1.

Introduction
1.1. Background

As world population grow from 1.6 billion to more than 6 billion during lost
century and expected to reach more that 7 billion by 2011 (tamrat Tsaga, 200),
agriculture become a corner stone 4 glob food security, under developed countries
like Africa have more than a fair share of population increase as their population
growth rate are order 3 percent to 3.2 percent per year most of the people in the
sub-Saharan Africa do not have access to enough food to meet their needs for
health and prediction life often going hunger’s and not knowing where their next
meal come from. This usually further form food and die of disease associated with
poverty. One of sub-Saharan countries (SSAC), Ethiopia has ofAgricaltural
productivity that doesn’t match with its population growth.

The overall performance of economy is highly correlated with performance of

agricultural and the productivity of agricultural practices is a key factor for the
development of the country. Tamrat Tsaga, 2004).

More than 80 percent of Ethiopian population is depended on agricultural

production. Despite depending on agriculture however, productivity of the sector is
very low due to scarcity of rainfall, environment degradation and laser, improved
seeds and mechanism. To prevent such a situation a payment at regional as well as
national level has been devising and introducing different programs. For instance,
the extension packaged that is working in introducing agriculture inputs and
technologies cloud mentioned (Grade 12 text book).

Oromia region is one of the regions of Ethiopia. In the region agriculture remains
to be the dominant economic sector. It is the major source of food,

1
raw materials for local industries and export earnings (BOFED, 2011)The regions
largeness in terms of area and diverse agro-ecology endowment, give high
potential for production of a variety of agricultural products both for export
purpose and domestic consumption.

The regions agriculture is characterized by low external, input use, productivity,

highly rain fed and as well as high nutrients depletion and soil erosion that limit
farmer’s ability to increase agricultural production and reduce poverty and food
insecurity (BOFED, 2001).

The region suffers from recurrent growths and pest invasion of the 60 woredas in
the region are drought prone and chronically food insecure (CSA, 2007). In the last
two decades, per capital poverty have become chronic problems in the region
(Mahmed et al, 2008).

The USAID estimated a population growth rate of 3% perineum and doubling time
of 25 years. This rapid population growth rate has led to sever land shortages (per
capital land area had fallen from 0.5 ha in the 1960s to only 0.2 ha by 2008) and
rapid natural resource degradation (David et al, 2010). On the region 94% of
households have insufficient land to meet their food needs. Rural households are
completed to clear and cultivate marginal lands on steep hill sides because this lack
alternative means of intensify agriculture. Reducing these challenges’ in the
region, tractor, depends on the growth and development of agriculture. Growth and
development of agriculture is important for a number of reasons: 1) to alleviate
poverty through income generation and employment creation; 2) to meet growing
food needs driven by rapid population growth; 3) to keep food price low, both for
urban and the many rural households how are not food buyers; and 4) to conserved
natural resources (Minale et al, 2010).
Abicha and Gnea is one of the wored of oromia which characterized by it low
productivity. The main reason of technologies like using fertilizer improved seeds
and mechanism (BOFED 2011).

One of the means by which farm level productivity can be increased is through the
introduction and dissemination to improved agricultural technologies. These
include improve sees, chemical fertilizers and extension services for small food
staple crops (BOFED, 2011).

This study gives emphasis for chemical fertilizer, which is becoming important
limiting factors for crop production in the wodreda. Must developed countries have
improved their agriculture and economic well being significantly through increased
use of modern technology including I proved seeds and application of chemical
fertilizer. Normand. “The farther of green revolution” fuel that powers it
(Alemaycho et al, 2008).

Both the regional and woreda administrative believed that the use of improved
technologies can boost agricultural production and productivity. The participation
of these governments was reflected through the attention given to the
establishment of cooperatives. So that cooperatives participate in input output
market and serve the rural community of large. In order to properly transfer and
disseminate improved technologies to farmers, the role of multiple purpose
agricultural cooperatives and primary cooperatives working to increase agricultural
production and productivity in the woreda.

For example kardega primary farmers cooperatives and Sokoru primary

cooperatives five the fertilizer for the members of the cooperatives (BOFED 2011).

Generally, agriculture in the region is characterized by its low productivity. The

reason for this is the use of limited agricultural technologies and decline of soil
fertility due to continuous copping. In order to enhance productivity of agriculture
the use of modern agricultural technologies (fertilizers) is one option. Hence, the
existence of farmers cooperative is indispensable for supplying fertilizer to framers
at the right time place and reasonable prices.

1.2. Statement of the problem

Poverty and food insecurity are severe in the woreda using to the low level of
agricultural productivity and production. Low level and in appropriate use of
improved technologies. (Abebe, 2011).

Growth in agricultural production in the post achieved through expansion of farm

lands as means of increasing agricultural production because of high population
growth in the woreda. Therefore, if it is impossible to use expansion of lands for
augmenting agricultural production it is better to resort to the use of improved
technologies.

