MEKELLE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

FACTORS AFFECTING WHEAT PRODUCTIVITY OF SMALLHOLDER FARMERS

(A CASE OF ZAGOCH KEBELE)

SENIOR ESSAY SUBMITED TO DEPARTMENT OF ECONOMICS IN FULFILLMENT

OF THE REQURMENT FOR BA DEGREE IN ECONOMICS

PREPARED BY: SHEGAYE EBABU

ID NO; CBE/UR77985/07

ADIVISER: KIDIST GIRMMA (MSC)

MEKELLE ETHIOPIA

FEB 2017
 AKNOWLEDGMENT
First and most I would like to thank the Almighty GOD who helped and support me through my
ups and downs in preparing this paper and my heartfelt gratitude goes to all those that helped me
in preparation of this research paper. My deepest heartfelt thanks expands to my advisor,
KIDEST GIRMA (MSC) for his unrevised sparking tight academic schedule in providing me
valuable supervision, comments, guidance, moral support and advance on the essence and
content of this senior essay to be trust full in this form.
I must express a special gratitude to my lovely father and mother who always stands at my right
side providing every materials and financial help.
I would like to express my honorable gratitude for my friend Teshale Tefera who helped me by
giving material.
Finally I would like to thanks all my respondents who provide available information about the
study honestly.
 ABSTRACT
This takes as its case study factors affecting wheat productivity of smallholder farmers in
zagoch kebele. With the application of descriptive statistics and econometric analysis the
study explored and focused how the production of wheat is should be increased and what
are the factors that affect the yield in the study kebele. The study result shows in the
study area most farmers use inputs, but they are not far behind consumption purpose.
With the application of econometric analysis gender, fertilizer, compost, improved seed,
total cultivated land, number of workers, donkey are significant and positively related
with the dependent variable wheat and age is significant and negatively related.
 ACRONOMYS

CLRM……………………………………Classical linear rig ration model

CSA……………………………………...Central statistical authority
EEA………………………………………Ethiopian economic association
FAO………………………………………Food and agricultural organization
GDP……………………………………….Gross domestic product
GNP………………………………………..Gross national product
OLS…………………………………………Ordinary least square
PADETES…………………………………..participatory demonstration and training extension
system
Table of Contents
AKNOWLEDGMENT....................................................................................................................2
ABSTRACT....................................................................................................................................3
ACRONOMYS................................................................................................................................4
CHAPTRER ONE...........................................................................................................................5
INTRORODUCTION......................................................................................................................5
1.1 BACK GROUND OF THE STUDY..................................................................................5
1.2 Statement of the problem.......................................................................................................6
1.3 Research questions.................................................................................................................7
1.4 Objective of the study............................................................................................................7
1.4.1 The general objective......................................................................................................7
1.4.2 Specific objectives..........................................................................................................7
1.5 Research hypostasis...............................................................................................................7
1.6 Research methodology...........................................................................................................8
1.6.1 Sample size and sampling techniques.............................................................................8
1.6.2 Data source and data collection tools.............................................................................8
1.6.3 Data analysis techniques.................................................................................................8
1.6.4 Multiple regression model specification.........................................................................8
1.7 Significance of the study.....................................................................................................10
1.8 Scopes and limitation of the study.......................................................................................10
1.9 Organization of the study.....................................................................................................10
CHAPTER TWO...........................................................................................................................11
2. LITERATURE REVIEW.........................................................................................................11
2.1 Theoretical Literature review..............................................................................................11
2.1.1. General overviews.......................................................................................................11
2.1.2 Small Holder farmers....................................................................................................11
2.1.3 Determinants of cereal crop productivity.....................................................................12
2.2 Household characteristics of farm operators.......................................................................15
2.2.1 Education and agricultural production..........................................................................16

