Professional Documents
Culture Documents
Department of Economics
ID NO: BDU1110446
February 2021
Bahir Dar University
Department of Economics
A THESIS SUBMITTED TO BAHIR DAR UNIVERSITY, COLLEGE OF BUSINESS AND
ECONOMICS, DEPARTMENT OF ECONOMICS IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR THE DEGREE OF MASTERS OF SCIENCE IN DEVELOPMENT
ECONOMICS
I
DECLARATION
I, the undersigned, declare that this research study is my original work!!
……………..…………………………………
SIGNATURE
MULUGETA ABEBE
February 2021
II
ACKNOWLEDGMENT
I have taken much effort in completion of this research. However, it would not have been
possible without the kind support and help of many individuals, organizations and I wish to
express my deep, humble appreciation to my advisor, Dr. Belayneh for their patience, criticisms
and corrections made to this study. I would like to extend my sincere thanks to all of them next
to GOD!!
III
LIST OF TABLES
Table 3.1. sample size determination criteria................................................................................27
Table 3.2. numbers of sample selected from each kebele.............................................................27
Table 4.3. summary of descriptive statistics..................................................................................34
Table 4.4. Decomposition of continuous variables decomposed by sex of households head.......35
Table 4.5. Decomposition of continuous variables by educational status of households head.....36
Table 4.6. Decomposition of maize production per hectare of land by access to credit...............37
Table 4.7. Decomposition of maize yield per hectare by soil fertility..........................................37
Table 4.8. Decomposition of maize yield per hectare by access to extension service..................38
Table 4.9. Propensity score matching result for education............................................................41
Table 4. 10 common support test result for education...................................................................41
Table 4.11. Estimated PSM results of non-formal education........................................................42
Table 4. 12 Common Support test result for non-formal education..............................................43
List of figures
Figure 2.1. Conceptual frame work...............................................................................................21
Figure 4.2. Educational status of households heads by sex...........................................................34
Figure 4.3. Decomposition of maize yield per hectare by non-formal education.........................39
IV
ABBREVIATIONS
V
ABSTRACT
Improvement of a human competence for agricultural productivity is a pre-requisite for social and
economic development for rural areas. Education has been recognized to be a leading device for
shaping people’s life and making life important, even at adult age. Thus, the objective of the study is to
investigate the impact of education on farm productivity in Guangua Woreda, Awi Zone in Amhara
Region. To achieve this objective, the researchers collected primary data by using household survey
from the total of 200 samples 142 educated and 58 non educated farm households were selected by
using quasi experimental design. To analyze the data, the researchers employed descriptive statistics
and inferential statics. To deal with the potential bias due to the existence of observed and unobserved
characteristics, the researcher employed Propensity Score Matching (PSM). The propensity score
matching model result reveled that education have positive impact on farmers maize productivity. It
also verifies the positive impact of non-formal education on maize productivity. In conclusion, both
general education and the non-formal education have a positive impact on farm productivity in the
study area. This result provides a valuable policy insight in which improving access to diversify and
quality farmer’s awareness necessary for the rising maize production in the study area by providing
both formal and non-formal education.
Keywords: Education, Maize Productivity, impact analysis and Propensity Score Matching
VI
Chapter one
Introduction
1. Background of the study
In many parts less developing countries, agricultural growth is important for poverty reduction since
most of the peoples drive their livelihood from agricultural production. Thus, the means of making
better agricultural production widely acknowledged as the main strategy for poverty escaping poverty
trap (Otsuka and Larson, 2013).
Sumner,( 2012) note that sub Saharan regions accounts for approximately 26 percent of 1.2 billon
people in extreme poverty who live on less than $ 1.25 per day and 83 percent of the population who
are extremely poor in SSA survive in rural areas. Moreover, the sever problem rising in this is
productivity is not significantly increased over the decades and its output has not kept pace with
population growth (Teklewold, H., et,al, 2013) . On the face of it, improving the agricultural
technology as a means of increasing farm productivity seems a crucial strategy.
Improvement of a human competence for agricultural productivity is a pre-requisite for social and
economic development for rural areas. This is because agriculture forms the bedrock of economic
activities in the rural area. Evidently, development, food security and poverty mitigation will not be
truly achieved without rapid agricultural growth. Assisting the rural poor to enhance their livelihoods
and food security in a sustainable manner is therefore a great challenge. Broadly put, increases in
agricultural productivity are central to growth, income distribution, improved food security and
alleviation of poverty in rural Africa (FAO, 2002).
Education has been recognized to be a leading device for shaping people’s life and making life
important, even at adult age. It stands to reason that there exist a positive correlation between
education and human continued existence (Ani, 2007). Therefore, education becomes an appropriate
way for agricultural development process and productivity of farmers. The farmer’s ability to deal
with the disequilibria induced by technological differences over time improves with education (Luh,
2009).
Investments in education have become a main focus of economic development policy (Hanushek and
Woessmann, 2012); given that it can be considered an investment in human capital. It is believed that
investments in human capital, like investments in physical capital produce a flow of future benefits.
Hanushek,et,al., (2007) point out the three mechanisms through which education may affect economic
1
growth. First, education can increase the human capital (quality of labor) of the labor force, increasing
labor productivity and thus transitional growth toward a higher equilibrium level of output (augmented
neoclassical growth theories, (mankiew,et,al., 1992)). Second, education can increase the innovative
capacity of the economy, which encourage economic growth (endogenous growth model,) Lucas
(1988), (Romar, P, 1990), (Aghion, P and Peter Hiwitt, 1998)). Third, education can make possible the
diffusion and transmission of knowledge needed to understand and process new information, which
again promotes economic growth, (Nelson,R and Phelps, E, 1966) and (Benhabib,J and Spiegal, M,
1994).
Increased agricultural productivity depends primarily on the education of the rural farmers to
understand and accept the complex scientific changes which are difficult for the uneducated rural
farmer to understand. Hence we cannot increase the productivity of the rural farmer except through the
provision of adult education (Onwubuya, E. , 2005).
Education may enhance farm productivity directly by improving the quality of labour, by increasing
the ability to adjust to disequilibria through its effect upon the propensity to successfully adopt
innovations. Education is thought to be most important to farm production in a rapidly changing
technological or economic environment (shultz,W , 1964,1975).
As educational level increases, the output increase with secondary education having highest yields in
agricultural productivity. Extension service has also greater impact on farmer productivity even the
coverage is low. Therefore education is important for improvement of productivity such that formal
education opens the farmers mind to knowledge, non-formal education gives the farmer hands on
training and better methods of farming, and changing the innovation, ideas and permits the farmers to
share experience (Oduro,et,al., 2014).
Asfaw & Admassie (2004) study notes those Ethiopian farmers have faced frequently varying input
and output price under the new government. In addition, erratic weather, pests and crop disease all
contribute to an environment in which farmers must adapt frequently in order to survive. As a result,
there may be an efficiency advantage for farmers who are better prepared to predict and cope with
disequilibria. Thus, even in the absence of innovation, farm productivity may be enhanced by
investments in education. Since farming methods in Ethiopia are largely traditional, there appears to
be little economic justification for Ethiopian farm households to invest in education. However, new,
higher yield crop varieties are available in some areas, and some farmers in many areas have adopted
2
certain modern inputs, primarily chemical fertilizers. As technological innovations spread more widely
within the country, the importance of formal schooling to farm production ought to become more
apparent.
The various interrelationships between education (schooling), and farms productivity in Guangua
woreda is not well known because of there is no empirical studies that have been conducted in this
direction. This trend can be attributed to the qualitative nature of most o f the human capital variables
that affect agricultural farm productivity. Thus, this paper is to identify the possible benefits of
schooling for households engaged in agricultural production and to quantify the effects of education
on the rural maize farmers in Guangua Woreda, Awi Zone.
There are numerous studies conducted relating to education and productivity in the agricultural sector
which have shown that there is a relationship between education and agricultural productivity (oduro,
2014)
The type of relationship between education and farm productivity is a matter of mixed evidence and it
may be positive or negative, significant or otherwise. An improvement in farm human capital through
farmer education is important for enhancing farm productivity. Farmers who have acquired high
education are likely to adopt new technologies faster than with low educational level, use inputs that
makes them more productive (lele, 1990; Oduro,O, 2015). Note that as educational level increase,
output increase with secondary school education having the highest return on agricultural productivity.