Changes in technologies like improved seeds and fertilizer are the major source of
productivity growth though change in factor ration will have impact on
productivity. Technologies change can increase the productivity of both factors
(land and labor). Though the practice it will of necessity be biased in one
direction , changing the ration between returns at the margin to one factor or the
other (EEA report of Ethiopia economy vol 11, 2007/08). For millennia, Ethiopia
farmers have been using traditional system of fallowing, crop rotation, manure and
wood ash to maintain soil fertility and their crop yield. Thus, using chemical
fertilizers is recent in Ethiopia it started in the late 1965 along with the launching
of integrated agricultural programs and projects. Since then after, a number of
institutions have been attempting to generate and disseminate improved
agricultural technologies to small holders (Heises and Mwangi, 2008).
Fertilizers can complement other major inputs and practice (e.g. improved seeds,
better water control) that have had the greatest impact on yield. Soil nutrients
depletion is a common consequence of most Africa agriculture. Improved organic
techniques of nutrient supply will undoubtedly contribute to future soil health and
productivity but relying only on nutrients recycling, however efficient will not
generate the food production increases required in SSA nor will it restore depleted
soils for the foreseeable future. The environmental consequences of continues low
use of fertilizers through nutrient, mining and increased use of marginal lands are
more inevitable and devastating than anticipated form increased fertilizes use
(Heisey and Mwanp: 2008).

Most of the ferment in this woreda are small scale farmers using traditional inputs
and many rely on rain ted farming that does not result to higher yield. The existing
low level use of agricultural technologies (for example fertilizer are socio
economic, institutional and house hold factors. Factors influencing input (fertilizer)
use can be broadly categorized as ferment specific, farm resource and market
arrangements and access to information (Assefa and Gezhaegn, 2010).

Farmers’ personal attributes such as education, age, sex wealth etc... and the
resource base of the farmers such as farm size, access to credit, availability of
labor, number of oxen, and the distance of the households. Residence from the
center or main road, access 40 information, extension services etc are factors that
determine the use of chemical fertilizers. Most of the farmers have used chemical
fertilizer supplied through KDFC in 2011/12 cropping season, but the rate of
application is by for below the recommended rate which is on average 130 kg per
hectare for DAP and 130kg per hectare for UREA.
Table 1.1 fertilizer recommendation rate

Crop type DAP(vp/ha) UREA.kg/ha) Total

Teff 150 150 300
Maize 200 200 400
Dagusa 100 100 200
Barley 100 100 200
Wheat 100 200 300
Average 130 150 280
Source: Fiche zurial woreda agricultural rural development Bureau.

Factors such as shortage on late delivery of fertilizer, increase in price, low access
to credit and extension service low efficiency of the role of cooperative in
distribution and marketing of inputs, fertilizers being an important commodity that
require huge amount of foreign exchange, low awareness, etc could be mentioned
as the major constraining factors for less amount usage of fertilizer in the district.
Thus improving the marketing and use of fertilizer form as current low level have
to be priority tasks to enhance agricultural production and productively; and
enhancement of the role of cooperatives to make the system sustainable(Abebe,
2011).

Increasing the number of cooperatives, the right quality and quantity input supply
are decisive factors to improve agricultural input use. So that such problems have
to be to be tackled in order to increase farmer productivity and boost the benefits
they gained from their cooperatives. Cooperatives can play significant role by
supplying agricultural in puts, if they can secure credit form financial institutions
for purchasing inputs and recover the extended loans timely form members who
are posing a great challenges for many of primary cooperatives.
Governments should give emphasis to avoid the challenges they are beyond the
capacity of the cooperatives in order to boost agricultural products and production.
Generally future increase in agricultural technologies and this can be further
facilitated by the cooperation of the government, the cooperative and households
on top of that, this study aimed of identifying factors that influence the use of
fertilized marketed through cooperatives among farmers to shed some light on this
important issues.

1.3. Objectives of the study

1.3.1 General objective of the study

The general objective of the study was to identify factors that affect the use of
fertilizer input by farm household in Abichu and Gnea woreda zuria kebles

1.3.2 Specific objective of the study

. To empirically examine factors that determines fertilizer use by small

holder farmers

1.4 Significance of the study

The result of this study would indicated which particular socio economic factors
that determine fertilizer use of farmers should be given due consideration in project
design and implementation such as the delivery of extension services and
increasing the number and efficiency of primary farmers cooperatives in the study
area.

Agricultural cooperatives are supposed to increase efficiency of the marketing

system and promote agricultural development in rural sectors of the economy.
Hence, analyzing the benefits and challenges of improved input (fertilizer) supply
through cooperatives would help policy makers know which factors to target to
improve the livelihood of farmers.

