The Impact of Agricultural Technologies on Poverty and Vulnerability of Smallholders in Ethiopia: Panel Data Analysis

Abstract Despite large-scale public investment on research and technology adoption, as an effort to improve the livelihoods of smallholder farmers, rural poverty and vulnerability remain widespread in Ethiopia. Using three-round panel data between 2012 and 2016, this paper employed fixed effects and multinomial logit models to assess the effect of agricultural technologies and practices on consumption expenditure, poverty and vulnerability. The fixed effects model results indicate that use of chemical fertilizer, pesticides, improved seed, terracing and irrigation significantly influenced per capita consumption expenditure. The multinomial logit marginal effect estimates shows likelihood of chronic poverty decreased with the use of improved seed, chemical fertilizer, and contour plough, whereas, the use of irrigation reduced the likelihood of being vulnerable. We therefore conclude that agricultural technology dissemination through government supported programs has substantial dynamic benefits in reducing poverty and vulnerability. We suggest that much more intervention is needed to ensure that poor households exit poverty and protect the vulnerable from falling into poverty over time. It is crucial that smallholder farmer s especially the poor and the vulnerable households access to agricultural technologies and infrastructure (roads and irrigation) be improved. Keywords: vulnerability, poverty, technology adoption, Ethiopia Acknowledgement : Acknowledgment We thank the Deutsche Forschungsgeminschaft (DFG) for funding this research project. We are also grateful the International Food Policy Research Institute (IFPRI) in Addis Ababa for supportive equipments during the initial follow up survey year and providing us the baseline data.