Pudasaini (1983) also note that when the education level incerase , the rate of productivity decilines
hence there is diminishing marginal productivity with regardes to education. Where as other finding
state that when the educational level of the farmers increases , the tendency of people is to leave the
3
agriculture. In other words, the hig formal education has negetive effect on the agricultural
productivity (Murhi, 2017).
In 1992, the World Bank conduct a survey to measure the relationship between farmer’s education and
their agricultural efficiency in low income countries and found out that farmers with basic education
were 8.7% more productive than farmers with no education (Gasperini, 2000). Even if the agricultural
sector is faced with various challenges, there may be efficiency advantage for farmers who are better
prepared to cope with uncertainties due to education (Asfaw, A., & Admassie, A., 2004). It indicates
that farmer education has important impacts on agricultural production.
When we come to the case of Guangua Woreda, the economy of woreda is dependent on agricultural
sector. More than 85% of the population who lives in rural areas, their livelihood was depend on
agricultural productivity. However, the performance of agriculture is very poor, the problems are
shortage of skilled human power, use of traditional farming system, fragmentation of land, adverse
weather condition (fluctuation of rainfall ), growth of the population out weights , the growth rate of
agricultural product and inadequate market access (Agricultural & Natural resource office of district,
2017). Empower in human capital is important for increasing farmers productivities and income level,
which is key to improvement of living standards. This is emphasized by the fact that such investment
is effective way to enhance the farmer’s accesses to productive resource and farm level efficiency and
increase incomes.
4
The relationship among farm productivity, and education and extension training are not well known
because of there are no empirical studies that have been conducted in this way. According to
Agricultural office of the woreda, most of farmers in the district have the lowest level of education
with majority having just up to basic education and the access to extension service is slight narrow in
the Districts. Moreover, in Guangua woreda there was no research done on the role of formal and non-
formal education on agricultural productivity of small-scale rural farmers. And also, there is little
evidence in the area to suggest that the sector’s low education level is what affects its contribution to
GDP. Therefore, the studies aim that to identify the impacts of farm educations and contact to
extension service of farmers on agricultural productivity of small-scale rural maize farmers in
Guangua woreda, Awi zone.
Research questions
This study tries to find the answers of the following research questions.
What are the factors affecting farm productivity (output per hector) in Maize Production in the
study area?
What is the impact of farmer’s education on small-scale rural Maize Farmers’ productivity in
study area?
What are the possible benefits of formal and non- formal education for farm productivity in the
study area?
5
1.4. Significance of the study
This paper is very important in examining the impact of education on agricultural productivity and
serve as baseline for further study who investigate the related issues in the area. The result of the
study is useful for identifying the problems that hinder agricultural productivity of farmers, and
propose the problem to the concerned government bodies to search solution for the problem. It adds to
the knowledge and understanding of the farmers by providing information in relation to the
productivity.
The study also intended to help farmers, the government, and the ministry of agriculture, NGOs,
researchers, agricultural extension officers and adult education facilitators to understand the
underlying factors that influence a maize farmer’s productivity. The study helped to identify farmers’
most preferred methods so as to improve their productivity and, hence, their success and eventual
improvement of agricultural production through farm education. It was also hoped farmer associations
may also benefit from the findings of this study because the findings can be incorporated into teaching
methods to enrich the content and make agricultural education programmers meaningful to the needs
of the maize farmers, and as a result improve farmer participation.
6
1.6. Organization of the paper
This paper consists of five chapters. The first chapters introduce the benefit of schooling in farm
productivity. Chapter two surveys the literature on return to education in agriculture. Chapter three
covers the accessibility and suitability of data and methodology. The Result of study is presented in
chapter four. Chapter five concludes the paper with the summery of finding and policy implication for
possible solution to problem.
7
Chapter Two
Related reviewed literature
2. Introduction
The literature was reviewed in the area of general aspects of farm productivity over world and
Ethiopia focuses on the estimation of private and social return to education, and impact of human
capital. The core issues discussed include the importance of education to economic development and
poverty reduction, and education as the source of technical change, especially increasing the
agricultural productivity. A study also on the determinants of farm productivity is reviewed. The last
part is on the competing methodologies used in estimation of education on the farm productivity at
household level data.
Types of Education
a) Informal Education: Is the life long process by which every person acquires knowledge, skills,
attitudes and insights from daily experiences and exposure to the environment at home, at work, at
play etc.
8
population, including adults and children. E.g.: adult education, vocational education, functional
literacy, continuing education, extension education etc.
Formal Education
Extension Education
9
Education includes both informal and formal education. Here farmer educations mean farmers that
have taken either formal schooling or training and extension services. Extension service and training
are parts of no-formal education while school attainment is a type of formal education. Therefore for
this study, the researcher only focused on the impacts of education in general as well as formal and
non-formal education on farmers maize productivity. The informal education of farmers is left in the
analysis because as formal definition for it stated, it is the life time process of acquiring knowledge.
In his study conducted in Nepal, India (okpachu, 2014), discover that the allocative effect of education
on productivity is more important than worker effect indicating that key way that education influences
agricultural productivity is by improving the ability of farmers to take decision concerning the
selection of input and combination of input for better output. He declares that there are three main
ways that education enhances agricultural productivity: Improvement in farmer’s skills, enhancement
of farmers’ ability to obtain, understand and utilize new input, and improvement in general managerial
ability.
The effect of education on agricultural productivity can also be described as cognitive and non-
cognitive as point out by (okpachu, 2014). A cognitive effect of education comprises basic literacy and
numeracy that farmers achieve from education. Literacy enables farmers to read and understand
information on inputs such as chemical fertilizers and pesticides among others. Numeracy allows for
calculation of the right quantity of inputs to be combined to get the desired output.
10
In a research conducted on 141 villages consisting of rice farmers within Bangladesh, it was found out
that schooling has positive impacts on agriculture due to the skills of literacy and numeracy that give
the farmers better understanding into agricultural issues (Asadullah, M & Rahman, S, 2005). With
regards to non- cognitive effects, there is a change in the attitude of farmers who attend school and this
is as a result of discipline of formal schooling in terms of punctuality, teamwork, correctness, adhering
to schedules and so on. on the other hand, non- cognitive effect on agriculture has not been widely
studied and the inference of its effect on agricultural productivity are few as it is assumed that change
in farmer’s behavior as a result of education make them more susceptible to new ideas and modern
practices. Education influences agricultural productivity either directly as indicated above or
indirectly. Indirectly, with the skills derived from education, farmers are able to engage in activities in
the non- farm sector which serves as alternative source of income for agricultural activities (Appleton,
S., & Balihuta, A. , 2013).
The better educated farmer is quicker to observe profitable new process and product since the expected
payoff from innovation is likely to be gerater and the risk likely to be smaller (Nelson,R& phelps,E,
1966). Lele ( 1990) has observed that an improvement in farm human capital through farmer
education is essential for increasing agricultural productivity. Farmers who have acquired high
education are likely to implement new technologies earlier than others with low educational levels,
and use inputs that make them more productive.
The low earnings from farms are partly the result of their relatively lower human capital endowment
and partly of labor market discrimination, therefore Education is critical for economic growth and
poverty reduction and if the nation is to achieve high productivity and incomes from small and
medium scale farms and ultimately alleviate poverty, then the relationship between human capital
development and productivity in agriculture should be explored fully (World Bank, 2019).
Education is significant input in agricultural production and important input when the firm engaged in
activities that involve more complex decision making (Gallacher, 2001).