This study would also serve as a humble beginning for further research work and
agricultural development projects that would greatly benefit the small holder
farmers in the study area.
CHPTER TWO

1. Review of literature
1.1 Theoretical review

Fertilizer refers to analyzing added to the soil with intention of increasing the
amount of plan nutrients available for crop growth (SROFMP, 2001/02). Inorganic
fertilizer is any chemical compound used for supplying one or of the essential
planned food elements chemical fertilizers are inorganic or synthetic materials of
concentrated nature. They contain one or more plan nutrients in easy soluble and
quickly and compost while chemical fertilizer consisted of DAP (Di-Ammonium
phosphate) and UREA (Ammonium nitrate).

1.1.1. Economic significance and Demand of fertilizer

The poor soil fertilizer for production is one of the major problems that have
constrained the development of an economically successful agricultural in
developing countries. Agricultural production can be boosted by increasing inputs
and or by introducing modern agricultural technologies. That means agricultural
growth based in continuous increase in yield required technological changes.
Chemical fertilizers are one of source of plant nutrients which can relax soil
fertility constraints , however, in the previous time, most of the growth in
agricultural production in less developed countries has been due are explanation
and not to yield increasing technologies, bringing the cultivation of gracing lands
and considerable forest lands and brought environmental degradation (Abebe,
2011).
Promoting use of highly improved agricultural technologies (fertilizers, seeds and
improved management practices) is one venue for raising productivity of
agricultural and stimulating and increasing effective demand and incomes.
Promotion of fertilizer usage for instance including the use of governmental
subsidy can be expected to have multiple benefits growth in agricultural output
increased national food security increase in income in the rural sector maintenance
of soil fertility and structure and the limitation of soil erosion and deforestation of
the pressure to utilize more fragile ecosystem is reduced (Abebe 2011) . Generally,
fertilizer use increases land productivity though yields increase and increase labor
productivity and created additional employment through the back work and
forward linkage f fertilized production consumption and distribution, fertilizers
also complement other major inputs and practice (for example improved seeds,
better water control). That has had the greatest impacts on yield (Heiset, and
Mwang, 2008). Therefore, the fertilizer or the provision of fertilizer is one of the
essential factors which play a great role in improving agricultural productivity.
Agricultural revolution that has occurred in developed countries has led to a great
increase in productivity, particularly due to the use of fertilizer in line with this the
use of inorganic fertilizer has also significant role level on local varieties in which
reposes are generally believed to be low (Abebe, 2011).

It is a mere fact that fertilizers play a pivotal role in a generating crop production.
Its importance cannot be over emphasized especially in a country like Ethiopia,
where the plant nutrients are mined for a century and crop production is stagnated.
Consequently, the demand for the input expected to increase sear to year, genuine
fertilize most available of the required time, place and kind to the farmer.
Theoretically the demand for the input (fertilize) depends of the profitability of
fertile and profitability of fertilize depends up on the supply price of fertilizer and
prospective yield of fertilizer (sonic, 1995). Therefore the inputs (fertilizers) to be
demanded the input.

Compensating farmers for higher price for future uncertainties.

The literature also indicated that the demand for fertilized is a derived demand
from a given aggregate production function for agricultural commodities. (Abebe
2011).

Agricultural technologies have the potential to improve the livelihood & formers in
developing countries by increasing the productivity and land and labor. In view
and this, a many efforts were made by the government to improve supply and use
of fertilizer and other agricultural inputs.

As a result, agricultural inputs and extension services have rapidly been expanded
in closely related manner (Abebe, 2011) however, the of utilization of this
technology by the farmer is still very low.

The situation is further exacerbated by insufficient supply of other agricultural

technologies such as chemical and farm implements.

Promoting the use of fertilizer and other inputs of equipment production and
productivity, therefore, it is extremely important.

Hence, the ultimate objective of the supply sector of fertilizer is to ensure that the
new factors (fertilizers) are available in ample supply and at reasonable prices.
Moreover, the supply of fertilizer depends up on the financial back up and
efficiency of agricultural primary cooperatives, the importation and manufacturing
costs of fertilizer round the user etc… however the supply of input (fertilizer) and
its acceptability by framers may not be sufficient unless there are additional
knowledge and skills by farmers for its use. Therefore, the farmers must be a ways
of the techniques and requirements t utilize the input (fertilizer) properly through
schooling and trainings.

1.2. Empirical review

Fertilizer use or adoption decisions are made at the household level, so it is

imperative to understand the set of factors influencing households’ decisions.
Previous adoption and intensity studies in Ethiopia have examined a wide range of
factors; results have not always been consistent across students in Ada district of
East shewa Zone. The results showed that form to total of 12 explanatory variables
included in the model education level, number of oxen owed, cultivated land size,
family size and saving habit of the respondents were found to be the most
significant variables contributing to the amount of fertilizer use positively, while
age of house hold head influences it significantly on negatively. As a result, the
study suggests that improving the livestock sector, educating households and their
family members, giving attention in promoting nonfarm activities in rural areas
and promoting saving habit are some of the important priority areas for the
success of future intervention strategies aimed at the promoting of production
increasing technologies and sustainable credit facilities. Mohamud et al (2008).
Provide empirical evidences of production risk impact on sustainable land
management technology adoption using two years of cross sectional plot level data
collected in Ethiopia highlands. The results revealed that impact of production risk
varied by technology type. Production risk (variance and crop failure) had
significant impact on fertilizer addition and extent of adoption.

