Economic Analysis of Smallholder Vegetable Production in Tigary, Ethiopia. A Case of IPMS’s Alamata Wereda Pilot learning Project

To examine the determining factors on smallholder vegetable producers’ adoption decision to use the new agricultural technology or not, and to interpret the smallholder’s response to this new technology adoption decision in relation to the determining factors, this thesis involves the robust logit model estimation, and elasticity after logit model estimation. To see the impact of the project intervention in the pilot learning Wereda and the trend of vegetable production starting 2004 to 2009 in the area, Heckman treatment effect model and descriptive statistics are estimated (used) respectively. In the robust logit estimation, the study found that education level of the respondent, water sources accessibility, household land holding size, access to credit and households with no experience to employ man labor to their farm activity revealed positive effect while age of the household head, distance of the farm area from the local market (Alamata) and the practice of renting in land for producing vegetable output revealed negative effect on new agricultural technology adoption decisions. The Heckman treatment effect estimation robust our principal hypothesis where our principal hypothesis is project participation has positive effect on the profitability of the project participant and in return this profitability can affect the utility of the smallholder positively which is basically assumed as impact of the project. Besides, membership of any association or farmers’ cooperatives, farmer’s future output market price expectation, being married or coupled and male sex variables indicates positive effect on profitability of the smallholder vegetable producer. Keywords: new agricultural technology, adoption decision, smallholder, vegetable