged considering that agricultural innovations like high-yielding variety seeds and their production are costly. Nevertheless, improved seed varieties and chemical fertilizer are the most popular technologies adopted by sampled households. Moreover, the role of social networks is also vital to consider for the dissemination of such innovations. In one-third of the sampled rural households, the primary decision-maker solely decides on the numerous matters of agricultural production. The decisions usually relate to which crop(s) to produce, what to do with the harvest, which inputs to use, and purchases and sales of livestock. This decision-making behaviour is also often observed in decisions related to the adoption of agricultural innovations. Female voices heard and preferences declared in domestic decisionmaking are linked to improved diversified food consumption and agricultural production. Furthermore, diversified production is a risk management strategy that sample households extensively adopt. Over the years, sample farmers have significantly increased the diversity in their farms. The findings show that diversified farm production is linked to positive dietary outcomes in rural households that are subsistence-oriented, located remote to the markets, and have none or little non-farm income. In conclusion, the output of this research project can be considered very high. The project outputs include two doctoral dissertations, six articles published in international peer-reviewed journals, nine master theses, and ten presentations in international conferences and seminars. Moreover, overall, the hypotheses of this research project have been empirically confirmed. As hypothesized, agricultural technology adoption has positively contributed to households' resilience and decreased their vulnerability to poverty over the years. Moreover, farmers' risk aversion and social networks proved to be essential factors to consider for the successful dissemination of agricultural innovations. Findings from this research project are now especially relevant because the recent outbreak of pandemics has put millions of people at risk of falling into extreme poverty around the world. Innovations in agriculture can sustain the resilience of rural poor and decrease their probability of falling into extreme poverty.
Publications
- (2017). Social capital and agricultural technology adoption among Ethiopian farmers. American Journal of Rural Development, 5(3), 65-72
Husen, N. A., Loos, T.K., & Siddig, K.H.A.
(See online at https://doi.org/10.12691/ajrd-5-3-2) - (2019). The impact of agricultural technologies on poverty and vulnerability of smallholders in Ethiopia: A Panel Data Analysis. Social Indicators Research, 147(2), 517-544
Biru, W. D., Zeller, M., & Loos, T. K.
(See online at https://doi.org/10.1007/s11205-019-02166-0) - (2020). Gender differences in risk behavior and the link to household effects and individual wealth. Journal of Economic Psychology, 80, 102266
Khor, L. Y., Sariyev, O., & Loos, T.
(See online at https://doi.org/10.1016/j.joep.2020.102266) - (2020). Women’s participation in decision-making and its implications for human capital investment. European Review of Agricultural Economics, 47(5), 1803-1825
Sariyev, O., Loos, T. K., & Zeller, M.
(See online at https://doi.org/10.1093/erae/jbaa008) - (2021). An analysis of gender in intra-household decision-making as an important socio-economic factor in agriculture-nutrition linkages (Doctoral dissertation, University of Hohenheim, Stuttgart, Germany)
Sariyev, O.
- (2021). Intra-household decision-making, production diversity, and dietary quality: a panel data analysis of Ethiopian rural households. Food Security, 13(1), 181-197
Sariyev, O., Loos, T. K., & Khor, L. Y.
(See online at https://doi.org/10.1007/s12571-020-01098-9) - (2021). On- and off-farm diversification and travel time to markets: linkages to food security in rural Ethiopia. The European Journal of Development Research, 1-18
Bergau, S., Loos, T. K., & Sariyev, O.
(See online at https://doi.org/10.1057/s41287-021-00475-0) - (2021). The impact of agricultural innovation systems on poverty and food security of smallholder farmers in Ethiopia (doctoral dissertation). University of Hohenheim, Stuttgart, Germany
Biru, W. D.
