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An Analysis of the Impact of Climate Variation on Cereal Crops

Productivity in Central Ethiopia


Oumer BERISSO
Department of Economics,
College of Business and Economics,
Addis Ababa University, Ethiopia
E-mail: ub_ansha@yahoo.com
March 12, 2016

Abstract
This study investigates the impacts of climate variation on cereal crop productivity over a period
of 15 years in Ethiopia. Consistent with previous productivity studies in sub-Saharan Africa, the
study confirmed the importance and strong dependence between most of the climate related
variables and cereal crops productivity. Descriptive statistics show that average annual rainfall,
and maximum temperature decrease over time in all three agro-ecological zones considered in
the study. Panel data estimation results indicated which inputs significantly enhance cereal crops
productivity and which ones including climate variables (temperature and rainfall) influences
cereal crops productivity negatively. Moreover, regression result shows evidence of agroecological differences and crop productivity regress over time. These findings are important and
can be used to initiate different government policy options when planning climate change
adaptation strategies and agricultural policies tailored to support various agro-ecological zones
across the country. The study recommends that policies that would improve extension services,
farmers education, supply of agricultural production inputs and developing climate change
adaptation strategies suitable designed to meet the needs of different agro ecological zones
should be pursued.
Keywords: Climate variation; cereal crops productivity; agro-ecological zone; panel data; rural
Ethiopia;
JEL Classification Codes: D24; O13; O33; O47; Q12; Q54