2.2.2 Gender and agricultural production..............................................................................16

2.2.3Age, family size, landholding size and agricultural production....................................17
 2.2.4 Possession of oxen and agricultural production...........................................................18
2.3 Agricultural production technologies..................................................................................18
2.3.1 Chemical fertilize..........................................................................................................18
2.2 Definition of some concepts................................................................................................19
2.3. Empirical Literature............................................................................................................19
CHAPTER THREE.......................................................................................................................21
3. DATA ANALAYSIS.................................................................................................................21
3.1 Descriptive result.....................................................................................................................21
3.1.1Households Demographic characteristics......................................................................21
3.1.1.1 Respondents education level......................................................................................21
3.1.1.2 Gender of respondents...............................................................................................22
3.1.3 Purpose of farm output.................................................................................................25
3.1.4 Challenges of wheat production...................................................................................25
2.1.5 Improvement mechanism of wheat production............................................................26
3.2 Econometric result...................................................................................................................27
3.2.1 Interpretation of econometric result..............................................................................29
3.2.2 MULTICOLLINEARITY TEST..................................................................................31
3.2.3 HETEROSCEDASTICITY TEST................................................................................33
3.2.4 Normality test...............................................................................................................35
CHAPTER FOUR.........................................................................................................................37
4. CONCLUSION AND RECOMMENDATION........................................................................37
4.1 CONCLUSION....................................................................................................................37
4.2 Recommendation.................................................................................................................38
REFERENCE................................................................................................................................39
APENDIX......................................................................................................................................40
 CHAPTRER ONE

INTRORODUCTION
1.1 BACK GROUND OF THE STUDY
Agriculture is important sector in the world. It provides with all our food consumption and raw
material for most of agro based industrial and also creates employment opportunities for large
population of developing countries. As one of the poorest countries in the world Ethiopia’s
agriculture accounts for about 40% of National Gross Domestic Product(GDP),90% of export
and 85% of total employment (CSA,2009) .
As explained above Cereal crops account 70% of agricultural output to GDP. The production
gain years as between 5 and 17 quintals/hectare. Cereal yield doubled over the past decades, but
in recent years cereal production has stagnated. This is due to a number of factors. These factors
are shortage of rainfall, land degradation, use low input, soil erosion, population pressure and
others. (Seyoumet Al 1998)
Cereal crop productivity in developing countries has not been able to satisfy the food
requirement of the people. Food productions in developing countries like Ethiopia have failed
behind consumption requirement. Today many million people in these countries do not have
access to sufficient food to lead healthy standard of quality life. Increasing cereal crop
production was becoming the main national strategy to many developing countries. (EEA,
2000/01)
The foundation of Ethiopian economy was long remaining agriculture. But development
agriculture requires emphasis on a concurrent development of industrialization. In context this
refers to the development those industries most closely related to agriculture and referred to as
agro- industry.
As agriculture plays a dominant role in the economy the real and sustainable development of
Ethiopia was, in any event unthinkable without sound progress in the expansion of agriculture’s
output. In spite of its importance in the national economy, agricultures were largely based on
subsistence farm household, whose modes of life and works have remained unchanged (CSA,
2009).
In Ethiopia small holder farmers were characterized by dependence on traditional tools and
farming practices, and agricultural produce was transported by the primitive means. These
factors resulted in reduction of farm output (Todaro, 2011).
Approximately 1.4 billion people in the world today live in extreme poverty level that-they
survive on less than the US dollar of 1.25 per day,(World bank data base 2013).842 million
people one out of eight people in the world do not have enough food to eat. 98% of the world
under nourished people lives in developing countries. Among those 223 million people live in
sub Saharan Africa.75%of the world poorest people lives in rural areas and depends on
agriculture and related activities (FAO, 2011).
Zagoch is found south Gondar which is northern part of Ethiopia and there is also the problem
sufficient food leads to poor health and low quality of live. The farmers of Zagochkebeles use
traditional method of farming and due to this cereal crop production area left behind for
consumption purpose.

