Letters in Economic Research Updates
Assessing the Impact of Cluster Farming on Productivity and Commercialization in Ethiopia: An Analysis Using Propensity Score Matching
Abstract
Yonnas Addis Mihertea
Smallholder farmers with limited resources can sustain their agricultural farming through cluster farming, however many smallholder farmers are still indeterminate to the impact of cluster farming in Ethiopia. In this study, the impact of teff cluster farming participation on productivity and commercialization in Central Ethiopia, particularly in Sodo district of Guraghe Zone. The study employed a cross�?�sectional survey of 196 households (92 participants; 104 non�?�participants), selected through multistage sampling procedure. The data used in this study were collected in 2021/22 production year. Family size positively influence teff cluster farming participation and it was statistically significant at 10% level. Credit accesses, and off farm income positively determine teff cluster farming participation at 1% level of significance. On the other hand the age and educational level of a household negatively influence smallholder teff farmer’s participation in cluster farming and this was statistically significant at 5% level. A probit model estimates propensity scores and nearest�?�neighbor matching (k=2 chosen from several algorithms) is used to estimate ATT effects. The study revealed positive, statistically significant impacts of cluster farming on productivity (≈ +2.25 qt/ha) and commercialization (≈ +6.58 percentage points). The study suggests the positive role of cluster farming in boosting agricultural productivity and farmer’s level of commercialization. Strengthen institutional service provisional mechanisms and building skill for family labour management through diverse strategies is essential for scaling up cluster farming participation and thereby farm level productivity and commercialization.