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Does Intensive Tillage Enhance Productivity and Reduce Risk Exposure? Panel Data Evidence from Smallholders’ Agriculture in Ethiopia
Author(s) -
Abro Zewdu Ayalew,
Jaleta Moti,
Teklewold Hailemariam
Publication year - 2018
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/1477-9552.12262
Subject(s) - tillage , productivity , panel data , incentive , production (economics) , agricultural productivity , economics , agriculture , agricultural economics , selection bias , agricultural science , environmental science , econometrics , microeconomics , geography , mathematics , agronomy , statistics , archaeology , biology , macroeconomics
We analyse the impact of intensity of tillage on wheat productivity and risk exposure using panel household‐plot level data from Ethiopia. In order to control for selection bias, we estimate a flexible moment‐based production function using an endogenous switching regression treatment effects model. We find that tillage has a complementary impact on productivity and risk exposure. As the intensity of tillage increases, productivity increases and farmers’ exposure to risk declines. Our results suggest that smallholder farmers use tillage as an ex‐ante risk management strategy. The main policy implication of this study is that the opportunity cost of switching to reduced tillage in wheat production seem rather high unless farmers are supported by appropriate incentive schemes.