1. INTRODUCTION
Research findings on climate change have revealed that climate variability and change have
significant impacts on global and regional food production systems particularly on the
productivity of common staple food crops in the tropical sub-humid climatic zone (UNOHRLLS, 2009). This results in reduced food production, leading to higher food prices and
making food less affordable for poor people and consequently to food insecurity by affecting the
four key dimensions of food security; i.e. food availability, access, stability and utilization
dimensions.
Ethiopia is a highly populated agrarian economy in Africa; dominated by subsistent farmers
making it one of the most vulnerable countries to climate variability in the continent. Agriculture
is an important sector in Ethiopia, as it directly provides employment and livelihood to more than
83% of the population, contributes to about 85% to total export earnings and 46% to GDP,
supplies around 73% of the raw material requirement of agro-based domestic industries (AfDB,
2011). It is also the major source of food for the population and hence the prime contributing
sector to food security. However, the countrys crop production is rainfall dependent, being
produced by small holders and subsistent farmers who have less capacity to adaptation of climate
change; who usually cultivate land areas of less than 1 hectare and collectively account for
approximately 95 % of the countrys agricultural production (FAO, 2009).
Ethiopias economy and ecological system are fragile and vulnerable to climate change. The
country is characterized by diverse topographic features that have led to the existence of a range
of agro-climatic zones each with distinctly variant climatic conditions, such as: Lowland,
Midland, and Highland. Among these zones, the lowland that receives the lowest and most
erratic rainfall rates, notably the Central Rift Valley (CRV) region, experiences frequent natural
hazards such as sudden flooding, recurrent droughts and chronic water stress that are aggravated
by climate change and its variability.
Ethiopias agricultural sector, with cereals as major food crops, is especially vulnerable to the
adversities of weather and climate change and is characterized with poor productivity. Cereals in
Ethiopia are particularly important to the countrys food security being a principal dietary staple
for most of the population, comprising about 2/3 of the agricultural GDP and 1/3 of the national
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GDP and source of income for the majority of the people. The country is one of the largest cereal
producers in Africa, yet it is a net importer to meet the populations food demands. Different
cereals are grown in different geographic areas; the primary cereals grown in Ethiopia are teff,
maize, sorghum, barley, wheat and millet. According to, Kassahun (2011) cereals production has
a share of more than 80% of area and 86% of crop production in the country. More than 12
million private smallholders have engaged in the production of crop agriculture.
According to the recent five-year Growth and Transformation Plan (GTP, 2010) of the Ethiopian
government, Ethiopia annually loses 2% to 6% of its total production due to effect of climate
change. To tackle this, the Government of Ethiopia has set the Growth and Transformation Plan
(GTP) and Climate-Resilient Green Economy (CRGE) strategy as parts of its active agricultural
policy. The CRGE focuses on certain critical natural resource endowments and challenges
(climate change, food security, energy, etc.). The government has set a key goal to increase
agricultural output, and to ensure food security in Ethiopia. Such a plan needs to be accompanied
by a continuous research work. Hence in this mixed farming dominated country, it is important
to assess the impact of climate change on crop productivity and efficiency and its implication to
the countrys food security under varying climatic conditions.
This study is expected to contribute to the existing literature regarding climate change issues, and
is designed to bridge the gaps identified. A brief survey of the stochastic production frontier
literature shows that several empirical works have been undertaken to investigate impacts of
climate change on Ethiopian agriculture with different methodologies (see Mintewab et al., 2014;
Zerihun, 2012; Bachewe et al., 2010; and Bamlaku et al., 2009). Some of these studies focus on
national level assessments. Nonetheless, climate change may have area-specific effects, for
example, agro-ecology based analyses may provide a better insight into the impact of climate
change. Some investigate impacts that are on single crop or two crops. Others focus only on crop
production, disregarding the role of livestock production.
In general studies of impact of climate change that include major climatic factors on cereal crop
yield and assessment of its indirect impact on food security are very scanty in Ethiopia.
Moreover, to the best of available knowledge, no study has analyzed determinants of cereal crops
productivity between agro-ecological zones in improving agricultural productivity and links to
climate change. Hence in this mixed farming dominated country, it is necessary to undertake
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more research to assess the impact of climate change and role of production factor variability in
the countrys crop production under varying climatic conditions.
Accordingly, this research is designed to bridge the gaps in the literature identified above, by
considering analysis of climate variations impact in different agro-ecological zones, on major
staple cereal crops, in main cereal crop producing regions in the country. Hence the study will
contribute to the analysis and discussion of economic impact of climate variation on productivity
in Ethiopian cereal crops production. The output of the research will provide a quantified
assessment about the impact of climate variation on productivity which has implication for the
countrys food security. Moreover, as climate change and its impact is an emerging global
concern, the output of this research will serve as supplementary information to the available
literature dealing with the impact of climate change on yield and food security.
The rest of the paper is organized as follows. Section 2 presents an overview of the literature on
impacts of climate variations on crop productivity in developing countries and Ethiopia. In
Section 3, data employed and the econometric methodologies used in the study are presented.
Section 4 presents and discusses empirical findings and Section 5 concludes the paper.
2. REVIEW OF THE EMPIRICAL LITERATURE
A considerable number of studies on impact of climate change on agricultural crop productivity
have been conducted in developing and developed countries. In particular, several empirical
works have been undertaken to investigate the impact of climate variation on Ethiopian
agriculture at different levels and with different research methodologies. In what follows, we
review the studies that have focused on developing countries in general followed by a review of
studies in Ethiopia in particular.
2.1 Impact of climate variation on crop productivity in developing countries
Liangzhi et al., (2005) investigated climate impact on Chinese wheat yield growth, using cropspecific time series and cross-section data from 1979 to 2000 for twenty-two major wheat
producing provinces in China and the corresponding climate data such as temperature, rainfall,
and solar radiation during this period. They found that a 1 percent increase in wheat growing
season temperature reduces wheat yields by about 0.3 percent. They reported also rising
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temperature over the two decades prior to their study accounts for a 2.4 percent decline in wheat
yields in China while the majority of the wheat yield growth, 75 percent, comes from increased
use of physical inputs.
Guiteras (2009) estimated the impact of climate change on Indian agriculture using feasible
generalized least squares (FGLS) estimation method. Their results suggested that climate change
is likely to impose significant costs on the Indian economy unless farmers can quickly recognize
and adapt to increasing temperatures. They reported that such rapid adaptation may be less
plausible in a developing country, where access to information and capital for adjustment is
limited.
Gupta et al. (2012) analyzed impact of climate change on crop yields with implications for food
security and poverty alleviation, using quartile regression for aggregate crop yield. The study
combined historical crop yield data on two of the major crops grown around the world, rice and
maize, with the respective temperature and precipitation data from 66 countries in the world
during1971-2002. The study found that increases in temperature and precipitation exceeding a
certain threshold can be damaging for both rice and maize yields, while increases in the
variability of the climatic variables has a greater negative effect on countries with lower yields
for rice.
Kumar and Sharma (2013) analyzed the impact of climate change on agricultural productivity in
quantity terms, value of production in monetary terms and food security in India based on
secondary data for the duration of 1980 to 2009. Their regression analysis was based on CobbDouglas production type model. Their results showed that for most of the food grain crops, nonfood grain crops in quantity produced per unit of land and in terms of value of production
climate variation cause negative impact. The reported adverse impact of climate change on the
value of agricultural production and food grains indicates food security threat to small and
marginal farming households. The study also reported econometric estimation on state wise food
security index which reveals that food security been adversely affected due to climatic
fluctuations.
Addai and Owusu (2014) analyzed sources of technical efficiency of Maize frmers across
various Agro Ecological Zones of Ghana, based on a panel data analysis using a stochastic
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production frontier model for a sample of 453 maize farmers. They reported that extension;
mono cropping, land ownership and access to credit positively influence technical efficiency.
High input price, inadequate capital and irregularity of rainfall are the most pressing problems
facing maize producers in the forest, transitional and savannah zones respectively.
Mulwa (2015) analyzed the overall farm efficiency, and the influence of climatic factors, and
agro-ecological zone factors on farm level efficiency in Kenya using a two stage semi-parametric
model. They used rural household survey data sets for the periods 2004, 2007, and 2010 that
were collected from 2,297, 1342 and 1313 households for the three years respectively; spread
over 24 districts in Kenya. Results indicate that farming in Kenya is highly inefficient,
recording efficiency levels of 15%, 12%, and 18% for the years 2004, 2007 and 2010. The study
reported temperature, rainfall, Standardized Precipitation-Evapotranspiration Index (SPEI),
altitude and adaptation strategies all influence farming efficiency in the country negatively and
positively and at different magnitudes.
2.2 Impact of climate variation on crop productivity in Ethiopia
Deressa and Hassan (2009) analyzed economic impact of climate change on crop production in
Ethiopia using the Ricardian model and cross-sectional data from farm households in different
agro-ecological zones of the county. They reported that climate, household and soil variables
have a significant impact on the net crop revenue per hectare. Moreover, they concluded that the
reduction in net revenue per hectare by the year 2100 would be more than the reduction by the
year 2050. Additionally, results indicated that the net revenue impact of climate change is not
uniformly distributed across the different agro-ecological zones of Ethiopia.
Bamlaku et al., (2009) investigate efficiency variations and factors causing inefficiency across
agro-ecological zones, Ethiopia using stochastic frontier analysis. They were collected data from
254 randomly selected households conducted in the three districts of East Gojjam zone. Their
stochastic frontier production function estimate revealed a mean technical efficiency of 75.68%.
They reported that a statistically significant difference in technical efficiency among agroecological zones with highland zones scoring the highest leading to a rejection of the hypothesis
of no significant efficiency difference. F-test also showed a statistically significant difference in
technical efficiency among agro-ecological zones with highland zones scoring the highest
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leading to a rejection of the hypothesis of no significant efficiency difference. On the other hand,
maximum likelihood estimates indicated positive and significant elasticities for inputs such as
land, labor, draft power and fertilizer. Besides, education, proximity to markets, and access to
credit were found to reduce inefficiency levels significantly. However, neither extension visits
nor trainings on farmland management brought positive impacts in affecting the efficiency level
of farmers.
Zerihun (2012) during his analysis of the impacts of climate change on crop yield and yield
variability in Ethiopia investigated the impacts of climate change on mean and variance of crop
yields over a period of 28 years. He used a stochastic production function and estimated the
effects of rainfall on crop yields and its variations and found that the effects of the seasonal
rainfalls differ across crops and regions. His simulation results showed that the negative impacts
of future climate change entail serious damage on production of Teff and Wheat, but relatively
maize yield will increase in 2050. In addition, they reported that the future crop yield levels
would largely depend on future technological development, which have improved yield over
time despite changing climate.
Mekonnen (2012) in his analysis of climate variability and its economic impact on agricultural
crops using Ricardian approach analyzed marginal effects of temperature and rainfall on
agricultural crop productivity based on farm data generated from 174 farmers. Regressing of net
revenue, it is reported that climate, socio-economic and soil variables was found to have a
significant impact on the farmers net revenue per hectare. Their results from marginal analysis
have shown that a 1C increase in temperature during the main rainy and dry seasons reduced the
net revenue. On the other hand, a 1C increase in temperature marginally during the short rainy
and autumn seasons was found to increase the net revenue per hectare. Also it is reported that an
increasing precipitation by 1mm during the main rainy and dry seasons reduced the net revenue
per hectare.
Gebreegziabher et al., (2013) investigated crop-livestock inter-linkages and climate change
implications for the Ethiopias agriculture in broader sense using Ricardian approach in the Nile
Basin during the 2004/05 production year. They analyzed the impact of climate change and
weather variation on agriculture, on crops and livestock, both separately and taken together. The
findings suggested that warmer temperature is beneficial to livestock agriculture, while it is
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harmful to the Ethiopian economy from the crop agriculture point of view. Moreover, they
concluded that an increasing/decreasing rainfall associated with climate change is damaging to
both of the agricultural activities.
Mintewab et al., (2014) assessed impacts of weather and climate change measures on agricultural
productivity of households, measured in terms of crop revenue, in the Amhara region of
Ethiopia. They used four waves of survey data, combined with interpolated daily temperature
and monthly rainfall data from the meteorological stations. The findings showed that temperature
effects are distinctly non-linear, but only when the weather measures are combined with the
extreme ends of the distribution of the climate measures. In addition, they reported that rainfall
generally has a less important role to play than temperature, contrary to expectations for rain fed
agriculture.
Accordingly, this research has been designed to bridge the gaps in the literature identified above,
by considering analysis of climate variability and its impacts on agricultural productivity in
different agro-ecological zones, on major staple cereal crops, in main cereal crop producing areas
in Ethiopia. Hence the study has provided valuable information needed to develop agro
ecologically-adaptive strategies in response to the rising climate variation impacts in the country.
Hence, the results can be used to infer the economic implications of climate change on targeted
food crops in the country. Moreover, findings of this research would serve as supplementary
information to the available literature dealing with the impact of climate change on yield and can
play a significant role to enhance and facilitate exchange of climate knowledge and information
among local communities, field experts, policy makers and researchers.
3. DATA AND THE METHOD
3.1 Data and Study Area
This study employed four round panel data of six peasant associations (PAs) in rural Ethiopia.
The data was from a panel dataset commonly called the Ethiopian Rural Household Survey
(ERHS) - a longitudinal dataset collected from randomly selected farm households in rural
Ethiopia collected in 1994, 1999, 2004, 2009, and 2014. Originally, the first four waves were
conducted by the Department of Economics at Addis Ababa University, Centre for the Study of
African Economies (CSAE)-University of Oxford, UK and International Food Policy Research
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Institute (IFPRI) in collaboration. Data collection started in 1989 on seven study sites. The 1989
survey was expanded in 1994 by incorporating other survey sites in different regions of the
country. From 1994 onwards data collection has been conducted in a panel framework. The
number of study areas was increased to fifteen with the resulting sample size totalling 1,477
households. The newly included study villages were selected in order to represent the countrys
diverse farming systems. Before a household was chosen, a numbered list of all households was
developed with the help of local PA authorities. Once the list had been constructed, stratified
random sampling was used to select sample households in each village, whereby in each study
site the sample size is proportionate to the population, resulting in a self-weighing sample. The
surveys are conducted on a sample that is stratified over the countrys three major agricultural
systems found in five agro-ecological zones.
The last round survey was extended from original sample by forming a sub-sample of the
original sample covering the said six PAs following a similar sampling strategy and comprising
495 households in 2015 by the researcher. This was implemented in collaboration with the
Department of at Economics Addis Ababa University and the Environment for Development
(EfD), at University of Gothenburg, Sweden through Ethiopian Development Research Institute