However, this impact was not observed in adoption of conservation technology, on

the other land expected return has opposite significant impact on both fertilizer)
adoption and intercity) and conservation adoption. Economic instruments that
hedge against risk exposure, including down side risk and increase productivity are
important to promote adoption of improved technology and reduce poverty in
Ethiopia Teame Hailemariam Tadele (2011) has investigated.

The determents of the like hoods of fertilizer adoption and the intensity of fertilizer
use in Tigray region, Ethiopia by using Probit and Tobit models. The study showed
that the probability of fertilizer adoption were mostly explained by the households
education status, labor endowment, farm size, the number of plots, the distance ot
plots form homesteads, oxen ownership and the distance to market form residence.

On the other hand, the intensity of the input use was largely explained by the house
hold head’s education status, farm size, use of manure, number of plots and oxen
ownership. Kuume Euphrase Be-Housasa (2012): Heck man’s sample selection
analysis is used to investigate the factors which influence the adoption and
intensity of use of the fertilizer on small holder farms growing cocoa in western
Cote D. lvior. The results indicated that farmers’ risk perceptions and risk aversion
are strong determinant of farmers. Fertilizer adoption and intensity of use
decisions.

Other variables such as education, membership of association, farmers liquidity,

farm size, hired labor, soil fertility and access to credit has been found to be
important in explaining farmers’ decisions.

Mulat et al. (1997) used regression analysis (selection model) to study about
agriculture market performance and determinants of fertilizer use in Ethiopia. The
results showed that, the most important factors explaining the quantity of fertilizer
used per hectare are average farm size and the amount of livestock owned.

Also the number of distribution centers of fertilizer of fertilizer and area under teff
are highly significant explanatory variables.
CHAPTER THREE

3 Methodology
3.1 Data type and techniques of data collection

The data which the researchers used were mainly cross section primary data. These
primary data were collected for the members directly through structured survey
questionnaires of the two kebeles (Kardega and Sokoru) which were served by the
mendida primary farmer’s cooperative.

3.2 Sample size and method sampling

A three stage random sampling method was used to select the sample respondents.
In the first stage form 10 primary cooperatives found in mendida word primary
farmer’s cooperative from Gamo multipurpose cooperative union (having 54
member primary cooperative) was selected randomly.

In the second stage form 4 kebeles accessed fertilizer though mendida cooperative,
2 kebeles were selected randomly.

In the third stage form the two kebele 100 sample farmers were selected randomly
form the list of members of the cooperative taking fertilizer in cash and/or credit in
2011/12 cropping season using probability proportion to size in each kebeles.

Table 3.1 Number of sample respondents

Name of kebele Total number of members

Female Male Total Sample size

Kardega 28 69 897 39
Sokoru 45 451 496 21
Total 73 520 1393 60
 3.3 Method of data analysis

For the descriptive statistics mean, standard devolution, minimum, maximum and
percentages were computed to analyze the data.

3.3.1 Economic model

Multiple liner regression model (MLRM)

In addition to its wider application multiple linear repression analysis a general

techniques which can be fitted to all kinds of variables, for instance, Abebe (2011)
used linear regression to describe the functional relationship between fertilizer
credit repayment and factors influencing both of them.

Multiple liner regression models can be specified of following

Y= Bo + £β+ £βji+Uj where i= 1, 2, 3---- 100 (sample size), J=1, 2, 3----

10(number of explanatory variables, and yi=dependent variable (amount of
fertilizer use)

Βo=intercept

Βi= coefficient of Jth independent variable

Xji= independent variable

ui= unobserved error or disturbance term.

In this study MLRM was used to analyze factors influencing input (fertilizer) use
among sample farm house hold.

Hypothesis and definition of variables

Based on the literature reviewed and concerning the socio economic and farmer
specific characteristics of respondents in the study area. The explanatory variables
selected for this study were broadly categorized under socio economic, institutional
access and household factor. A brief explanation of the explanatory variables
presented as fallow.

Dependant variable (fert-used) it is a continuous dependent variable which

captures the amount of fertilizer (both DAP and UREA) used per qt in 2011/12
cropping season.

Independents variables which takes a value 1 if the house hold had contact with
extension workers and received extension services and other wise. The variables
representing extension service as a source of information and advice has influence
on the respondents fertilizer use (Abebe, 2011). Therefore, this variable is
hypothesized to have positive influence on fertilizer use.