The returns to education differ with the level of education and the type of education. A regards
educational level, there are mixed evidence from literature as to whether primary or secondary
education has the most returns to agriculture but despite that it is generally agreed that returns on
tertiary education is very minimal or non – existence (Appleton, S., & Balihuta, A. , 1996; Asadullah,
M & Rahman, S, 2005; Reamers and Klasen, 2012). Lockheed., et, al., (1980), argues that primary
schooling is more criucial then secondary schooling for gricultural productivity because it gives farmer
11
basic numercy and literacy.It was relized in their resreachthat an additional year of primary scooling
incearse agricultural productivity by 7.4% which has supported by Appleton, S., & Balihuta, A. ,
( 1996) who gatherd that four years of primary schooling rasied productivity by 7% while completing
primary schooling increase crop production by 13%. Pudasaini (1983) also stated that as education
level incearse the the rate of productivity declines hence there is diminishing marginal productivity
with regards to education. However ,these statements have been opposed by recent studies conducted
by Reimers & Klasen (2012) on the sample of 95 developing, who descovered that returns to
secondary education exeeds that of exceed that of primary education because it is not only the ablity
to read and write that gives higer agricultural productivity but ability to do critical thinking in addition
to application of knowldage gained. Secondary education can be side to enhance the allocative effect
of education on agricultural productivity in addition to indirectly contiributing to productivity by
providing a means to obtain non farm income that can be used in the acquisition of inputs (REIMERS,
2015).
Education is highly correlated with productivity . Specifically, workers with tertiary education are
more productive than those with secondary school education; workers with secondary school
education are more productive than those with primary school education; and workers with primary
school education are more productive than those with no formal education (Jones, 2001).
The role of education in farm production is improve the ability to learn tecnologies and to provide the
productive capacity. To accumliate expertise in techenology is determined by the schooling of the
agent that runs it (Mateos, 2017).
12
A number of studies results that extension has contributed to increased productivity and farm income
(Yeyoung, 2017) surveyed the rural household of two districts in Nepal related to three major crops;
early Paddy, late paddy and wheat. They showed that the impact on wheat increased by 4% in 10% in
extension contact. Owens et al.( 2003) also measured the impact of extension on the value of crop
production per hectare with the number of extension contact in Zimbabwe and found that the value of
crop production increases approximately by 15%, significantly. Evenson et al. (1998) used the data set
from 1982 for estimation and its information was on crop production, extension workers, schooling
year of farmers, and farm inputs. The results indicated that extension service had a significant impact
on four major crops including cotton, manioc, maize and potatoes in Kenya. However, its impact was
not significant on minor crops such as sugar, peanuts, and tomatoes. Effects of schooling were
positive but insignificant. Study by Patrick and Kehrberg (1973) and Huffman (1976) also presented
that extension had a positive impact on farm productivity generally.
Formal schooling does not necessarily increase farmer productivity but rather non formal schooling.
The illiterate farmer is able to learn new ideas and modern technology from neighboring educated
farmers and from the mass media like radio and television hence emphasis should be placed on non-
formal education like extension rather than formal schooling. Non – formal education which has
considered in terms of understanding, experience and extension service visits lead rather to significant
increase in productivity than the year of formal schooling or educational level of a farmer. Non –
formal schooling increase agricultural productivity through the mutual learning among farmers and
extension service (Feder, 1987).
Extension service is one of the critical components of rural development, and has been offered to
contribute the reduction of hungry and poverty by increasing the acceptance of new technologies, and
capacity of individual farmer. The agricultural technical information distributes by extension enables
the farmers to increase capability to adopt the new technologies and inputs. Household’s head with
access to extension has high gross farm revenue and profit, and also agricultural extension has positive
and significant impact in farm production (Yeyoung, 2017).
13
Solow (1956), argue that changes in national income are determined by changes in country’s stock of
physical and human capital. The new economic growth theories which are discover by Romer and
Lucas in late 1980 and early 1990 confirm the human development that deriving force of all economic
growth is people. In that theory increasing productivity in not an exogenous factor but in endogenous,
those related to the behavior of people responsible for accumulation of productive and knowledge. The
human capital model shows how education allows the whole production process to benefit from
positive externalities. Educated people use capital more efficiently, so it turns into more productive.
They are more likely to innovate, thus, to develop a new and better form of production. Moreover,
they spread the benefit to their co- workers. Who learn from them and also become more productive.
Thus, raising the level of education can rise in the efficiencies of all factor of production (Panin,
2013).
Education is broadly expend as the act of acquiring knowledge, skills, values, attitudes and best
practices (Asenso-Okyere,et,al, 2000). Education is also the source of technical knowhow and
improvement on technical knowledge and, enhance of labor efficiency (Diwan, 1971). Economic
benefit of schooling includes the potential to obtain employment or to generate income through self-
employment, using skills learned in school (REIMERS, 2015) . Education can be divided into two
border categories namely formal and informal education. Formal education has been recognized as the
most effective way to develop the human potential. It represents that all forms of education that
requires people to acquire skills through planned system or institution recognized by minister of
education. So, that formal education is divided as basic (primary and junior secondary), secondary,
and tertiary education. Whereas, informal education largely deal with the education of adults or
people not through the means that are rigid and do not follow formal class room education end in the
award of certificate or degrees. To a large degree, informal means of education are aimed at making
people either functionally literate or enable them acquire some skill or vocation. There are different
informal education such as Adult education (non-formal education), artisanal training (apprenticeship),
and extension education (Asenso-Okyere,et,al, 2000).
Weir (1999) point out that formal schooling not important only after new technologies have been
adopted but education may also help farmers to decide early adopter of innovation and the extent to
which new innovation will be used. There are at least three reasons for this event. First, those with
schooling tend to be more prosperous and less in danger of starvation even if a potential innovation is
14
unsuccessful. Second, educated farmers may be more likely to be contact by agricultural extension
workers looking for model farmers to test innovations. Finally, literate farmers are better ability to
acquire information about possible innovation and make rational progress of the risks involved in
trying new inputs, crops or methods.
Education, particularly primary and lower secondary education contributes to poverty reduction by
increasing the productivity of the poor labor (Lockheed., et, al., 1980; Moock, 1994; Philips, 1994 ;
Villaume, 1977; world bank ,1995). As stated by Singh, Squire and Strauss (1986) ,education should
result in an economies growing demand for flexible workers who can willingly to acquire new skills
to support the sustained expansion of knowledge in the nation. Also higher education contributes to
self- sustaining growth through the impact of graduates on the spread of knowledge (Becker, 1964).
More educated workers can and are known to deal more effectively with rapidly changing
environments (Schultz, 1971, 1975; Mincer, 1989; World Bank 1991). Moreover, schooling may
speed the modification in use of new technologies (Huffman, 1974) . Most empirical studies
Lockheed, Jamison and Lau, 1980; Moock, 1981; Philips, 1994; Weir, 1999) on the impact of farmer’s
education on farm productivity have recognized that primary education is very important in increasing
productivity.
Education has also been identified as a driver of improved demographic and health outcomes,
contributing to decreases in infant mortality and fertility over the second half of the 20th and early 21st
centuries (Gakidou, 2010) , and (Barro, 2015).
15
a 10% increase in extension contact was associated with a 0.2% increase in yield of maize, other input
remain constant.
Eisemon, Schwille and Prouty(1990) conducted a survey , which has examined the impact of primary
education on cognative skills of farmers in Kenya. They found that farmers who had been to school
were able to construct casual models of event in nutural world and to demonistrate how humans could
control these events in the natural world.they were also able to actively observe , dignose and correct
commen agricultural problem better than farmers with few year of schooling.
Using data covering 300 farmers of five villages in Irepodun local government Area of Kwara state,
Awolola (1998) related three related socio-economic factors with the use of agrochemicals such
herbicides, pesticides, insecticides, and fertilizers. On the basis of simple cross tabulation, he found
that the educational status, farm size, and income were positively related with farmer’s use of
agrochemicals. Furthermore, the study reveals that adoption of agrochemicals is related to the type of
education a farmer has. The farmers who have secondary and post-secondary education used more
agrochemicals than illiterate and uneducated farmers.
In the relationship between education and technological innovation, Cotlear (1986) stressed the role of
non-cognitive aspects of education such as openness to new ideas which allowed farmers to employ
new technologies. Using survey data from Peru, he estimated the impact of education on farm output
using production function. He reports that education affect production by developing analytical modes
of solving problems by allowing farmers to think more abstractly and thus realize the relationship
between technology and production.