1.2 Statement of the problem

Even though the government has set strategy at country level to fight wide spread of poverty and
to improve food security through agriculture sector, it is known that the cereal crop productivity
remains very low, especially when it is compared to the rapid population growth. According to
the most recent report of Ethiopian economy association gaining in the yield level in the farming
areas over the past few years for most cereal crops has not been able to increase average yield for
most countries as the whole, (EEA, 1995).
In Ethiopia the cereal crop sector is dominated by small holder farmers those small holder
farmers on average accounted for 95% total area under cereal crop production and for more than
92% of total agricultural output. But cereal crop productivity of small holder farmers is to be
failed to fulfill the food security, (Ayelekuris, 2006).
In Ethiopia improvement in agricultural sector requires a more efficient use of natural resources
such as land, labor and capital, since these resources are major of production, hence a better
performance of agriculture will therefore depends considerable on how well the constraint’s
hindering the proper functioning of these activity’s. Among the major factors behind are a
decline in farm size and subsistence farming, land degradation, variability of rainfall. Extension
service and inadequate transport network are the major determinants that affect agricultural
output, (BirhanuNegaetal, 2001).
Specially, the above mentioned problems are common in the study area .Therefore in this study
the researcher had used the gap which is studied by TekleabAddsie for used ordinary least square
(OLS) estimation to identify the major factor that affect the wheat productivity in Tigray region.
He summarized the result’s fertilizer, education level, irrigation, number of oxen-per day,
compost have significant and positive relationship with wheat productivity while total land,
family size and market distance have significant and negative relationship with wheat
productivity. He concluded that the availability of modern input and government policies in
service providing are good for wheat production of small hold farmers. (TekleabAddssie 2013).
So in this study the researcher was attempted to see the factor that affect wheat productivity in
Zagoch- Ethiopia.so the researcher tries to see the gap by adding another variables like donkey,
herbicide credit and nature of soil which are not used by the above researcher’s and changing the
place of the study because agricultural output productivity is different among different regions
due to the difference in soil fertility, heather and climatic condition and rainfall variability.

1.3 Research questions

The study expects to address the following key questions
 What are the major factors that affect wheat productivity and their challenge of small
holder farmers?
 What are the effects of modern input and donkey in this wheat productivity?

1.4 Objective of the study

1.4.1 The general objective
To analyze the factors that affect cereal crop productivity of small holder farmers Zagochkebele.

1.4.2 Specific objectives

Specific objectives of the study are
 To identify the major factors that affect wheat crop productivity and their challenge of
small holder farmers.
 To examine the effect of modern input and donkey on wheat productivity..

1.5 Research hypostasis

H1: households who use improved seed produce more wheat than households who don’t use it
H2: compost use enhance wheat productivity positively

1.6 Research methodology

1.6.1 Sample size and sampling techniques
The population of the study consists of small holder farmers who are living in 3 sub-kebeles in
Zagochkebele. The entire population cannot be considered due to the presence of large number
of population, time and resource limitation.
The sample size can be calculated using Yamane’s formula
No=n/(1+(e2)*n)
Where No=number of sample size
n=total household in the study area=1190
e=confidence level=0.1
No=1190/ (1+(0.1)21190) =92.2
There are two main techniques of sapling in the research study. These are probability sampling
and non-probability sampling. The study was used simple random sampling techniques, with a
homogenous population in various aspects, like culture, color and living standard etc.

1.6.2 Data source and data collection tools

The study was collected primary data source. Primary data were collected from rural household
farms in the study area. Using questionnaire and structured interview.

1.6.3 Data analysis techniques

The methodology the researcher would use simple descriptive and econometric model in
presenting and estimating factors that affect cereal crop (wheat) productivity of small holder
farmer in the study area. In the econometric model the ordinary least square (OLS) estimation
technique will use in the form of multiple linear regression models will specified as follows.