(EDRI). The survey sites include households in 6 PAs in two regional states (Oromia and
Amhara); regions that represent the largest proportion of the predominantly settled farmers in the
country. The 6 PAs were selected carefully in order to represent the major cereal crops producing
areas that may represent different agro-ecological zones in the regional states of the country. The
PAs are characterized by a mixed farming system, with a household having several field plots for
crop cultivation, and livestock grazing. The contents of the questionnaire that was extracted from
that of ERHS focusing only to those parts required for the intended study.
The data set is comprehensive and addresses households demographic and socio-economic
characteristics such as age, education, and households size; agricultural production inputs use
and outputs, livestock ownership; access to institutions; and ways of climate change adaptation
and coping mechanism of the farmers. Moreover, important secondary data needed for the study;
location and the metrological data on climate variables mainly altitude, latitudinal, longitudinal
position of the PAs, temperature and rainfall was obtained from the Ethiopian Meteorology
Authority. It includes monthly observations from the years 1999 to 2014, collected in stations
close to the study villages. The metrological data set includes monthly and annual rainfall, and
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annual maximum and minimum temperature data that were collected by the metrological agents
from stations near to the study villages (PAs). Consequently, this analysis included a total of the
balanced 310 households consisting of 1,240 household level observations over four rounds that
were surveyed in all rounds since 1999 for six PAs.

Variables used in the analysis


The choice of study variables was guided both by review of economic theory application and
other previous empirical work on agricultural production and productivity in general in Ethiopia
and in Developing Countries. Agricultural production and productivity studies in developing
countries including those on Ethiopia showed that traditional agricultural input quantity,
technology variables like fertilizer, pesticides, machinery use and some demographic and
socioeconomic characteristics of the household affected farm production and productivity level.
However, the effect varied in time and space depending on specific situations in the study
countries/areas, making it imperative to test their effects also in Ethiopias cereal crop producers.
For this study the dependent variable; output per cultivated hectors, is measured as the total
monetary value from the different cereal crops grown on a given farm was used. Accordingly, a
continuous variable-yield in logarithm term was selected as the dependent variable. As input
variables we have used traditional agricultural input quantities, technological variables such as
quantities of fertilizer, agro-chemicals and machinery use of the household. The climate
variables are defined as average annual precipitation and average annual temperature; and a set
of regional dummy variables such as agro-ecological zones as explanatory variables. Farm
outputs are captured in kilograms per households per cereal crops in quantities. Due to
aggregation challenges, seed for different crops, and different types of damage controlagrochemicals variables (pesticides, herbicides, fungicide and insecticides); these variables were
converted in to monetary equivalents. An equivalent conversion was done for each chemical
input which was then summed up agro-chemicals as damage control inputs. Farm labor was
converted it into man-day equivalent (MDE) units.

Classification of Agro-ecological Zones in Ethiopia


As indicated in Table 1 below, the agro-ecological zones in Ethiopia vary greatly in terms of
altitude, rainfall, length of crops growing period and average annual temperature. As a general
rule, the higher we move, the colder it becomes and the longer is the growing period.
Table 1: Traditional classification of Agro-ecological Zones in Ethiopia
Average Annual
Agro-ecological Zone

Altitude

Average Annual

Length of Growing

Rainfall(mm)

(meters)

Temperature ( C)

Period (days)

moist)

1200-2200

>3200

<11.5

211-365

Highland (cool and humid)

900-1200

2300-3200

11.5-17.5

121-210

Midland (cool sub-humid)

800-900

1500-2300

17.5-20.0

91-120

Lowland (warm semi-arid)

200-800

500-1500

20.0-27.5

46-90

<200

<500

>27.5

0-45

Upper highland (cold and

Desert (hot arid)

Source: MoA (2000)

Besides, Table 2 below illustrates agro-ecological zones classification of the study area, in which
the study PAs were classified into three agro-ecological zones according their agro-climatic
conditions. Accordingly one PA is clarified as lowland agro-ecological area, two PAs clarified as
lowland agro-ecological area and three PAs are clarified as highland agro-ecological area.
Table 2: Classification of the study area in to Agro-Ecological Zones
Average
PAs/survey sites
Region

Amhara

District

Dabra-

Dabra-

Faji

78.45

Birhan

Birhan

Kara-Fino

Basona
Adaa

NorthShowa
East-

Oromiya

Annual

Zone

Showa
WestArsi
Arsi

Agro

Temperature

ecological

( C)

Zone

2750

13.05

Highland

78.45

2750

13.05

Highland

Milki

78.45

2750

13.05

Highland

Sirba-Godeti

79.77

1763

20.6

Midland

62.33

1937

17.82

Midland

72.13

1351

21.8

Lowland

Rainfall (mm)

Turufe-

Shashamane
Dodota

Altitude(m)

Average Annual

Kachama
Koro-Degaga

Source: Authors calculations.