Credit access (credit yes on); it is dummy variable which takes a value 1 if the
house hold had credit access and otherwise. Accessing credit by the household
means having potential of procuring the input in cash, if the loan is in money or
getting the kind input (e.g. qt of fertilizer), if the loan is physical loan. Therefore
credit access helps households too finance required capital to buy the input and
hypothesized to have positive impact.

Farm size (farm size): this variable incorporated the total amount of cultivated
land. It includes own land, related form or shared with other households land. A
farmer who has larger farm land can earn higher income from farm production than
a farmer with small plot of land. Larger farm lands are also important tool for risk
mitigating purpose (Abebe, 2011). Therefore this variable is expected to have a
positive influence of fertilizer use.
Saving habit of the household (saving yes-no): This is dummy variable which takes
a value of 1 if the respondents has saving behaviors (such as in edir, ekub, in group
saving etc) and 0 otherwise. Farmers usually save from their proceeds for
consumption smoothing purposes throughout the year, for accumulation of wealth
and for unforeseen contingencies (crop failure or accident). Saving enables farmers
to easily purchase agricultural inputs when price of agricultural products are not
good or when there is crop failure.

The more the amount of saving, the greater the capacity to purchase and use inputs
(Abebe 2011). Therefore, it is hypothesized that this variable will have positive
influence on the dependent variable.

Crop income (Crop income): This variable represents the total income generated
from cereal crops measured in birr during a particular year (2011/12). Explicitly,
the crops included to define this variable are ‘teff’ wheat, maize, barley, dagusa
and rice only. The monetary value of these crops was calculated by using their
respective average market price of the year 2 011/12(the data of price was taken
from abichu and Genea woreda. Agricultural production forecast and price
information Bureau). The higher crop income means, the greater the ability to
purchase and use fertilizer by farmers. Therefore the coefficient of this variable is
expected to appear with positive sign.

Non- crop income (non crop income): this variable is defined as the about of
income generated from activities other than the production of crops. Income of
from the sale of livestock,, honey, hen and egg, milk and milk products,
eucalyptus, from wage labor and perennial three crops (Gesho, coffee, mango,
Avocado etc except chat).
Sumed together to define the variable. This additional income would back the
farmers up to purpose inputs even during bad harvest seasons. During this time,
farmers who practice non-crop activities can use fertilizer than those who do not
involve in non-crop activities. Therefore, non-crop income is a very important
source of cash for farm. It is expected that this variable will have positive
coefficient.

Income from the sale of chat (chat income) it is a continuous variable which
incorporated the income that comes from the sale of chat. This additional income
that come from the sale of shat will back the farmer up to buy inputs (fertilizer).
Therefore, variable expected to have positive influence on fertilizer use.

Number of livestock owned (livestock); this variable is defined in terms if number

not in tropical livestock unit (TLV) and represented the total number of livestock
(sheep, goats, caws, cattle, donkeys, horse and mules).

Excluding oxen owned by the household, livestock may serve as purpose of input
such as fertilizer by selling them or their products. Therefore it is expected that this
variables has positives influence on fertilizer use.

Number of oxen owned (oxen owned): it is continuous variable represented by the

number of oxen owned.

Households who have more number of oxen have better performance in consuming
fertilizer (Abebe, 2011).

Therefore it is hypothesized that this variable influences fertilizer use positively.

Family, size (family size): if represents the number of people living within the
house hold. The larger the family members the more the labor force available for
production purpose. Therefore, it is expected that this variable has opposite impact
on the use of fertilizer.
CHAPTERE FOUR

4. Results and discussion

This chapter presents the results from the descriptive and economic analysis. The
descriptive analysis made of 7 tools such as mean, maximum, minimum, standard
deviation and percentage. Econometric analysis was carried out to identify the
most important factors that affect fertilizer use and to measure the relative
importance of significant explanatory variables on fertilizer use and to measure the
relative importance of significant explanatory variable on fertilizer use.

4.1. Descriptive analysis

The socio-economic institutional and household characteristics of the respondents

were analyzed using descriptive statistics.

Table 4.4 Descriptive out put

Stata mean Max Min sum St.deviation

Family size 6.7 12 1 678 2.393172
Crop income 7563.292 15989 1622 756329.3 3422.04
Non crop income 5208.32 21220 0 520822 4085.034
Farm size 2.32875 5.5 0.25 332.875 1.207308
livestock 8.58 24 0 858 5.481244
Oxen owned 2.44 5 1 244 1.06667
Extension 0.65 1 0 65 0.4793725
Credit yes-no 0.5 1 0 50 0.5025289
Chat income 31.67999 166.667 0 3167.999 27.94348
Saving yes-no 0.66 1 0 66 0.4768952
Fertilizer used 3.506 7 1 350.6 1.442785
Fertilizer/hectar 1.84217 6 0.416667 184.217 1.077721

4.1.1. Household characteristics

Family size of respondents

Family size of the sample respondents raged for 1 up 12 people, with average
family size of 6.7 and a standard deviation of 2.3931. The average family size in
the sample was higher than the region’s average family size 4.3 persons (2007,
CSA).