1.6.4 Multiple regression model specification

This model specified as follows
Yi =α+βjxji +ui
YI=F(Fr,NOLF,NOox,Do,Her,Co,Edu,Gen,Tclw,Age,Is,hlt,)

YI=α+β1fr+β2nolf+β3noox+β4do+β5her+β6co+β7edu+β8gen+β9tclw+β10age+β11is+β12hlt+ui
Where i= 1, 2, 3, ---------------92(sample size)
J = 1, 2, 3---------------12 (number of explanatory variables)
Yi =dependent variable (wheat harvest or wheat yield measures in terms of quintal per hectare)

α=intercept
βj= coefficient of getting independent variable
xji= independent variable
ui= unobserved error or disturbance term .

Wheat (yi):- it is dependent variable simply we get by dividing out per quintal gained from a
plot of land to farm size per hectare use for production of outputs which shows the productivity
of small holder farmers.
Fertilizer (fr ):- it is independent variable which captures the amount of fertilizer (both DAP
and UREA) used per kilogram in 2016 cropping seasons. It has estimated to be positive effect on
production of wheat
Number of labor force in the ith household head (nolf):- this variable incorporates the active
labor force in the ith household head. Since our farming system is subsistence farming, so that
farmers use their own family as a labor force and estimated to be positive effect on wheat
productivity.
Number of oxen per day (no-ox):- households who use more number of oxen per day have
belter performance in wheat productivity. Therefore it has positive effect on wheat yield.
Donkey (do):- it is a dummy variable which takes the value 1 if the households have donkey and
0, otherwise. It is estimated to be positive effect on wheat yield.
Herbicide (hr):- it is a dummy variable which takes the value 1 if the household uses herbicide
0, otherwise. This variable estimated to have negative effect on wheat productivity.
Compost (co):- it is a dummy variable which takes the value 1, if the household uses compost 0,
otherwise. Compost is a natural fertilizer which increases productivity without incurring much
more cost. This variable has positive effect on the dependent variable.
Education (edu):- farmers become more educated they understand and gather information
easily.it estimated to have positive relation with the dependent variable.
Gender (gen):- it is a dummy variable which takes the value 1, if the household head is male 0,
otherwise .males have better performance than females in the production of wheat.
Total cultivated land of wheat production (tclw):- this variable incorporates the total amount
of land that small holder farmers used for production of wheat. It includes own land, rented from
other households land. Farmer who has larger farm land is less productive than farmers with
small plot of land due to efficiency basis. Therefore this variable is expected to have negative
effect on dependent variable.
Age (age):- old farmers are less productive than young farmers. Therefore it is expected to have
negative effect on wheat productivity.
Improved seed (is):- it is an explanatory variable farmer use improved seed are more productive
than farmers without improved seed. Therefore it is expected to have positive effect on the
dependent variable.
Healthy status (hlt):- it is a dummy variable which takes value 1, if the households are healthy
0, unhealthy. It expected to have positive effect on the dependent variable.

1.7 Significance of the study

The result of the study would be an important input for public sector especially for the
agricultural sector and it will also serve as reference for other young researchers which they wish
to conduct a further study around this study area in the future.

1.8 Scopes and limitation of the study

This study was conducted in Zagochkebele; Meskeliza,Zagoch and Dankorko sub- kebeles.It
contains small holder farmers in the study area producing cereal crop production in general
wheat productivity in particular.The results of this study may not be a good representative of all
sub kebeles in the Keble. In addition the researcher faced problems related to shortage of
materials and time constraint.