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It can be observed that the three agro-ecological zones are fairly represented in the study sites.
This may allow inter-regional comparisons of the results. Moreover, according to the information
obtained from the agricultural bureaus of each district, there are differences in the types of major
crops grown in each agro-ecological zone in the study area. For instance, the dominant crop
grown in lowland area is sorghum, whereas teff and barley are dominant in midland area and
highland areas respectively.
3.2. Econometric Methodology
Conceptual model
For this study we used Cobb-Douglas type production function (CDPF) called a production
model using total production value per unit land for each farm called Yield as a dependent
variable utilizing appropriate panel data for time period, 1999 to 2014. This production model
assume that climatic factors are important input factor for growth of crop (Nastis et al., 2012)
while it assumes agricultural production being a function of many variables and other physical
inputs. These include crop cultivated area, labor, fertilizer, , irrigated area, agrochemicals,
number of oxen owned, agricultural machinery use; and climate variables such as temperature
and precipitation.
Hence, we hypothesis total cereal crops production as a function of categories of explanatory
variables such as physical agricultural inputs, technology management, and climate factors; and
formulate the following functional form for this study as:

(1)

TP f AL , CA, CF , IS , M , Cli F

Where; TP represents total cereal crops production value which is the net production. AL
represents the total number of economically active member of households in cereal crops
production, CA is total cereals cultivated land area used for cereal crops production, CF
represents the total consumption of chemical fertilizer, IS represents the total quantity of
improved seeds used, M represents the total number of machines in use in cereal crops
production, and CliF represents climate variables which are temperature and precipitation.

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Now, dividing total cereal crops production value (TP) by total cereal cultivated land area,
equation (1) will become-

TP / CA f AL, CF , IS , M , CliF

(2)

where; TP/CA is total cereals production of per unit land or yield.


Hence, based on the above hypothesis incorporating the non-climatic factors such as household
demographic and socioeconomic characteristics (HHC), other factors like agro-ecological
variables and time as dummy variable to capture technical change; we formulated the following
general functional form of crop yield model using a panel data context based on single-equation
production model, for this study as:

(3)

Yit 0 * X it * exp( CliV it HHC it AgEV k Yeart ) * e it

Equation (3) can be transformed into the logarithmic form, to be written as:
(4)

ln Yit 0 j ln X it h CliV it k AgEV k n HHC it t year t it


j

where: ln is the natural logarithm; i (i 1,2,3,..., N ) , t (t 1,2,3,...,T ) ; j and h indexes farm, time
period and inputs respectively; Y is total cereals production of per unit land or yield of the i- th
farm/household at time t; X is the jth traditional agricultural input quantity and other technology
variables include the quantities of fertilizer, agrochemicals and machinery use of the ith
household at time t. HHCs is household demographic and socioeconomic characteristics, CliVs
are climate variables including annual average rainfall, annual average maximum and minimum
of temperature during crops growing season respectively; AgEVs are a set of regional dummy
variables such as agro- ecological zones that are included to represent time-persistent factors, and
finally year is years in the panel period, as a time-variant time trend variable that will be used to
represent the factor due to technological change during these period. s, s, s, s and s are
the regression coefficient for respective variables to be estimated and it ci uit is the
composite error term in the model, which is decomposed into unobserved heterogeneity part (ci)
and the so called idiosyncratic error (uit) components.

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Equation (4) represents the log linear form of the production function model. Similar model was
used by Nastis et al., (2012) to analysis the climatic impact on agricultural productivity in Greek;
by Gupta et al., (2012) to investigate the climatic impact on rice, sorghum and millet productivity
utilizing panel in India; by Kassahun, A., (2011) to analysis the Impact of Climate Variability on
Crop Production in Ethiopia. Similar model was also used by Kumar and Sharma (2013);
Shakeel et al., (2012); and Rukhsana (2011) for similar analysis in India.

3.3 Empirical Model Specification


For empirical applications after including the major variables (climate variability factors and
production input factors); incorporating possible household demographic and socioeconomic
characteristics and agro-ecological and time dummy variables in equation (4) above, we specify
household specific cereal crops yield empirical model using panel data set as:
(5)

ln ( yield)it 0 1 ln loberit 2 ln livestockit 3ln fertilizer)it 4 ln seedit

5ln agrochemicalsit 6ln machineryit 7 ln AAMINRFit 8 ln AAMAXRFit


N

n1

k 1

9 ln AAMAXTit 10 ln AAMINT)it n HHCn k AgEVk t yeart it


t

where: AARF, AAMAXT and AAMINT are annual average rainfall, annual average maximum
and minimum of temperature in entire crop duration respectively; HHC is household
demographic and socioeconomic characteristics, and agro-ecological and time dummy variables
as explained before. s, s, s and s are the regression coefficient for respective variables to
be estimated and it is the composite error term in the model.
4. EMPIRICAL RESULT AND DISCUSSION
4.1. Descriptive Results
Descriptive statistics of the data
The descriptive statistics of the variables used in the analysis are presented in Table 3 below. It
presents the summery statistics and evolution of agricultural production output and input
variables and major characteristics of households over the period 1999-2014. Farm outputs are
captured in kilograms per farm, with a mean of 1,696.9 kilograms, minimum of 25 and
maximum 27,800 kilograms for the surveys. According to Table 3, the mean of output in

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kilogram in the sample was about 1,097.1 kilograms in 1999 which rose steadily to 2,407.3
kilograms in 2014. This shows that output increased over time. Farm average yield is also
captured in kilograms per acreage quantities, with a mean of 1,305.5 kilograms ranging from
28.6 kilograms to 10,667.7 kilograms per farm for the four waves of data. This was obtained by
using 223.06 man-days of labor per farm, although there was a wide variation, ranging from 3 to
2,546 man-days; and 188 kilogram of seed use ranging from 6 kilogram to 1,500 kilogram per
farm of seed sown on average of 1.57 hectares cultivated farm land. Fertilizer application was
minimal with an average of 103.53 kilogram of fertilizers was used per household against a mean
cultivated land area of 1.57 hectares; while they expenses on average 51.3 birr for agrochemicals was use per households.
Table 3: Descriptive statistics of input-output variables and some households characteristics over