In their study of the relationship between farmer education and farm efficiency in Nepal the role of
schooling, extension services and cognitive skills, Jamison and Moock (1984) found that farmers who
could read, write, and understand numbers could allocate inputs more efficiently and thus increased
productivity. In general, the study found that direct returns to education were stronger in developing
countries than in developed countries. Jamison and Moock (1984) posited that this could simply reflect
shortages in minimal skills in developing countries.
Lau, Jamison and Louat (1991) studies on the impact of primary education on the economic growth in
East Asian and Latin Americans found that primary education is significantly affected the economic
growth in twenty –two east Asian and Latin American countries. They also found that secondary
education affects economic growth in fifty – four East Asian, Latin American, African and Middle
Eastern countries.
16
Okpachu, Oche and Obijesi (2014) study on the impact of education on agricultural productivity of
small scale female farmrs in Yobe state of Nigeria. They asserte that there was sigificance difference
in out put of female who have particpate in adult education schem and non – particpant iin adult
education schem. They conclued that for rural women to enhance agricultural productivity and other
economic activites agricutural education schem is important. Therefore, femal farmers encouraged to
particpate on adult education and also Government agricultural and rural development policies should
be in tandem with the new paradigm-shift on gender.
Lockeed, Jamison and Lau (1980) reviewed and summarized the findings of 18 studies containing
thirty- seven data sets from thirteen developing countries (primarily in Asia) and found that most
reported significant positive impacts of education upon output, even if the results were mixed. They
concluded that four years of primary education increased the productivity of farmers by 8.7 percent
overall and 9.5 percent in countries go through modernization. However, for the group of studies
concerned with the impacts of education in traditional agriculture, the increase in output due to four
years of schooling was only 1.3 percent on average. Education increased the ability of farmers to
allocate resources efficiently; enable them to improve their choice of inputs; and enabled farmers to
estimate more accurately the impact of those inputs on their overall productivity. They concluded that
as the education level of an individual increased, so did the individual is able to perform more
complicated tasks or to adapt to changing condition or tasks.
Phillips (1994) reviewed additional 12 studies using 22 data sets (with more recent data and greater
representation of Latin America), and was able to confirm the general trends noted above. He
considered the average increase in output due to an additional four years of schooling was 10.5
percent, with the relevant figures for traditional versus modern farming system at 7.6and 11.4 percent,
respectively. However, his survey was significantly geographical divers’ to show that the impact of
schooling was strongly in Asia than in Latin America, irrespective of the degree of modernization.
This may have implication for the assumed applicability of Asian findings to Africa, though too few
studies using Africa data was included to draw strong conclusion.
A study approved out by Colclough (1980) to establish the relationship between primary schooling
and economic development asserted that the benefits of primary schooling arise from cognitive and
non-cognitive behavioral changes encouraged by the schooling experience even in system of very low
quality. It also declares that evidence from fertility and farm productivity studies suggested that
individual behavioral changes that resulted from schooling were stronger when literacy is widespread
17
than when it concentrated. He assumes that an interactive effect existed between individual and
community attitudes and values, which significantly strengthen the economic and social case for
universalizing access to primary schooling.
A study by Oladeebo and Masuku (2013) to estimate the effect of farmer education and managerial
ability on food crop production found that farmer’s education has positive impact on the farmer’s
technical efficiency and also education play important role in increasing technical efficiency of food
crop production because farmers are capable of adoption of innovation which could enhancing the
food crop production. They asserted that education is significantly affecting technically inefficiency
of food crop production especially in the area of training by the state agricultural extension service.
Abbasian and Hussain ( 2011) studies on the impact of educated farmer on agricultural product founds
that educated farmers reveals the highst cofficient and siginificant at 5%.
Weir (1999) challenged the hypothesis viewed by Croppenstedt and Demeke (2015) that demand for
schooling in rural Ethiopia was controlled by the traditional nature of farm technology and lack of
visible benefit of schooling in terms of farm productivity. He examined the effect of schooling upon
farmer productivity and efficiency by employing data drawn from Ethiopia rural household survey
(ERHS) conducted in 1994. He reported that positive and significant effect of land, labor, capital and
fertilizer when a standard Cobb-Douglas production function is estimated without education variable.
When education attainment variable were bring in the function, the result showed that there were
positive and significant return to formal schooling in agriculture production in rural Ethiopia. In the
case of household heads that farm, the returns were greatest for those who had attained some upper
primary schooling especially grades four to six. He argued that given that the traditional nature of farm
technology in rural Ethiopia, it wasn’t surprising that secondary schooling added nothing to the
productivity of household heads who were farmers. He explained that those who spent more years in
school had spent less time in the fields to learn traditional farm methods from their fathers and may
18
have developed negative attitude toward farm labor. He found that an additional year of schooling for
the household head decreased output by one percent (insignificantly), when site – fixed effects
included in the model specification. Overall, the effect of one year of schooling for a farmer was to
increase output between one percent and two percent, and for non - famers between 3.0 and 4.1
percent. His findings contrasted well with Lockheed, Jamison and Lau (1980) and Philips (1994), who
reported small or negative effects of an additional year of schooling. The average farm specific
efficiency estimated from a stochastic frontier production function was 54 percent with an assumed
distribution of one side error term and concludes that formal education had no influence upon
placement of stochastic production (REIMERS, 2015).
Mirotchie (1994) examine technical efficiency in cereal crop production in Ethiopia using aggregate
data for the period 1980-86. The data on education are weak. Although the conclusion must be drawn
with carefulness, he reports that primary schooling be liable to increase productivity, while secondary
has no effect.
Croppenstedt and Muller (1998) examine the effect of various forms human capital upon agricultural
productivity using data from the first round of Ethiopian Rural Household Survey (ERHS), but do not
find a relationship between their measure of education and agricultural output.
Croppenstedt, Demeke and Meschi (1998), using data from a 1994 USAID fertilizer marketing survey,
found that literate farmers are more probable adopt use of fertilizer then those who are illiterate,
though the quantity of fertilizer demanded does not depend up on literacy.
Croppenstedt and Demeke (1997) use data from the ERHS, selecting eight sites dominated by oxen
plough cultivation in estimating efficiency by using mixed fixed random coefficients regression
model. they include four alternative education variable: a dummy indicating that household head has
the adult literacy programmer certificate; a dummy indicating that another household member can read
and write a letter (self- report); a dummy indicating that the household that another household has
completed primary school; and an estimator of the number of years of schooling attained by the
household head, calculated based on the highest education level. They note that the measure of
education used was ownership of an adult literacy programmed certificate. This is not an ideal proxy
for education, since literacy skills may have completely worsened by the time of the survey and
19
because no account is taken of numeracy which may be equally important. They found that literacy
has positive effect upon productivity, and that education is weekly correlated with farm efficiency.
Dercon and Krishnan (1998), using panel data on six sites covered by both the ERHS and 1989 IFPRI
survey, found that the poverty between 1989 and 1994 was greater for household heads who had
completed primary schooling than for those who had less (or no) education. Poverty reduction is
defined by headcount measure in terms of greater consumption per adult equivalent across two
periods. The decomposition results suggest that the educated were able to take better advantage of
opportunities to increase consumption over this period. In general, this body research is evocative of
the possible benefits of schooling in agriculture areas in terms of increasing efficiency and the
adoption of innovation as well as in reducing poverty. However, there is at present no realistic direct
evidence to quantify the magnitudes of the effect of education upon crop yields in rural Ethiopia.
Knight,et,al. ( 2003) studies on the Role of Education in Facilitating Risk-taking and Innovation in
Agriculture , found that schooling of the head of houshold decrease rik aversion and ecourage the
adoption of agricultural innovations in rural ethiopia. In addition the using years of schooling as such,
they alternatively include dummy variable which indicate three threshold levels: whether or not
schooling of the household head exceeds zero years, is up to three years, and is more than four years.
All these variables are found to have significant and positive effect on reducing risk aversion
increasing the probability of adoption of new crops and inputs.