1.9 Organization of the study

The study contains four chapters. The first chapter is deals about introduction of the study,
second is about some empirical and theoretical review of literature, the third chapter is about data
analysis and the fourth chapter is about conclusion and recommendation of the study results.
 CHAPTER TWO

2. LITERATURE REVIEW

2.1 Theoretical Literature review

2.1.1. General overviews
The small holder farmers are subsistence form most output produced for family
consumption(although, some may be sold or trade in local markets and few staple food crops
usually including wheat, barely, sorghum, rise, corn, teffs) are chief source of food intake.
Output and productivity are low and only the simplest traditional method and tools are used.
Capital invest is minimal, land and labor are the principal factors of production, (Adam smith,
2003).
Subsistence agriculture is highly risky and uncertain in the region where forms are extensively
small and cultivation is dependent on uncertainties of variables rain fall. Average output will be
low and the peasants will be exposed to the very real danger of starvation .Accordingly when
risky and uncertainty are high, small holder farmers may be very reluctant to shift from
traditional technology and crop pattern to a new one that provides higher yields, but entail
greater risk of crop failure, (Adam smith, 2003).
A cereal crop is generally defined as a grass grown for its small edible seed. It has been the most
important source of the world is seed. Cereals as grouped are the most widely adopted crop
species. They can be grown under adverse condition with a least some yield. These broad ranges
of adaption the efficiency of production the ease with which cereal can be stored make them
dependable source of food.

2.1.2 Small Holder farmers

Small holder farmers are farmers which derives their livelihood mainly from agriculture utilize
family labor in farm production most output is produced for family consumption and they are
characterized by practical engagement in input and output market which are imperfect market,
(Dail, Agro-eco a duet, 2011).
Subsistence farming on small plot of land it is way of life for the vast majority of Ethiopian
people and its productivity is low. In spite of the existence of some unused land and potentially
cultivable land, only small areas can plant and weeded by farm family at the time when it uses
only traditional tools. In some areas traditional farming practices must rely primly on the
application of human labor to small pare parcels of land. The given limited area of that a farm
family can cultivate in the context of a traditional technology and the use of primitive tools. This
small area tends to be intensively cultivated. As the result, they are subject to rapidly diminishing
return to increase labor input. In such condition shifting cultivating is the most economic method
of using limited suppliers of labor on extensive tracts of land ,(Michael .P Tadoro, 2003).
Small holder being the back bone of the economy provide the largest portion of basic food
supply for the urban population or raw material for agro-industries and exportable agricultural
commodities. Small holder are characterized by almost exclusive use of family labor in the
production process direct dependence on farm for subsistence requirements, low level of
productivity, absence of farm mechanization and degree of specialization,(Hannover
University,1991).

2.1.3 Determinants of cereal crop productivity

In developed country, productivity agriculture has significantly increased while proportion of the
population in the sector decline. On the other hand, the economies of low income countries of the
world are predominantly agrarian with traditional system and extremely low labor productivity in
the agricultural sector.
Consequently, it is better to outline factors affecting agricultural output specially, cereal crop
output by using some method of arrangement. Different authors used different classification
schemes of agricultural output growth determinants
Wilber et al (2001) divides agricultural output growth determinants into conventional (land,
labor, physical capital, and fertilizer) and non-conventional factors of production which include
private and public agricultural research education, infrastructure, government program and
policies and environmental degradation,(Senai, 2006).
Millikan and Hap well divided the determinant of agricultural output into five major categories.
These are physical input factors, economic factors, organizational factors, cultural and
motivational factors, and knowledge factors. Each of which is further divided into a series of sub
categories, (Millikan and Hap well).
I. The Physical Input Factors

The physical factors further sub divided into non-human (non -labor) physical input and labor
physical input. Non labor physical are land, seeds, water, fertilizer, pesticide, structure, work
animals, tools and machinery and fuel and power other than animal power, (Ibid.p.15).
A. Unpredictable Weather Condition
Lack of adequate rain fall, the variability and seasonality of rain fall affected agricultural output
in general and cereal crop in particular living the country exposed to commercial food imports
and food aids.
B. Erosion and Land Degradation
As population pressure increase particularly in the highlands, farmers intensively exercise
deforestation. This will leave farm lands grazing exposed to erosion followed by massive and
degradation.
C. Land Fragmentation
The increase in the size of rural population coupled with limited area of farming land in the
highlands has led to land fragmentation. As the size of farm house holds increases redistribution
of land has continued reducing per capital and size.
D. Irrigation
Irrigation is the most important determinants of agricultural output. Constraint of on agricultural
development is the amount of water available rather than supply of land. In the near and far east,
there are many regions use the available water resource as intensively as possible, as long as it is
economic to do so, (E.Kuiper, 1965).
II. The Economic Environmental Factors