1999-2014 years (N=310 farms observed each 4 years, Overall observations = 1,240)
1999

2004

2009

2014

ALL

Variable

Mean

Mean

Mean

Mean

Mean

Yield

883.6

1031.4

1274.9

2032

1306

Output

1097.1

1273.7

2009.3

2407

1697

Farm size

1.49

1.48

1.74

1.58

1.57

Fertilizer

97.77

87.95

86.54

141.8

103.5

Agrochemicals

27.74

23.65

56.76

97.09

51.31

Farm labor

205.9

266.17

178.12

242

223.1

Machinery

41

444

157

161

Livestock

6.18

4.5

7.79

8.57

6.76

No of oxen

1.7

1.37

1.76

1.74

1.64

Number of plot

3.68

2.97

3.63

3.89

3.54

Credit amount

508

209

568

646

483

52.41

52.84

50.65

50.54

51.61

Household head educ.

3.7

4.47

6.43

4.43

4.76

Household marital status

1.92

2.04

1.91

2.02

1.97

Household family size

6.32

4.63

5.77

5.7

5.6

Head age

Source: Authors calculations.

14

The average farm land holding per farm household in the sample was below two hectares. The
number of plots owned by smallholder under cereal crops cultivation, that measure land
fragmentation averaged to 3.54 with a maximum of 16 plots. The average livestock ownership
was 6.76 units (tropical livestock units) and average oxen ownership was around 1.64 that is
almost two oxen per farm household, ranging from 0 to 9 oxen per farm household.
Table 4 shows that for combined panels, the majority of farmers are males, in which maleheaded households constituted 900 (72.58%) of the total sample. The age of the household head
is an important factor as it determines whether the household benefits from the experience of
older farmers or the risk taking attitude of younger farmers. For this penal mean household age
about 51.61years of age with minimum and maximum of 17 and 103 years respectively, while
household size ranged from 1 to16 members, with a mean of approximately 6 members. The
household size between the three years appeared to be different; in which 1999 year recorded
highest family size; while 2014 averaged with less family size, reflecting a natural process by
which children exit from the household as they become older. Household size has an important
implication for agricultural labor supply and household food security issues. Large family size
could imply availability of adequate labor and more demand for household consumption.
Table 4: Descriptive statistics of dummy variables over time; 1999-2014 years
1999

2004

2009

2014

ALL

Freq.

Percent

Freq.

Percent

Freq.

Percent

Freq.

Percent

Freq.

Percent

Sex

241

77.74

241

77.74

199

64.2

219

70.7

900

72.58

Agri. Ext. service

134

43.23

73

23.55

123

39.7

117

37.7

447

36.05

Credit use

150

48.39

196

63.23

175

56.5

155

50

676

54.52

Manure use

196

63.23

223

71.94

184

59.4

197

63.6

800

64.52

Crop damage

182

58.71

294

94.84

186

60

166

53.6

828

66.77

Source: Authors calculations.

A total of 447 (36.1%) of the farmers have reported contact with extension agents but have very
few contacts with extension agents in a month, only (1.6 times on average, or 1-4 times per
month). Almost half of the sampled farmers have access to credit of which 676 (54.5%) have
access to credit that can be from formal credit Institutions informal credit sources either from
relatives, friends or local lenders. They also used low levels of credit; credit amount averaged
approximately 483 birr per farm with maximum of 4,000 birr.
15

Combining the four panels, the educational level of the household head also varied over the years
with mean schooling being 5 years (Table 5). In which majority of the sample respondents, that
is 701 (56.56%) did not attained any formal education; hence are illiterate in which 512(41.3%)
of them did not attained any schooling, 38 (3.06%) some religious (Church/Mosque) schooling
and 151 (12.2%) of them attained adult literacy program participation. About 539 (43.44%) of
them have attended formal education ranging from elementary schooling to territory level
education; out of which 454 (36.6%) of them have completed primary education, 1-8; 48
(3.87%) completed junior secondary education, 9-10; 26 (2.1%) completed senior secondary
education, 11-12; 11 (0.89%) have territory schooling in which few have completed university
education.
Table 5: Descriptive statistics of households educational characteristics by schooling level
1999

2004

2009

2014

ALL

Schooling

Freq.

Percent

Freq.

Percent

Freq.

Percent

Freq.

Percent

Freq.

Percent

Illiterate

110

35

142

45.81

133

42.9

127

41

512

41.3

Religious School

22

7.1

1.94

2.9

0.32

38

3.06

Adult Literacy

0.3

45

14.52

76

24.5

29

9.35

151

12.2

Primary educ.

149

48

102

32.9

80

25.8

123

39.7

454

36.6

Joiner 2ry educ.

17

5.5

2.58

1.29

19

6.13

48

3.87

Senior 2ry educ.

2.3

1.94

1.61

2.58

26

2.1

Territory educ.

1.3

0.32

0.97

0.97

11

0.89

310

100

310

100

310

100

310

100

1,240

100

Observation

Source: Authors calculations.

Comparison between the Agro-Ecological Zones


The PAs vary in a range of agro-climatic conditions (i.e., rainfall, temperature, and elevation). In
addition, we also included altitude as an indicator of elevation of the PAs. This is directly related
to the agro-ecological zones, which are mainly classified based altitude, rainfall, and
temperature. In terms of agro-ecology related variables including altitude, temperature and
rainfall during crops growing season; the study covers the area that can be classified in to three
agro-ecological zones (lowland, midland and highland) in the country.
When we look the situation of crops production output and yield across agro-ecological zones,
we found that as one move from highland zones to that of lowland zones, crop yields is found to

16

decrease. Using descriptive summery Table 6 below shows that the mean of output and
productivity is higher in highland areas followed by midland agro-ecological area; while the least
output and yield is observed in lowland areas.
When we look the situation of climate variables across agro-ecological zones, as the descriptive
summery below shows for the four panels, the study area range in altitude from 1,351-2,750
meters with mean of 1953 meters above sea level. The midland agro-ecological zone occupies
the largest percentage followed by lowland and highland agro-ecological zones respectively. In
general, for the four panels, the mean of average annual rainfall is 73.9 mm that varies from
49.4-108.3 mm; while mean of average annual maximum temperature is 25.9oC that varies from
19.7-33.1oC; and mean of average annual minimum temperature is 10.4oC, fluctuating from 4.814.5oCin the study area.
Table 6: Descriptive statistics of some important farm characteristics by agro-ecological zones
for all years
Lowland