Sex
Education
Access to credit
Maize Yields per
hectare
Fertilizer used
20
Nature of land
Number of oxen
Extension contact
Chaudhri (1979) described this obvious paradox,assert that the reason for the difference is that
different levels of aggregation , the more effects are arrested , and therfore, the stonger the estimated
relationship between education and productivity in farming.
21
Chaudhri (1979) discussed four possible impact of schooling : the worker, the allocate impact , the
innovative effect and external effect. Based on his emprical work , he conculed that an examination of
data at housholed level will reveal only the direct (worker) effect of schooling on the output. As the
level of aggregation is incearsed up to the state level , more if allocative effect , innovative and
external effect will be chosen, and eventually a level of aggergation will be reached at which all
external effects are internalized.
Welch (1970) built upon Chaudhri’s work , suggesting methodology to describe direct, allocative
( including innovative ) and input selection effect of schooling using disaggregated data. Estimating a
production function with physical output of one product as dependent variable and education plus
other input as explanatory variable discloses only worker effect of education. Using gross output sales
of two or more products as dependent variable reveals both worker and the allocative effect of
schooling, as the role of education in allocating inputs across different outputs can be captured.
Estimating a value added ( profit) production function makes it possible to examine the worker ,
allocative and input – selection effect of education , if education is included in the specification and
othe purchased input are excluded.
Ram and Singh (1988) provide a basic application of this methodology , examine the allocative impact
of schooling in Burkina Faso. They estimate alternative Mincer/ chiswick – style earnings (income)
functions to estimate the impact of production upon income: one with education plus other farming
inputs as explantory variables and one including only education. The coefficient on education in the
first equation captures only the worker effect of schooling , while in the second equation it captures
both the worker and allocative effects because other input are no longer held constant. The difference
between the coefficent on the schooling in the two equations provides an sign of the size of the
allocative effect. One of the potential problem with this approach to studying the allocative effect is
that it assumes causality between the amount of education attained by the farmer and the quantity of
other inputs used.
This is inappropriate if education and other inputs are simply correlated , and levels of all production
inputs are caused by a third, unobserved factor. To create casuality frome education to input chioce,
Appleton & Balihuta ( 1996) run regressions with each inputs as the dependent variable and education
and other regressors as explanatory variables in their research on Ugandan agricultural productivity.
Since they find that education dose have a strong positive effect upon use of capital and other
22
purchased inputs , they conclude that the usual Cobb- Douglas production function which includes
other inputs clearly( holding other inputs constant) minimize the importance of education in explaining
output.
They then estimate the production function without these inputs, as suggested by Welch (1970), to
capture more fully the effect of schooling.
23
quality, are included, ( (Hussain, 1995). If the environmental variables are omitted from the production
function specification, the variation in productivity between farms due to difference in soil quality or
other environmental factors between farms will be mistakenly regarded as resulting from inefficiency
under the control of the farmer.
Production frontiers should be estimated on geographically small, homogenous regions to reduce
variability in environmental factors. Moreover, if any of the factors of production are fixed in the short
term, this will lead to upward bias in measurement of technical inefficiency (Ali, 1991).
Lovell (1993) note that the Cobb- Douglas function is the most commonly used functional form to
estimate the production frontier. It has an advantage of ease of estimation and interpretation of the
coefficient, u. However, since it assumes constant elasticity of scale and unitary elasticity of
substitution, variation in elasticity of scale or substitution may be erroneously attributed to
inefficiency. Hence, functional form is relevant consideration when estimating the production frontier.
Results are also highly sensitive to the assumed distribution of u, the component of error tem attributed
to inefficiency. Commonly assumed distribution include: half-normal, truncated normal, exponential,
and gamma (Greene, 1993)
2.6 Summary
In general, we see that the impact of education on farmer’s productivity at the farm household level
has received a lot of attention with most of studies employing data from different developing
countries.
The studies reviewed point out the different competing methodologies often used in estimation
procedure. Most of the studies was use the non- frontier production function by employing the Cobb-
Douglas technique with few others using stochastic frontier approach. The stochastic frontier function
approach is not used in the estimation carried out on this study due to data limitation associated with
the manner in which answers were requested from respondents and difficulty associated with
decomposition of the error term into its components. The frontier model is used when the
measurement error has a symmetric component and one side component, which captures the impact of
inefficiency relative to the stochastic frontier. To deal with the potential bias due to the existence of
observed and unobserved characteristics, the researcher employed Propensity Score Matching (PSM).
24
Chapter Three
Methodology of the study
3.1. Description of the study area
25
Currently, the woreda is divided into 18 kebeles. Its agro-climatic conditions are sub-tropical and the
major soil is its red which made it suitable for the production of cereals and pulses. The farming
calendar of the woreda is from April to January. Maize occupied the largest cultivated area out of the
crops grown in the woreda.
26
3.5. Sample Size and Sampling Techniques
The respondent sample size of 200 maize farmers were randomly selected from Yimali and Bizrakeny
Keble in the total population of 1708 farmers live in guangua woreda. According to Catherine Dawson
(2009), the correct sample size in the study is depending on the nature of population and the purpose
of the study. Although there are no general rules, the sample size usually depends on the population to
be sampled. Regarding to sample size determination for the study among different methods, the one
that has developed by Carvalho (2005) is used. From total population of 1708 maize farmers in
selected Keble, 200 farmers were selected.
27
3. 4. Number of samples from each Keble
Table 3.2. numbers of sample selected from each kebele
Name of each Number of total populations in Covering % in No. of sample
Keble the Keble (maize farmers) sample household taken
Yimali 731 42.80% 86
Bizrakeny 977 57.20% 114
Total 1553 100% 200
28
Thus, PSM searches a group of “control” farmers who are statistically “similar” in all observed
characteristics to those who participated in the training program.
PSM constructs a statistical comparison group that is based on a model of the probability of
participating in the treatment T conditional on observed characteristics X, or the propensity score is
given by:
The propensity score or conditional probability of participation may be calculated by using a probit or
a logit model in which the dependent variable is a dummy variable T equal to one if the farmer
participated in treatment and zero otherwise (Ravallion, 2008).
The propensity score is defined as a conditional probability of treatment assignment, given observed
covariates (Rosembaum & Rubin, 1983);
ei ( X ) P( Z i 1| X)
Although the results are similar to what would have been obtained by using logit model was used to
estimate participation equation in this study. However, in order to determine if matching is likely to
effectively reduce selection bias, it is essential to understand the two underlying assumptions under
which the PSM is most likely to work: Conditional Independence Assumption and Common Support
Assumption.
Conditional Independence Assumption: states that given a set of observable covariates X which are
not affected by the program intervention; potential outcomes are independent of treatment assignment.
Common Support Assumption: states that for matching to be feasible, there must be individuals in the
comparison group with the same value of covariates as the participants of interest. It requires an
overlap in the distributions of the covariates between participants and non-participant comparison
groups.
29
3.6.3 Definitions of variables and hypothesis setting
Hypothesized variables expected to influence maize productivity in the study area are explained in the
following manner:
Dependent variable:
Level of maize yields per hectare: It is a continuous variable, which represents dependent variable;
the amount of maize actually produced by household in the year 2020, which is measured in quintals
per hectare.
The Independent Variables: The following explanatory variables were hypothesized to influence the
productivity of maize farmers in the study area
Land under cultivation of maize product (Li): This variable is a continuous variable measured in
terms of a number of hectares allocated to Maize. It implies the sum of own cultivated land, rented in
land and land held through the share cropping agreement during the survey period by the household
head. Those who have large farm size can expand production by exploiting economies of scale, higher
input usage, tend to the traditional distribution method by adopting row planting method which is
applicable for increasing productivity (Endrias, 2013). Thus, it is expected to affect the household
level of maize productivity positively. This is because producers who own large land area holding can
produce more than producers who own less area and thus it is high productivity.