The economic environment is the determinant of agricultural, particularly cereal crop

concentrates on the development of other sector of the economy. It is inter sectional linkage that
is believed to be the major determinant of agricultural growth. The factors include under the
economic environment by Millikan and Hap good are:
 Transport, storage, processing and marketing facilities for product
  Facilities for the supply and distribution of inputs including credit

 Input prices including interest rate

 Product prices including price of consumer

 Taxes, subsidies and quotas

Lack of infrastructure is one of the critical problems especially in the rural country of Ethiopia.
This hinders agricultural production process from purchase of inputs up to marketing product.
Transportation cost will account a high proportion of price of agricultural products.
The existence of agricultural credit market has a lot of impact on the amount of farm output
when farmers cannot afford top finance purchases of improved seeds, fertilizer, pesticides and
provision of irrigation facilities, etc. are the only option to resemble is credit. Thus, the absence
of credit facilities could become a consequential bottleneck to use the modern technology. In this
regard, the problem of peasant farmers deserves species consideration, (AssefAdmaise, 1987).
This is very critical problem as agricultural market play a significant role in increasing
production and stimulating economic development, (Mullat). Further, Mullat points out those
efficient and integral market ensure optimal allocation of resources in agriculture and motivate
farm to increase output. Under developed output, input and capital market could negate any
effect aimed and at increasing agricultural production and productivity, (Ibid).

III. Organizational factors

Organizational factors for cereal crop production development listed by Millikan and Hap good
is organizational composed of land tenure, farm size and legal form, general government service
and policies and voluntary and statutory farmers organization for coordinative physical input,
economic service, local government and diffusion of knowledge, (Millikan and Hap good ).
The organizational factors is regarded as the means to bring the package to farmer’s producer;
from ministry and research station to the farm itself without these factor the package is
incomplete and the other factors will remain barren. The main advocator of organizational
factors is important input to increase agricultural output is experts of public administration. The
possible solution of agricultural problem in developing countries lies better organization, better
training of civil servants, and higher status for government program in agriculture, (Ibid).
 IV. Knowledge factors

The major advocators of the importance of farmers’ education to increase productivity of crops
and provide high pay off in changing, moldering environment then in traditional agriculture
(T.W.schultz)
In transforming traditional agriculture farmers use all the variable techniques of production
efficiently. This means “farmers are efficient but poor.” The only option for him, to break this
dead lack to increase technical skill of production in economic terms, this would shift the
production possibilities frontier out wards giving more yield as belief of T.W.schultz.
The technological advancement is the obvious difference between farmers in developing and
developed countries. Farmers in developing countries still use animal power to cultivate while
their counter parts in the the poor performance of food grain production in developing countries,
(MullatDemeke).developing countries ease their burden by using machinery and equipment for
agricultural production. Low level of technology utilization is one of the major factor behind
V. Cultural and motivational factors
Only the availability of improved technologies and their distribution or extension workers do not
sufficient for the proper implementation of agricultural technologies distribution. Cultural and
motivational factors for the adoption of improved technologies ply a key role to fill the gap and
bring about on end tour goals. It was commonly believed that Africa peasants do not react to
improved technology and economic incentives. It is Currently believed that peasant production is
target production. The peasants’ desire a target income and when they get this do not care to
expand production and they may do not even harvest crop, (Emanuel Okwuosa). In general this
factor include: social structure, cultural values, dynamic of peasant communities, process of
social cultural change and integration and value of agricultural institution practice with the
culture of society and etc.