Midland

ALL

Highland

Variable

Mean

Min

Max

Mean

Min

Max

Mean

Min

Max

Mean

Min

Max

Yield

630.9

28.6

4000

1517.4

200

10666.7

1714.5

114.3

8000

1305.5

28.6

10666.7

Output

1413.2

25.0

11000

1746.9

50.0

27800

1929.5

50.0

10000

1696.9

25.0

27800

Aarf

72.1

49.4

106.1

72.1

58.9

108.3

78.7

75.5

85.3

73.9

49.4

108.3

Aamaxt

30.6

27.2

33.1

26.5

22.9

30.0

20.0

19.7

20.2

25.9

19.7

33.1

Aamint

13.0

10.7

14.5

11.4

9.2

13.5

6.1

4.8

7.1

10.4

4.8

14.5

Observation

372

528

340

1240

Percent

30

42.58

27.42

100

Source: Authors calculations.

Looking climate variables across agro-ecological zones; mean of average annual rainfall in
lowland agro-ecological zone is 72.1 mm that varies from 49.4-106.1mm; while mean of average
annual maximum temperature is 30.6oC that varies from 27.2-33.1oCand the mean of average
annual minimum temperature is 13.0oC, fluctuating from 10.7-14.5oC.Similarly mean of average
annual rainfall in midland agro-ecological zone is 72.1 mm varying from 58.9-108.3mm; mean
of average annual maximum temperature is 26.5oC that varies from 22.9-30.0oC and the mean of
average annual minimum temperature is 11.4oC, fluctuating from 9.2-13.5oC. For highland agroecological zone mean of average annual rainfall is 78.7 mm that varies from 75.5-85.3mm; while
17

mean of average annual maximum temperature is 20.0oC that varies from 19.7-20.2oC and the
mean of average annual minimum temperature is 6.1oC, fluctuating from 4.8-7.1oC.
4.2. Econometric Regression Results
Various testing results
For the econometric result several multiple regressions models were run for selection of
appropriate penal model to estimate best fit of models. Certain variables in different models were
dropped from the regression due to high insignificant level of respective variable. Finally three
panel regression models Pooled, Random-effect and Fixed-effect regression models were used.
Random effect regression model was used to identify the agro-climatic impact on dependent
variable and the fixed effect model to identify the time effect in the data (Gupta et al., 2012).
Beside several estimation diagnoses for the econometric models were also performed.
Accordingly, the Variance Inflation Factor (VIF) was used to detect multicollinearity. The VIF
values for all the independent variables confirm that there is virtually no multicollinearity as their
specific values were less than 10 (VIF < 10). Another potential problem may be omitted variable
bias where some temperature-related variables that affect cereal crops yield but have been left
out. For this we performed the Ramsey (1969) regression specification error test (RESET) for
omitted variables. The test reveals that (Prob > F = 0.6322 > 0.05) indicates that there are no
omitted variables for this particular model; therefore, there is no need to improve the
specification of the model.
To check for the presence of unobserved household heterogeneity Breusch-Pagan Lagrange
Multiplier test was used. The result of the test reveals that there is no unobserved household
heterogeneity, as the p-value 0.3367 > 0.05. To check the quandary of the fixed and random
effect regression model estimates, Hausman specification test (Wooldridge, 2002) was used. It
test a null hypothesis that random effects estimation gives consistent and efficient coefficients
versus alternative hypothesis that random effects coefficients would be inconsistent. The result
of the test showed that fixed effects as a more efficient model against random effects; as its pvalue is less than 1 percent critical level suggesting that the random effect model is strongly
rejected. Hence fixed effect estimation will be applied in this regression analysis. Furthermore,
for heteroscedasticity test, we used a heteroscedasticity robust method. Hence as presented
18

above, since the model has passed all the regression hurdles, we therefore conclude that the
model adequately fits the data.
Analysis of the estimation results
Table 8 below presents the regression results on panel data-set. In an overall view, as can be seen
from the table, the results obtained from the three models conformed well to expectation; as most
of the explanatory variables in the regression result are statistically significant and of expected
signs. Thus, the models adequately fit the data set relatively well. Moreover, the use of robust
standard errors helps the model to diminish heteroscedasticity. In particular, the Pooled and
random-effects estimates for parameters of most of the explanatory variables are significant at
the 5 percent level or below with the expected signs. The fixed effects estimates differ slightly
from that of Pooled and random-effects with some improvements and all parameters are still
significant at the 5 percent level or below for both models. Hence, after assessing the three
modes estimates we choose only to refer the random-effects results in the rest of this paper.
As shown in Table 8 below the coefficient for fertilizer use, agricultural labor use,
agrochemicals, livestock ownership measured in TLUs, number of owned oxen (animal draft
power), participation in agricultural extension services and households head education
significantly enhances cereal crops productivity level. A positive sign indicates that lack of these
physical assets would hamper the agricultural activities and hence cereal crops productivity. On
the hand coefficient for cereal sown/cultivated farm land size, agricultural farm machinery
implements and households head age negatively impacted cereal crops productivity level.
The estimated coefficients of fertilizer use are statistically significant, depicted positively
significant enhancement in productivity level values at 1 percent significance level. Therefore, an
increment in the use of modified fertilizer varieties by 1 percent will increase output hence
productivity level by 3 percent. Crop production is labor-intensive activity in Ethiopia.
Accordingly, labor availability showed positively and significantly affected cereal crops
productivity at 1 percent significance level. This indicates that an increment in labor supply by 1
percent will increase crops productivity by 6 percent. In this paper the agricultural labor
aggregation was compiled from three sources such as traditional labor sharing groups, family
labor and hired labor. Hence in this regard, in this study the effect of farm labor on cereal crops
19

productivity cannot be over emphasized, as about 70 percent of our sampled households


characterized by having family size more than 4 members in the household in which more of
members were adults. In fact, the literature argues that an increase in the number of adults in the
family could increase crops productivity if the increased in this resource is devoted to crop
production.
As regards livestock ownership measured in TLUs, its coefficients were positively and
significantly associated with crops productivity at 1 percent significance level. The coefficient
indicates that an increment in livestock number by 1 percent will increase output by more than 9
percent. The positive sign for livestock ownership indicates that the availability of this asset is
essential in several respects. For instance, farmers who have livestock can sale and buy farm
inputs such as seeds, fertilizers and other chemicals, apart from smoothing their incomes and
better nourish their families with animal products such as milk and meat. They also use dung
cakes to fertilize homesteads. Besides, pack animals are used for timely transportation of the
crops to a threshing point. Since threshing is conducted using animal power, the availability of
livestock especially during peak periods is vital. It helps reduce post-harvest loses. The results in
this study are in line with the findings of several other empirical works (Abdulahi and Eberlin,
2001; Ahmed et al., 2002).
Regression result also shows that number of oxen owned has a positive and statistically
significant impact on cereal crops productivity at 5 percent significance level. This evides draft
oxen ownership is important factor for cereal crops productivity; and indicating the importance
of the lack of oxen ownership as a major constraint to productivity. Its regression coefficient
shows that 1 percent rise in number of oxen owned has increased cereal crops productivity by
about 0.12 percent.
Regression result showed use of agrochemicals as damage control has a positive and statistically
significant impact on cereals productivity at 1 percent significance level. Its coefficient implies
that, increase in agrochemicals use by 1 percent has increased the cereals productivity level by
0.03 percent. This implies that, farmers who use agrochemicals on their crops during cultivation
are more productive compared to farmers who do not spray their farms.