Adult Household member (Ni): This variable is a continuous explanatory variable and refers to the
number of active family labor in the household. Labor is among critical variable in influencing the
decision of household in farm production (Geremew, 2012). In this study, we consider that active
family members who participate on agricultural activity in household. Thus, the variable is expected
that the positively impact upon the productivity of maize farmers. This is because maize production in
the area is labor intensive, thus need high labor and in this rural area there is no market for labor or if
any deficient.
Amount of Fertilizer used (Fi): This variable is continues measured in numbers. It is the quantity of
fertilizer used in 2017 for Maize production by household head. The farmers who participate on the
purchase of chemical fertilizer are more productive (Oduro,O, 2015). Thus, Fertilizer use is normally
expected to boost production and the possibility of households to engage in output markets.
Number of Oxen owned (ox): It is continues variable measured in number. It is the amount of
livestock used for farming (used as capital). Agricultural production is directly influenced by the
30
owner ship of oxen (Beyene, 2015). Therefore, it is expected that the larger the number of oxen the
household has, the more the agricultural productivity will be. This is because as the number of oxen
increases the farmer’s ability to plough more land will also increase.
Extension service: This is dummy variable that takes a value of one if the household head has expose
to extension service and two if the household have no extension contact. Extension service brings in
farmers on training and better methods of farming (Hanushek,et,al., 2007). Farmers that have frequent
contact with extension Agents will have better access to information and could adopt better technology
that would increase their production and productivity. Thus, it is expect that extension service is
positive impact on volume of maize productivity through its encouragement of production.
Access to credit: This is a dummy variable that takes the value “1” when the household have an
access to credit and “0” have no access to credit. Credit helps farmer’s worker to improve the
productivity of their land. There is a need for money for to adopt new technologies such as yield
increasing inputs. Input deliverance should be combined with credit provision in order to reduce the
working capital constraint to adopting new inputs for farm households (Ellis, 2004). This variable is
expected to influence the maize productivity positively on the assumption that access to credit
improves the financial capacity of maize producing farmers to buy modern inputs, thereby increasing
production.
Sex of the household head: This is dummy variable that takes a value of one if the household head is
male and zero if the household is female. Both men and women take part in crop production and
management. The result expected that the proportion of male-headed households is quite higher than
that of female-headed households in participating in maize production.
Age of household head: This variable is continuous variable and defined as the number of years of
household head age. In this study, it is believe that as age increase farmers would obtain knowledge
31
and experience from side to side continues learning which helps them to actively participate on maize
production. Thus, in this study this variable is used as the proxy for farmer’s experience in farming.
Environmental factor: According to Odulaja and Kiros (1996), the environmental factors including
rainfall, soil type, humidity, temperature, erosion, and vegetation, which are location specific. In this
study, land fertility (overall) and nature of land (land sloping) are used to represent the environment
factors. The variable land fertility is measured as 1 if the overall land the household possessed is fertile
and 0 if it is of poor fertility. Farmers who have many design of land gave the overall fertility of their
land. Whereas, the nature of the land farmers owned is continues variable, and it is assumed that
household with the land slope of plain have high productivity.
Market Access: Access to markets is continuous variable to be measured by Distance to the local
market in K/m. farmers who are near to the local market can easily supply their product which
motivates them to produce more.
Informal Education: Informal education is one that is framed according to the requirement of a
particular job. This this is dummy variable for access and not access to informal education.
32
Chapter Four
Results and discussion
To achieve the understanding on the impact farmer education on the farm productivity of small-scale
farmer’s, survey was conducted from 200 small-scale rural maize farmers in Guangua woreda in 2020.
This chapter present and discuss main findings of the study from the survey. The researcher organized
the analysis in to two parts: descriptive analysis part and empirical analysis parts. To empirical
analysis the study, first employ the Cobb Douglas production function to estimate the impact of input
and household characteristics on the value of maize output per hectare. To achieve it second objective,
educational level of household head is set up as an additional factor of production to find out the return
to education in Guangua woreda, Awi zone.
4. 1. Descriptive results
This section provides the descriptive analysis on the relationship between maize production and
factors of maize production using tabulation and summary statistics from selected farmers in Guangua
Woreda.
33
Table 4.3. summary of descriptive statistics
Variable Observation Mean Std. Dev.
Maize yield 200 25.625 4.887
Extension service 200 .575 .496
Age of respondent 200 49.515 12.083
Education 200 2.565 1.068
Family labor 200 4.965 2.877
Allotted land 200 1.663 .956
Fertilizer 200 199.63 85.145
Oxen 200 3.5 1.47
Sex 200 .60 .491
Market access 200 25.746 14.183
Credit access 200 .595 .492
Informal education 200 .315 .466
Soil fertility 200 .62 .487
Source: own computation
35
education level have produced below the total average productivity of maize an average of 19.2
quintal and 23.3 quintal respectively. Household heads who had no formal education had allocated 2.9
average hectares of their land for maize production. Therefore, this description shows us the higher the
level of education, the higher the productivity of maize per hectare.
Yield 49 26.888
Age 49 44.51
Allotted land 49 1.184
grade 9 and above
Yield 51 31.931
Age 51 36.549
Allotted land 51 .667
no formal schooling
Yield 38 19.211
Age 38 65.211
Allotted land 38 2.908
Source: own computation using STATA
The household with access to credit produces more than the total average maize productivity of the
area which is 27.9 quintals of maize by allocating 1.27 average hectare of their land while households
36
with no access to credit produces below the average productivity of the area amounted 22.2 quintals of
maize per hectare allocating 2.23 hectares of their land for maize productivity.
Table 4.6. Decomposition of maize production per hectare of land by access to credit
Yield 81 22.247
Age 81 57.494
Allotted land 81 2.235
Source: own computation using STATA
Yield 76 20.967
37
Age 76 60.684
Allotted land 76 2.447
Table 4.7 stated that the farmers who had expose to extension service and not exposed to extension
service. More than 76.5 percent of the maize farmers said they has farm assistance from the extension
worker and only 23.5 percent of the respondent have no access to contact extension worker. The
average number of contacts for all household was 1.54 times per year. This revealed that the individual
based number of visits the extension agent to solve the specific problem of farmer was minimal.
Extension service provide to improving the farm productivity through informal education of farmers;
however, we have just more than 23 percent of the farmers have not access to extension service
through the input attainment than this need the intervention of government as well as call for a careful
look of policy makers.
Table 4.8. Decomposition of maize yield per hectare by access to extension service
Yield 85 21.482
Age 85 59.059
Allotted land 85 2.359
Source: own computation using STATA
38
4.1.8. Decomposition of Maize yield per hectare by informal education
As seen from the figure 4.3 below among 200 sampled household heads only 63 have access to
informal education while the remaining 137 households have no access to informal education. When
we look the impact of informal education on maize yield productivity, there is no significant
difference between households with informal education and households with any informal education.
The table shows that households with access to informal education produce 25.095 on average below
the total average by around half quintal (0.53) per hectares of land but households with no access to
informal education produce slightly higher than the population average which is 25.869 quintal per
hectare 0.24 quintal higher than the population average. Generally speaking the result shows that there
is no significant relationship between maize yield per hectare and informal education.
250
200
200
150 137
100
63
50 25.095 25.869 25.625 Numbers of households head
Mean maize production per
0 hectare
Linear (Mean maize pro-
n n ll
atio atio era duction per hectare)
uc uc ov
ed ed
al al
r m r m
fo fo
in in
to to
ess ess
c c
ac ac
no
39
4.2. Econometrics analysis
Before estimating the average treatment on the treated as a pre- requite the common support
assumption were checked by kernel density plot, which ensures that there was a sufficient overlap in
the characteristics of treated and non-treated units to find adequate match which shows a lots of
support between red and blue line . Furthermore, the pstest were checked for balancing before testing
the ATT estimation and after matching, it was not significant, so that the balancing was good for this
study in building the good control group. The average absolute bias before matching was high and
after matching it becomes lower to the recommended level and hence the overall matching
performance is good for all covariates.