2.2 Household characteristics of farm operators

The household characteristics consist of many variables that affect the agricultural production of
farm operators. Some of these variables are: age, gender, education level, family size,
landholding size and possession of oxen, as reviewed below.
2.2.1 Education and agricultural production
Research findings have indicated the importance of education in agricultural production and
income. For example, Asfaw&Admassie (2004, p. 216) reported that the conventional factor of
production such as growth of stock, of capital and labor were unable to explain fully the growth
in national income. The contribution of education to the growth of national income was
recognized in the 1960s.To achieve agricultural development, the investment in production
techniques and technology should be supported by a comparable investment in human capital
(Schultz in Bingen et al., 2003, p. 407). This is because information and knowledge are
prerequisites for farmers to adopt technology, access input, change ways of doing things and
market their produce (Chow a, Garforth, &Cardey, 2012, p. 8).Formal education enhances
farmers’ engagement in environmental programs and methods for the sustainability of
agriculture (Burton, 2013, p. 22).Education is also believed to stimulate economic growth by
enhancing the productive capability of farmers as well as eliminating the customs that are
contrary to growth such as traditional word-of-mouth communication methods (Asfaw,
&Admassie, 2004, p. 216

2.2.2 Gender and agricultural production

Gender refers to socially constructed roles and relationships of women and men in a given
culture or location (Adeoti, etal, 2012, p. 238). In enhancing agricultural production and income,
the full participation of men and women is very important. Women tend to be the major players
in the farm labour force engaged in production, harvesting and processing activities (Jeffry,
&Sulaiman, 2013, p. 470).It is also known that the majority of food is produced by women
farmers and they are Responsible for fulfilling the basic needs of the family
(Camara,etal,2011,p.141).Studies have also indicated that women farmers are more
Environmentally conscious compared to men farmers (Burton, 2013, p. 22). Nevertheless, there
are research findings that indicate the existence of gender inequalities in the agricultural sector.
For instance, there is categorization of some crops to be “men’s crops” and others as “women’s
crops” (Mohammed, & Abdulquadir, 2011, p. 37). A study conducted in Ghana by Ideate et al.
(2012, p. 240) indicated that vegetable production demanded more physical strength and was
dominated by men. On the other hand, de Brauw, Li, Liu, Rozelle and Zhang (2008, p. 343)
revealed that, in China, the contribution of women to livestock production was 64 per cent while
59 per cent of the marketing work was dominated by men. They noted that this is labour
feminization and that the earnings are controlled by their male counterparts. Women farmers are
also challenged by the absence of capital, information and access to markets which prevents
them from producing enough to fulfill the basic necessities (Jeffry, &Suleiman, 2013, p. 470).
The scarcity of knowledge related to women’s rights exposes them to land grabbing and the loss
of their heritage (Camera et al., 2011, p. 146).

2.2.3Age, family size, landholding size and agricultural production

Agricultural production is influenced by other household characteristics such as the farm
operator’s age, family size and landholding size. The age of the household head is a proxy
variable for the farming experience of farm operators. Farmers are highly dependent on their
previous knowledge of farm practices in cultivating different crops (Adomi, etal, 2003, p. 390).
Hence, experienced farmers are expected to enhance the productivity of their holdings. However,
it is not without limit as older farmers lack the required physical strength on the farm and lower
the probability of technology adoption (Mous, etal, 2011, p. 363; Burton, 2013, p. 23).Land is
the most critical natural resource for countries like Ethiopia where the agricultural sector is the
engine of the national economy (Amsalu,etal,2006, p. 448).Farm operators with larger
landholding sizes would have a better farm income if sufficient family labor was available. This
leads to an increased demand for children who can work on the land (Hedican, 2006, p. 324;
Kim, &Park, 2009, p.278.It is not possible to expand the landholding size without matching it
with an increase in the size of the household. Hence, households with larger families face a
challenge to feed each of the family members and this will have its own negative effect on the
nutritional status of the family (Olayemi, 2012, p. 137).
2.2.4 Possession of oxen and agricultural production
Historically, for thousands of years, oxen have been recognized as the first draft animals to serve
human beings, to cultivate land and pull heavy loads (Bryant, 2010,p. 360).The possession of
oxen determines the farming ability of farmers because if farmers do not have oxen they would
be obliged to rent out their land to other farmers (Holden et al., 2004, p. 375). In this case,
farmers would enter into sharecropping. This further diminishes the production and income of
the household as the yield is shared with oxen owners. There are advantages associated with
owning oxen. Oxen owners can cultivate and sow their land at the right time. This has a positive
impact on the productivity of land. In addition, oxen could also be rented out on a daily payment
basis to till the land for other households. Therefore, they may serve as a source of additional
income for the owners.