4.1.2. Economic characteristics of the house hold

Farm size

The cultivate land site (own, rented and shared) of sample households very
between 0.25 and 55 hectares with on average holdings of 2.32875 hectares and
standard deviation of 1, 207. The standard deviation (1.207) is the smallest next
to oxen owned, showing there is almost little variability of holding cultivable land
among the sample households. The maximum and minimum values showed that,
14, 3 qt (i.e., 7.15 qt DAP and 7.15 qt UREA) and 0.65 quintal of fertilizer (i.e.
0.325 qt DAP and 0.325 qt UREA) should Beas per the recommended rate (130 kg
DAP and UREA per hectare on average). .

Chat income

Among the 100 sample respondent only four are those which did not earn income
from the sale chat. Despite the fluctuation in the volume of chat(due to rain full
and irrigation seasonality) farmers on average earned 31.67 birr per day according
to survey. In the study area, income from chat ranges between 0 and 166.666 birr
per day standard deviation of 27.94birr .most respondents used income earned
from chat for purpose of meeting day to day expense such as salt, mobile cards,
shoes, kerosene, and etc.But beyond this income from chat are also important
source of funds to purchase fertilizer in the district.

Number of oxen owned

According to the survey oxen owned varies between 1 and 5 oxen with an average
of 2.44 oxen and standard deviation of 1.06 in study area only ox was used for
plough and none of the respondents used tractor for their farm lands in 2011
cropping season. The total sample households owned 244 oxen for drought
purpose.

Number of livestock owned

The number of livestock owned by the household ranges between 0 and 24 with an average
holding of 8.58 livestock and slandered devotion of5.481. Only two respondents failed to have
livestock. While the remaining 98 respondents owned livestock which ranges between 1 and 24.

Non crop income owned

The major none crop income generating activities practiced in the study area where
been keeping (honey),sale of livestock, hen and egg, milk and milk products daily
labor and planting perennial tree crops etc.The income generated from non-crop
activities varies from households to households with minimum and maximum
values of birr 0 and 21220 respectively. The source for input purchase and
consumption expenditures.
 Crop income

The average income earned from crops in 2011/12 production year was birr
7563.292.The income earned by households from crop ranges between 1622 and
15909 birr with a standard derivations of 3422.04.The data showed that all the 100
respondents secured income from crop production in 2011/12cropping season.

Amounts of fertilizer used by sample households

The sample survey obtained from 100 respondents verified that all sample
households use chemical fertilizer for their cultivation in the main cropping season
of 2011/12. According the survey the use of fertilizer varies from a minimum of
1qt to a maximum of 7qt and with a mean of 3.506qt of fertilizer and with a
standard deviation of 1.44.The maximum amount of fertilizer used (7qt)requires
2.69 hectares of land, but in study area the maximum amount of cultivated land
was 5.5 hectares (which regret).This analysis tells us there is problem in the
utilization of fertilizer on the study area (fertilizer use per hectare is below the
recommended rate on average).

4.1.3 Social and institutional Access characteristics Extension

Service

The result of the sources indicate that 65% of the respondents have got enough
knowledge about the importance of being member in the cooperative, fertilizer
application form extension agents, while 35% did not have any training or
education form extension agents regarding fertilizer application and any other
agricultural advice.
Saving yes-no

According to the survey 64% of the sample households saved money in different
saving and lending institution such e.g. in ekub, idir, in OSCI and Bank. About 64$
of the respondents save for consumption smoothing and contingency purposes in
weekly and monthly basis.

Credit access

According to the survey, 50% of the respondents accessed credit and 50% did not
OSCI is highly involved in borrowing money for farmers in the study area. There
is also a habit of borrowing money by farmer form saving and lending farmer
groups, but if they are member.

Multiple linear repression models

The objective of the studs was to empirically example factors that determine the
use of chemical fertilizer among farm households which is on important limiting
factor for crop production. The result of the survey indicated that all of the
respondents have used chemical fertilizer supplied though primary cooperatives in
2011/12 cropping season though the rate of application 1.84 qt of fertilizer on
average (Table 4.1) is below the recommendation rate which is 2.6 qt fertilizer
(DAP and UREA) per hectare.