The pstest result restricts that V (T)/ V(C) must be statistically insignificant i.e. p-value greater than 5
% to have a good matching covariates and mean bias for matched item must be less than 5 and
Balance plot
Raw Matched
6
4
D e n s ity
2
0
0 .5 1 0 .5 1
psmatch2: Propensity Score
illitrate llitrate
Furthermore, Mantel Haenszel test statistics (MH) sensitivity analysis for average treatment effect
were checked and there are no unobserved variable that affects treatment and the outcome variable
simultaneously and hence, matching estimators are robust(see appendix 1.2).
40
4.2.1. The Impacts of Farmer’s Education in general on Maize Productivity
The result bellow shows that for treated households, the treatment (education in general) increases
their maize productivity by 0.82 quintals of maize per hectare on average. This indicates us education
has an impact on maize productivity which is because if the farmer gets formal education they tend to
be fast to understand and adopt new methods of production provided by agricultural professionals. The
average treatment effect on the treated (ATT) was statistically significant as the t-statistic greater than
two in absolute value. First the researcher estimated the average treatment effect as depicted on the
table below.
Table 4.9. Propensity score matching result for education
Treatment-effects estimation (ATE)
Yield Coefficient St. Err. t-value p-value [95% Conf. Interval] Sig
r1vs0.educ 0.885 0.385 2.30 0.021 1.639 0.131 **
Mean dependent var. 25.547 SD dependent var. 4.853
*** p<0.01, ** p<0.05, * p<0.1
The p-value for the estimated effect of education on maize yield of farmers is significant at 5% level
of significance, we can interpret that the farmers with education are better produces than that of
farmers with no access to education.
The treatment effect on the population (ATE) above is by far different from the average treatment
effect on the treated. The Average Treatment-effects estimation (ATE) shows us the overall effect of
education on the maize productivity of farmers. Treatment-effects estimation on the treated (ATT)
shows us the separate effects of on farmer’s maize productivity specifically for the educated farmers.
42
As shown on the above table, the assumptions of common support holds true as there were no
observation that lies off support.
psmatch2: Treatment assignment psmatch2: Common Support
On Support Total
Untreated 142 142
Treated 58 58
Total 200 200
The result below shows that for treated households, the treatment which is access to non-formal
education increases their maize productivity by 1.767 quintals of maize per hectare on average.
This indicates us access to non-formal education has an impact on maize productivity which is because
if the farmer gets contact or non-formal education by government officials, then they would tends to
easily adopt new methods of production provided by these professionals. The average treatment effect
on the treated (ATT) was statistically significant as the t-statistic greater than two. First the researcher
estimated the average treatment effect (ATE) as depicted on the table below.
Table 4.12. Estimated PSM results of non-formal education
Treatment-effects estimation (ATE)
43
Treatment-effects estimation of non-formal education (ATT)
The table below shows the result of effects of non-formal education on maize productivity of farmers
with access to non-formal education. The p-value shows as there is significant effect by non-formal
education on maize productivity of farmers. The net treatment effect of getting informal education is
1.725 better or higher than farmers with no access to non-formal education.
Yield Coefficient St. t-value p-value [95% Conf. Interval] Sig
Err.
r1vs0.non- 1.725 0.298 5.78 0.000 1.140 2.310 ***
formaledu
Mean dependent var. 25.547 SD dependent var. 4.853
*** p<0.01, ** p<0.05, * p<0.1
While the table below shows the result of propensity score matching just to estimate the impact
difference of non-formal education between maize productivity of farmers with access and no access
to non-formal education.as it shows the average productivity difference between treated and non-
treated or between farmers with access to non-formal education and those farmers without non-formal
education is 0.58 quintals/hectare.
Results of psmatch2
Variable Sample Treated Controls Difference S.E. T-stat
44
Chapter five
5.1. Conclusion
Education is said to be one of the factors that affect agricultural productivity. It was unraveled that
education indeed has an effect on agricultural productivity but this effect has been minimized due to
the low literacy level, low educational level of farmers in the area as well as low level of provision of
extension services. Also, the farmers faced other factors that magnify the effects of education such as
transportation, resources availability and cost of farm equipment and input which minimized the effect
of education on agricultural productivity of farmers.
Education can be improving the quality of farmer labor by enabling them to produce more with their
available stock of production factors. Moreover, it can help farmers to choose more effective means of
production by adopting new technology and increase the efficiency of the resource allocation. Thus,
more rapid the flow of new input, the greater will be the productivity disparity associated with
additional education.
In order to understand the effect of farmer education on the farm productivity, this study estimated and
quantifies the contribution of formal schooling attended, exposure to extension service and other
explanatory on the maize productivity of farmers. Cobb- Douglas production function has specified
with education variable as input of production.
The maize farmer’s education as measured by the formal years of schooling completed by the
household head had significant and positive effect on the farm productivity. The farmers whose
schooling is 1 to 4 education has lower productive then 5 to 8 schooling , similarly, 5 to 8 schooling
farmers were low productive than 9 and above schooling farmers.
The extension service is one of the non- formal schooling, but it enhances the farmer’s ability to adopt
the new technology with regarding to farm production. Hence non-formal education was found to
positive and significant level at 5% level of significances. The farmers who have an access to non-
formal education are more productive than farmers with no access to credit service.
45
5.2. Policy Recommendations
Based up on the finding of the study, the following recommendations have been suggested to help
improve upon farmer education and maize productivity in Guangua woreda.
First, there should be inclusion of education at the core of rural development and food security agenda
by focusing on expanding access to education and improving school attendance in the districts as well
as finding the appropriate ways to incorporate rural development and food security in the basic
education curriculum.
Secondly, build up the non-formal education like access to extension service and farmer training (FT)
in the district since the non-formal education add more to agricultural productivity, government
investment in agriculture should be guide towards the provision of better extension service. The
minister of agriculture should transfer more extension agents to the districts and provide them with
motor bicycle to facilitate easy movement among the Keble’s. Various farmers also confused to
utilize the extension service offered but have problems with pests and diseases management on their
framers. Extension agents should be trained to practice evidence based teaching whereby things taught
will be practiced on sample farmers with comminutes members observing progress when the other
farmers see the result, and they will change the awareness and apply the lesson trained. And also the
individual in the communities who are appreciated and agreed by the communities members can be
trained and used as mentor to farmers accordingly they can be link the farmers and extension agents.
Thirdly, sampled farmers complained about the go up in the price of fertilizer and the low access to
credit in the district. In this regard, framers require the immediate intervention and support. Thus,
providing the access to credit and subsidize the fertilizer to unable farmers’ is one of the possible
solutions. This is because the fertilizer and credit are the key factor in influencing the farmer’s
decision to participate on maize production.
Fourthly, focus on the way by which education level of farmers can be improved. The literacy level of
farmers in the district is low even with 25.5% of farmers were obtain having the basic education which
necessities the improvement of the educational level of farmers in the district to gather the benefit that
education has on agricultural productivity. The way through which this can be done is through adult
literacy classes. Adult literacy classes is the great way that can be exploited because the enhanced
literacy gives farmers’ confidence in decision making and enable them read instruction, and gives
46
them a better understanding of issues facing agriculture. The non-formal section of the education
director can be train basic school teachers and other literacy in the district to grasp the classes and tech
the illiterates so that more farmers will learn basic literacy and numeracy to boost the agricultural
productivity.
Thus to increase their productivity the farmers in district should have required skills and knowledge in
modern farming method and be able to know simple instruction on the use of modern farm inputs.
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Appendixes
Appendix-1(test results and estimations)
1.1 Propensity score matching result education
Marginal effects after probit
y = Pr(group) (predict)
= .51068256
56
Q_mh- : Mantel-Haenszel statistic (assumption: underestimation of treatment effect)
Mean t-test
Variable Treated Control %bias t p>t V(T)/V(C)
education 0.385 0.480 -21.400 -0.970 0.332 .
oxen 1.289 1.383 -17.200 -1.020 0.311 0.870
age 2.750 2.623 5.1 1.200 0.234 0.860
sex 0.692 0.729 -9.200 -0.410 0.681 .
credit .75 0.731 4.4 0.220 0.829 .