20

Table 8: Regression result: Impact of climatic and non-climatic variables on cereal crops
productivity. (N: Panel = 310, Overall observations = 1240)
Dependent Variable: Ln Aggregate yield of Cereal Crops
Pooled Model

ExplanatoryVariables

Coef.

Random effect Model


Coef.

SE(Robust)

Fixed effect Model


Coef.

SE(Robust)

SE(Robust)

Ln fertilizer

0.028***

0.01

0.028***

0.01

0.016

0.011

Ln agrochemicals

0.028***

0.008

0.028***

0.008

0.022**

0.009

Ln farm size

0.292***

0.034

0.292***

0.033

0.373***

0.037

Ln farm labor

0.061***

0.016

0.061***

0.016

0.045***

0.017

Ln machinery

0.028***

0.008

0.028***

0.008

0.035

0.010***

Ln livestock

0.096***

0.022

0.096***

0.02

0.090***

0.025

Ln No of oxen

0.117**

0.039

0.117**

0.039

0.104**

0.049

Agri. Ext. service

0.066**

0.033

0.066**

0.033

0.049

0.041

Households head age

0.013**

0.005

0.013**

0.005

0.018**

0.007

Households head age sq.

0.010**

0.005

0.010**

0.005

0.013**

0.006

0.005

0.006

0.005

0.006

0.005

0.006

0.007***

0.003

0.007***

0.002

0.005**

0.003

Households head sex

0.049

0.036

0.049

0.035

0.032

0.052

Ln annual ave. rainfall

0.422***

0.084

0.422***

0.08

0.355***

0.111

Ln annual ave. temperature

1.736***

0.196

1.737***

0.198

2.106***

0.361

Midland

0.518***

0.054

0.518***

0.051

Highland

0.257**

0.105

0.257**

0.106

yr04

0.353***

0.05

0.353***

0.048

0.348***

0.048

yr09

0.557***

0.045

0.557***

0.043

0.551***

0.043

yr14

0.941***

0.052

0.941***

0.051

0.977***

0.053

Constant

9.150***

0.722

9.151***

0.713

11.037***

1.38

Family size
Households head educ.

F-statistic

F( 20, 1219) = 80.53***

R-squared

0.5827

Wald chi (20) = 1894.66***


within = 0.4594

F(18,309) = 49.34***
within

= 0.4721

between = 0.7486

between = 0.3819

overall = 0.5827

overall

= 0.4018

Note: *: Significant at 10 percent; **: Significant at 5 percent; ***: Significant at 1 percent.

Another important factor considered in this analysis was access to extension services represented
by the participation of the household in governmental agricultural extension services and the
number of extension visits received by the farmer. The results of the analysis reveal that
participating in agricultural extension service had a significant and positive impact on cereal
21

crops productivity at 1 percent significance level. This shows participation and more number of
contacts with extension agents was associated with greater crops productivity. Thus ceteris
paribus, the corresponding regression coefficient shows that an additional increase in
participation and number of contacts with extension agents could lead to a rise in cereal crops
productivity by 0.07 percent.
The estimates on educational level of the household head show that education affects cereal
crops productivity positively and significantly at 1percent significance level. The positive sign
for education indicates that increase in human capital enhances the productivity of farmers since
they will be better able to allocate family-supplied and purchased inputs, select the appropriate
quantities of purchased inputs and choose among available techniques. The coefficient of this
regression indicates that an increment of households educational level by 1 percent has
increased cereal crops productivity by 1 percent. The results is in line with Battese and Coelli
(1995), who hypothesized education to increase the households ability to utilize existing
technologies and efficient management of production systems and hence attain higher
productivity levels.
Regression result further indicates that cereal cultivated farm land size has a negative and
significant impact on cereal crops productivity, conforming to the inverse farm size-productivity
relationships found in other studies. The estimated coefficient of the extent of farm land area
under cereal cultivation is significant at 1 percent significance level. Therefore, an increment of
cereal cultivated land under cultivation by 1percent will decrease productivity by more than 0.29
percent. The result is similar with what others have found in Tigray (Tesfay, et al., 2005).
Similar directions were obtained by Basnayake and Gunaratne (2002) in Tanzania.
The result further indicates that the use of farm machinery implements have negative sign
significantly at 1 percent significance level. The corresponding coefficient shows that an
additional increase in number of mechanized agriculture implements could lead to a decline in
cereal crops productivity by 0.03 percent. The result could be explained by the fact that, small
and fragmented land holdings make it difficult to attain economies of scale for smallholders
using machinery implements, indicating a mismatch between machinery implements and realities
at the farm level. This implies given the current landholdings and smallholders resource base,
investment in highly mechanized agriculture might not necessarily translate to high productivity.
22

Moreover, most farmers in the sample used archaic and very backward implements such as oxen,
hoe and plow; and only very insignificant portion of our sample used modern inputs such farm
machinery like tractor and combiner to harvest their crop output.
Age of households head is negative and significant across all the regressions, while its square is
positive and significant. This indicates that head age has a strong impact on crop productivity.
The negative sign for the coefficient of the age variable indicates that older household heads are
less productive than younger ones, implying that old farmers are a more decline on their level of
cereal crops output than younger ones. This result may be supported by the result from the
descriptive summery of the study as the age of the farmers studied ranged 17 to 103 years with
an average age of 52 years, implying that farmers in the area are relatively old, a condition that
might have affected productivity negatively, since crop production is labor intensive. Moreover,
the result can be explained in terms of crop production practice. Hussain (1989) argued that older
farmers are less likely to have contact with extension workers and are equally less inclined to use
new techniques and modern inputs, whereas younger farmers, by virtue of their greater
opportunities for formal education, may be more skillful in the search for information and the
application of new techniques. This, could be in return, could owe the younger farmers relatively
better capacity to manage their farm land hence would enable them to improve the level of their
cereal crops productivity.
On the contrary the age-squared is positively and statistically affected cereal crops productivity
at 5 percent significance level. The findings reveal that older household heads are more
productive than younger ones. This result can be explained as income of the previous research
works such as Beniam et al. (2004), assume that the older a farmer gets, the more experienced
and argued that he/she will appear to be more productive than younger farmers due to their good
managerial skills, which they have learnt over time. Besides, given the importance and
significance of land, labor, capital and other resources in agricultural crop production, it could be
argued that young households are deficient in resources and might not be able to apply inputs or
implement certain agronomic practices sufficiently quickly. In sum, a possible explanation to
these two contrasting effects regarding the age of household head might have neutralized each
other, in such a way that; the older hence more experienced farmers have more knowledge on