A multiple linear regression model was fitted to identify a set of variables that
cause variables in the dependent variable (amount of fertilizer used). The
regression analysis was carried out using statistical software called STATA. The
variables included in the middle are listed in table 4.2. Below.
Table 4.2 description of variables

Variables Description Types Measurement

Extension Extension contact of the respondents Dummy 1=yes, 0=No
Credit yes –no Credit access of the respondents Dummy 1=yes, 0=No
Saving –no Saving habit the house hold Dummy 1=yes, 0=No
Chat income Income from chat Continuous Birr
Livestock Number of livestock owned Continuous Number
Oxen Number of oxen owned Continuous Number
Family-size Family size of the house hold head Continuous Number
Farmer size Farm size Continuous Hectare
Non crop income Non crop income Continuous Birr
Crop income Crop income Continuous Birr
Fert-used Amount of fertilizer used (dependent variable) Continuous Quintal
Source: own survey of 2013

4.2. Results of the regression analys0.is

The result of multiple regression analysis showed that , form 10 explanatory

variables used in the model, only saving habit, credit access, number of livestock
owned, extension service and chat income where significant (at 5% level of
significance) to influence fertilizer use among respondents (Table 4.3).

Table 4.3 output of multiple linear repression models

Number of observation=100

f (10, 89)=10.36

prob>F=0.000

R-squared =0.5378
 Adjusted β-squared =0.4859

Root MSE =1.0345

Fert-used (dependent) β-coefficients sd t-values P>(t)

Extension 0.790*** 0.284 2.78 0.007
Credit ages-no -0.690** 0.283 -2.44 0.017
Chat income 0.0115** 0.004 2.46 0.016
Saving-no 0.599** 0.255 2.34 0.021
Oxen owned 0.167* 0.145 1.15 0.252
Livestock 0.113*** 0.028 3.93 0.000
Farm size 0.007* 0.112 0.07 0.945
Non crop income -65 0.000 0.02 0.981
Crop income 0.00003 0.000 0.91 0.365
Family-size -0.043 0.445 2.75 0.007
Constant 1.227 0.445 2.75 0.007

***, ** and * represent the level of significance at 1%,5%and 10%respectively.

The effects of these significant variables on the depend variable are discussed
below.

Extension contact (extension): the coefficient. Households who have extension

contact use 0.788 more qt of fertilizer than those who have not extension contact.
The positive and highly significant coefficient of this variable indicated that
provision of regular and frequent extension series by development agents with in
the ferment development center plays fundamental role on the use of fertilizer by
form households.

Credit access (credit yes –no): contrary to the expectation, this variable appeared
with a statistically significant (a+5%) negative confident. Accessing credit by a
house hold reduces the amount of fertilizer use by 0.688 87, ceteris paribus. Under
normal conditions access to credit market offers farm households the opportunity
to obtain the resources necessary to purchase farm inputs such as fertilizer. But
here it is not the case.

Access to credit retards the use of fertilizer instead by 0.688 qt. The researchers
believed that this may be due to credit fungi ability (loans targeted for purchase of
fertilizer may be used for buying shoes) and short term nature of credit. If farmers
use credit for purchasing shoes and clothes (or for other un productive or quite
different purposes against the line of credit). They will fail to repay the loan. But if
they used off for purchase of inputs such as fertilizer, they can reap returns from
the inputs (which have a potential of increasing production and productivity) other
things remaining constant. Again the short term nature of credit poses and their
challenge of farmers not to purchase fertilizer and other agriculture inputs by the
funds they get through credit. Due to risk and uncertainty in agriculture, farmers
become reluctant to for the purchase of inputs (fertilizer) by the loan they got
through credit. And their fear against loan difficult forces them to decide to hold
the money idle to repay it in the next year if they borrowed this yr=ear. Therefore,
these and other factors may be reasons for the negative influence of credit on input
use.

Income from chat (chat inc): This variable was found to influence significantly (at
5%) and positively the amount fertilizer use. The additional income that come from
the sale of chat back farmers up to use more amount of fertilizer. A birr generated
form that will increase fertilizer used by 0.01 qt, keeping other things constant. The
result of this study revealed that chat is an important vehicle for generating income
which can be used for purchase of sufficient amount of inputs for crop production.

Saving habit (saving yes-no): As expected the coefficient of this variable appeared
with positive sign. There is 0.59987 fertilizer use deference between households
who save and do not save according to the regression result. In other words, the
ability to save increases fertilizer used by 0.599quainatals. Cetiris paribus, and
form of saving can help farmers acquire improved inputs (fertilizer) and allow
them boost production holding other things constant.

Number of livestock owned (livestock)L number of livestock owned has

significance and positive influence on fertilizer use at 1% level of significance.
One additional amount of livestock can help farmers to increase amount of
fertilizer by 0.113 qt, keeping other things.

The out of the model also showed that, the explanatory variables included in the
model have 53% (when adjusted 48%) explanatory power. The F-statistics showed
the joint significance of the explanatory variables. The F-value (10, 89) is greater
than the critical values of 10 and 89 df of the numerator and the denominator
respectively, and assures the rejection of the null hypothesis (all variables have no
influence on the dependent variable). If so, the model can help estimate the
relationship between fertilizer use and the hypothesized variables.