Family labor 2.481 2.458 3.5 0.230 0.822 1.160
Allotted land 0.416 0.474 -11.300 -0.570 0.569 0.580
fertilizer 5.143 5.180 -7.800 -0.340 0.736 13.88*
Non-formal 0.308 0.233 16.000 0.860 0.393 .
education
Market access 23.875 24.381 -17.200 -0.910 0.367 0.770
Age square 2426.800 2370.300 6 0.430 0.671 0.840
* If variance ratio outside [0.57; 1.74]
1.15 . . . .
57
Gamma : odds of differential assignment due to unobserved factors
Q_mh+ : Mantel-Haenszel statistic (assumption: overestimation of treatment effect)
Q_mh- : Mantel-Haenszel statistic (assumption: underestimation of treatment effect)
p_mh+ : significance level (assumption: overestimation of treatment effect)
p_mh- : significance level (assumption: underestimation of treatment effect)
58
oxen -0.201 0.186 -1.080 0.280 -0.566 0.164
gage -0.083 0.096 -0.870 0.385 -0.272 0.105
sex -0.032 0.265 -0.120 0.903 -0.552 0.487
credit 0.276 0.250 1.100 0.269 -0.214 0.766
age -2.854 2.195 -1.300 0.194 -7.156 1.449
Family labor -0.307 0.229 -1.340 0.180 -0.755 0.141
Allotted land -0.336 0.246 -1.360 0.172 -0.819 0.147
fertilizer -1.305 0.565 -2.310 0.021 -2.412 -0.199
Market access 0.006 0.036 0.170 0.868 -0.064 0.076
Age square 0.000 0.000 0.230 0.818 -0.001 0.001
_cons 18.402 8.603 2.140 0.032 1.540 35.264
1 . . . .
1.05 -.078092 . .531123 .
1.1 -.078092 -.078092 .531123 .531123
1.15 -.078092 -.078092 .531123 .531123
1.2 -.078092 -.078092 .531123 .531123
1.25 -.078092 . .531123 .
1.3 -.078092 -.078092 .531123 .531123
1.35 . -.078092 . .531123
1.4 -.078092 -.078092 .531123 .531123
1.45 -.078092 -.078092 .531123 .531123
1.5 -.078092 . .531123 .
Gamma : odds of differential assignment due to unobserved factors
Q_mh+ : Mantel-Haenszel statistic (assumption: overestimation of treatment effect)
Q_mh- : Mantel-Haenszel statistic (assumption: underestimation of treatment effect)
p_mh+ : significance level (assumption: overestimation of treatment effect)
p_mh- : significance level (assumption: underestimation of treatment effect)
Mean t-test
Variable Treated Control %bias T p>t V(T)/ V(C)
education 0.328 0.262 14.400 0.800 0.428 .
oxen 1.443 1.384 10.600 0.610 0.542 1.040
59
sex 0.525 0.617 -18.600 -1.030 0.305 .
credit 0.607 0.604 .5 0.030 0.976 .
age 3.886 3.869 5 0.410 0.681 1.050
family labor 2.525 2.560 -3.600 -0.210 0.837 1.090
Allotted land 0.308 0.209 15.200 0.860 0.391 1.140
fertilizer 5.117 5.175 -8.900 -0.720 0.473 1.210
Market access 24.689 24.825 -4.600 -0.260 0.799 1.450
Age square 2629.700 2543.700 6.9 0.390 0.700 0.940
60
Appendix -2(questionnaire)
Bahir Dar University
DEPARTMENT OF ECONOMICS
Introduction
My name is Mulugeta Abebe; I am a master’s student at Bahir Dar University pursuing MSc. in
Development Economics. I am carrying an academic research entitled the impact of farm education on
farm productivity of small-scale rural maize farmers in Guangua woreda. Your responses are very
much important for the success of the study and you are expected to be confidential, you are kindly
requested to fill the questionnaire.
You do not need to write your name and address, only write the necessary information in the space
provided and put a circle. Thank you for your cooperation!!
Dear respondents, you are requested to give your accurate answer by circling the alternative in the
front of your choice from one of the given demographic or personal information.
1. Age: _____________
2. Sex: A. male B. female
3. Marital status: A. Married B. Unmarried C. divorced D. widowed
4. Family size:__________________
5. How many numbers of adult household members who work on the farm in household?
-----------------
61
7. Your monthly income? A. less than 1000 B. 1000 Up to 1500-birr C. Above 1500 birr
12. if your answer for question number 11 is “No” How you did acquire the land you have cultivated
maize crop?
14. if your answer for Q13 is “Yes” how many kilograms input did you use? __________________kg
15. If you did not use fertilizer inputs, what are the possible reasons? (Multiple answers are possible)
A. High selling price B. Late arrival of fertilizer to the purchasing points C. Scarcity of fertilizer
supply D. No credit arrangement E. I used animal dung and compost F. Other,
specify___________________________________
16. Did you use improved seeds in your own or rented land in the recent harvest year? A) Yes B).
No
17. If your answer for question number 16 is “yes”, in how many hectares of land did you use
improved seeds? _______________.
19. If your answer to Q18 is “Yes” how many numbers of oxen do you have?.......................
20. If your answer to Q18 is “No” how do you produce the maize product?
62
21. How much hectares of land size do you have?...............................
23. How much is the quantity of product do you get on your land area under maize production per
hectare in last year?..........................
24. How many quintals of maize do you have last year? ------------------------
25. How do you describe the nature of the land you own or have cultivated maize crop in the last
twelve months?
28. If your answer for question number 27 is “YES” How do you repay the loan? (Multiple answers
are possible)
F) Income from food for work/ safety net G) other, specify ________________________
29. If your answer for Q27 is “No”, why you have not credit accesses?
Answer:-
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
63
31. If your answer for Q27 is “yes” How far from your house?...............k/m
6. If your answer for Q4 is “No” what are the possible reasons for the extension agents’ contact
with the farmers to be insufficient? why?
Answer :-
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------
64
7. What are the advices provided by extension agent?
Answer
____________________________________________________________________________
_________________________________________________________________________
8. Where do you gain information on the new farm input and technology?
I. A. from extension worker B. from your parent C. from your relatives D. from media
II. If your answer is from the above one, how do you have informed?
Answer:-
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
9. Do you learn from your relative practice with regarding to farm technology?
A. yes B. no
10 . If your answer for question number 9 is “yes” what are the benefits?
answer---------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
--------------------------------------
11 . If your answer for question number 9 is “ No” why?
Answer______________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
12. Do you spend more time on traditional methods of farm what you observe from your parents?
A. yes B. No
13. If your answer for Q12 is “yes”, what it benefits to your production?
Answer:___________________________________________________________________________
__________________________________________________________________________________
_____________________________________________________________________________
65
14. If You answer for Q12 is “No” why?
Answer:___________________________________________________________________________
__________________________________________________________________________________
________________________________________________________________________________
15. Do you learn by doing and migration or other activates which exposure to new ideas and facilitates
learning with regarding to farming?
A. yes B. No
16. If your answer for question number 15 is “yes” what do you learn by doing and also migrate to
other area?
Answer:-
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________
17. If your answer for Q15 is “No” how do increase your skills with regarding to farm?
Answer:-
__________________________________________________________________________________
__________________________________________________________________________________
_____________________________________________________________________________
66
Appendix -3(Interview question)
Dear respondent, I would like to say thank you for your collaboration to discuss with me on the topic
of farm education and farm productivity issues. The objective of this discussion is to gather the
information about the impact of farm education on farm productivity. So, your active discussion and
responses are needed to gather fruitful information about the selected issues. Therefore, you are
requested to give your answer based on the provided questions.
Sincerely
Mulugeta Abebe
1. What are the main factors that affect the farm productivity?
Answer:-
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. What role education plays in your farm production?
answer:-
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
_____________________________________________________________________
3. How both formal and non-formal educations influence the productivity? Answer:-
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
__________________________________________________________________________
4. What are possible benefits of schooling in farm production?
answer:-
_______________________________________________________________________________
_______________________________________________________________________________
67
_______________________________________________________________________________
_______________________________________________________________________________
_____________________________________________________________
5. Why exposure to extension service and attend formal education is important in farm
production?
answer:-
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
____________________________________________________
68