23

their farm land and traditional practices on agricultural crop production, but are less responsive
to take new ideas.
Another important variable that affected cereal crops productivity significantly in this analysis is
climate related variables. Results from both random and fixed effects analyses showed that
climate variables temperature and rainfall during crops growing season are found to significant
determinants of agricultural productivity. The result shows significant relationships between crop
yield and average annual temperature and annual precipitation at 1 percent significance level in
all cases.
Climate variation effects on yield
The result showed average of annual rainfall variability affected cereal crops productivity
positively and significantly. This is may be due to the fact that; rainfall enhances crop
productivity as it improves the soils capacity and enables it to use the fertilizer and other inputs
effectively (Tchale and Suaer, 2007). The regression coefficients suggest that any increment in
average of annual rainfall (precipitation) by 1 mm will increase cereal crops productivity level by
more than 0.42 percent. Interpreting the result in other way round a decrease in average of annual
precipitation by 1 percent annually would lead to a decrease in cereal crops yield by 0.42
percent.
Contrary to this, average annual temperature was negatively associated to cereal crops
productivity provide evidence that temperature has a negative effect on crop yield though their
effect is not uniform in the corresponding regression coefficients from random effects and fixed
effects models. The coefficients of regression for averaged annual temperature are found to have
large values implying to have large impact. The coefficient indicates that a 1oC rise in average
annual temperature during growing season could reduce cereal crops productivity level by 173
percent. This may be due to increase (downward move) in average annual minimum temperature
or (upward move) in average annual maximum temperature during crops growing season which
in turn leads to a declined in cereal crops productivity.
As expected geographical differences included in regression analysis as a set of regional dummy
variables (lowland, midland and highland) that are included to represent time-persistent, the
agro-climatic differences or regional differences considerably affects cereal productivity
24

significantly at 1 percent significance level. It appears that being farming in midland or highland
areas than other areas; contributed cereal crop productivity to increases and being farming in
lowland areas contributed a decrease in cereal crop productivity at 1 percent significance level in
both cases. Hence, in line with descriptive result, it is found that cereal crop yields to rise in
midland area by 0.52 percent; declined in highland area by 0.25 percent compared with the
lowland agro-ecological area.
Lastly, the regression result shows that the estimated coefficients for time dummy variables
categorized for this study are highly significant and positively impacted crops productivity. The
estimated coefficients show that cereal crops productivity is rising through the panel time
largely. The positive sign shows also that there is technological regress or upward shift in the
production function over time between these three time periods. The result evidences that there
has not only been an increase, but also increase in the percentage-value over the past 15years, as
the probability of average cereal crops productivity that raised in 2004 was 0.35 percent, was
0.56 percent in 2009, while it reached about 0.94 percent in 2014; all being significant at 1
percent level compared with the base year ad divided by number of years to get the annual
growth rate.

5. CONCLUSION
A large body of literature demonstrates negative impacts of climate change and variations on the
agricultural sector and its productivity. In particular, as climate change is likely to intensify high
temperature and low precipitation, its most dramatic impacts will be felt by smallholder and
subsistence farmers suffering the brunt of the effects. Considering the Ethiopian agricultural crop
production; it is observed that while the majority of cereal crops yield productivity increase is
due to increased use of physical inputs and the institutional change, the gradual increase in
growing season climatic factors in the last few decades has had a measurable effect on Ethiopian
cereal crops yield productivity.
In this paper, we evaluated the impacts of climatic and non-climatic factors on cereal crops yield;
provided descriptive and econometrics analysis of determinants of Ethiopian cereal crops yield
productivity using four-round panel-data. Consistent with previous findings of productivity
studies in Sub-Saharan Africa, which primarily consider agricultural production inputs and
25

climate factors, the results from regression analysis confirm the importance and statistically
strong dependence between of most of the explanatory variables and cereal crops yield in
Ethiopia. Descriptive results show that average annual rainfall, maximum and maximum
temperature decrease over time in all three agro-ecological zones considered in the study.
Econometrics results, random effect and fixed effect estimates indicated inputs such as fertilizer,
agricultural labor, agrochemicals, livestock ownership, number of owned oxen (animal draft
power), agricultural extension service and education level of the household head significantly
enhances cereal crops productivity. On the hand, farm size, agricultural machinery use and
household head age influenced cereal crops productivity negatively significantly.
Furthermore, considering that cereal crops productivity could be influenced by two main
meteorological factors. We find that rainfall variable to have a positive impact on cereal crops
productivity; while maximum temperature variable to have a positive impact hence reduces the
level cereal crops productivity. The result showed average of annual rainfall variability affected
cereal crops productivity positively and significantly. The regression coefficients suggest that
any increment in average of annual rainfall by 1mm will increase cereal crops productivity level
by more than 0.42 percent. Interpreting the result in other way round a decrease in average of
annual precipitation by 1 percent annually would lead to a decrease in cereal crops yield by 0.42
percent. On the other hand a 1oC rise of average annual temperature during crops growing season
could reduce cereal crops yield by 173 percent. This may be due to increase (downward move) in
average annual minimum temperature or (upward move) in average annual maximum
temperature during crops growing season which in turn leads to a declined in cereal crops
productivity. This negative impact would probably become worse with accelerating change of
future climate.
Moreover, regression result shows that dummy variables showing agro-ecological differences are
significant; and also time dummy variables are significant and positively impacted crops
productivity showing there is technological regress or upward shift in production over time
periods. These outcomes are important and can be used to inform the government on different
policy decision, such as where to emphasize when planning on climate change adaptation
strategies to be promoted, ways to envisage better extension services provisions that are tailored
to the peculiarities of the agro-ecological zones across the country. Thus the study result
26

confirmed that the climate change effects contribute to increase inefficiency in agricultural
crop yields in Ethiopia and in the study areas crop production showing impact of climate
change effects due to the low capability of adaptation. The study therefore recommends policies
that would improve extension service, education, supply of agricultural production inputs and
developing climate change adaptation strategies suitable to the different agro-ecological zones
should be pursued.

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