4.3.1. Multi- co linearity test

Multi co linearity means existence of a “perfect”, or exact, liner relationship

among some or all explanatory variables of regression mode. The existence of
multi co linearity might cause the estimated coefficients to have wider confidence
intervals, higher R2 with insignificant t-rations and wrong signs that might lead to
wrong conclusions. Accordingly, if multi co linearity exists between variables, it
does not give sense in including all these variables, independently; rather one of
these correlated variables is enough. Moreover, it will be difficult to assess the
separate influence of each independent variable with multi collinerity. This is what
in CLRM, the problem of multi collinearity must be checked and if it exists, some
remedial measure must be taken. In this paper, the following tables how the results
of multi collineartiy test.

Table 4.4 contingency coefficients for dummy variables

Extension Credit yes –no Saving yes-no

Extension 1.0000
Credit yes –no 0.5661 1.0000
Saving –no 0.2700 0.4644 1.0000

Table 4.5 VIF test for multi clollinearity

Variable VIF 1/VIF

Livestock 2.31 0.432200
Oxen owned 2.22 0.450968
Farm size 1.75 0.582777
Chat inc 1.59 0.629667
Crop in come 1.39 0.828944
Non crop income 1.21 0.945392
Family –size 1.06 0.945392
Mean VIF 1.64
The most familiar rest of detecting the problem of multi co linearity
variance inflation factors (VIF) for contusions variable and contingence
coefficients for dummy variables where used. Both the results Cleary showed that
there is no problem of multi collnearity among variables. A rule of number if value
of VIF for any variable was greeted than 10, then we would say there is a serious
problem of multi co linearity. However, if is by far less than 10 implying there is
no problem of multi collineartiy. And for dummy variables, if contingency
coefficient of a variable exceeds 0.75, there is a problem of multi collinerity among
variables. Again contingency coefficients are by far less than o.75.

Therefore, all explanatory variables were retained in the model.

4.3.3. Normality test

The normality of the disturbance term is also required in estimating the parameters.
If this is not the case, all the tests that have been used to far will be invalid.

The parameters to be estimated must be the functions of normally distributed

variable (which is most of the time disturbance term). Normal probability plot
(NPP) and histogram of residuals used for the test of normality of the disturbance
term. A comparatively simple graphical device to study the shape of the probability
density function of a random variable is the normal probability plot which makes
use of normal probability paper, a special designed graph paper. On the horizontal
axis, we plot values of the residuals and on the vertical axis we show the expected
values of the variable of id were normally distributed. If the variable is form the
normal population, the normal probability plot will be approximately a straight line
(Gujarati, 1995). Figure 1 shows that the residuals are approximately normally
distributed, because a straight line seems to fit the data reasonably, well.

CHAPTER FIVE
5. Summary and conclusion
5.1. Summary

This paper by using a MLRM, empirically examined the factors that determine
fertilizer use among farm households. A one year cross-sectional data were used.
The data were collected form randomly selected farm households in kardega and
sokoru kebele through structured survey questionnaires.

Then variables were entered in to the repression model and five variables were
found to be statistically significant at less than 10% level of significance. These
variables are extension contact, credit access, chat income, number of livestock
owned and saving behavior of the household. Except credit access. All the other
variables had the expected sign which is consistent with the economic theory, on
the other hand crop and non crop income. Family size farm size and oxen owned
had no statistical significance impact on fertilizer use due to reasons that are
unknown to the researchers.

5.2 Conclusion and Recommendation

Based on the findings of the study, the researchers put the following inprtant
recommendations.

 The study found evidence for the significance of livestock influencing

sufficient input (fertilizer) purchase. It is therefore, important that die
attention should be given to the livestock sector to improve their health,
feed, genetic and management conditions.
 The study revealed that income obtained from shat sale positively and
significantly influenced farmers’ fertilizer use. This clearly indicated that for
 effective utilization of improved technologies. Resources should be
reallocated in agricultural sector to more productive and complementary
sector each as chat plantation.
 In most of the literature and economic theories, credit was perceived an
important engine in agriculture, m especially for agricultural input purchase
and adoption decisions, if managed in proper way. But this study revealed
that credit access influence fertilizer use negatively and significantly. (the
researchers believed fungibility and short term nature of credit will be the
reasons). With regard to this, the researchers recommend that for effective
utilization of improved technologies (fertilizer), the credit sector should
regularly supervise and make stiff fallow-up on the utilization of credit to
avoid the interchangeability of the uses to which credit can be put. In
addition, the nature of credit should be in long term basis to avoid the tear of
farmers to loan difficult.
 Both saving habit and exiting service are integral parts of economic
development that help farmers enhance crop production and productivity.
Separately saving habit and extension contact influences fertilizer use
positively and significantly.
 Agricultural cooperatives are playing significant role by supplying
agricultural inputs. So governments due emphasis to the cooperatives in
order to boost agricultural products and productions.