2.3 Agricultural production technologies

Agricultural production technologies include biological and chemical technologies. Specifically,
these technologies include chemical fertilizers, selected seeds or High Yielding Varieties,
irrigation and soil quality enhancing technologies. Farmers use these technologies in order to
enhance the production and productivity of the land. It is also indicated that, for poor farmers,
adoption of technology places new demands on their limited resource base (Kamruzzaman, &
Takeya, 2008, p. 218).

2.3.1 Chemical fertilize

African governments have promoted the increasing use of agricultural inputs in their own
countries inspired by the Asian Green Revolution which was brought about by using high-
yielding seed and fertilizer technologies(Crawford, Kelley, Jayne, &Howard, 2003, p. 277).In a
similar vein, Aune&Bationo (2008, p. 121) argued that the entry point for intensification is the
use of organic and inorganic fertilizer in the Sahel because, if soil fertility is not improved, the
use of other technologies such as high-yielding varieties will not have a significant impact.
Crawford et al. (2003, p. 281-2) further indicated that the objectives of input promotion
strategies have many features such as financial, economic, social and political objectives. The
financial aspect of the input promotion strategy is to increase the net income of farmers, traders
or other participants in the agricultural economy. The economic feature of input promotion
strategy is also to increase the real income of the society as a whole. The social aspect of the
input program is the improvement of welfare indicators that are difficult to measure in terms of
monetary values. Some of the social objectives are to improve nutrition intake and national food
self-sufficiency. The political objective of the input program arises because of the government
intervention for the sake of equalization of benefits. Some programs may be designed
intentionally to build political support; as a consequence, they may benefit one or more groups at
the expense of others.

2.2 Definition of some concepts

1. Farming - the word farming refers to ploughinig or cultivating of land for crop.
2. Production function - is purely physical concept it is the ; mathematical representation ; Which
shows the functional relationship between inputs and outputs or it is technical relation which
connects factors inputs and the level of agricultural products,
3. Production -is the process of combining resources in the creation of agricultural products,
4. Determinant-variables which affect level of productivity.
5. Crop-the word crop refers to plants harvested by man for economic purposes or when several
plants similar in respect to life cycle morphology or physiology.
6. Technology- it implies specific state of art and science that is used to transfer from a
combination of inputs to output.
7. Kebeles is smallest administrative units of Ethiopia which is sub division of woreda

2.3. Empirical Literature

According to EEA,(2000) agricultural production in Ethiopia is characterized by severe
fluctuations usually following the fluctuation in the rears and highly correlated to the overall
performance of the economy. Agricultural share in GDP is about 53% during the derg and 51.2%
under EPDRF. The highest growth rate in agriculture was a achieved in 1986/87when it grew by
18.8% while the lowest was achieved during the drought year of 1984/85 where it declined by
about 21%.
Stephenson,(1995) studies shows in Ethiopia cereal crop sectors are dominated by small holder
farmers. The small holder farmers on average account for 95% of total area under crop and for
more than 90% of total agricultural output. In addition, according to MEDAC (1999), 94% of
food crops are produced by small holder farmers.
Small holder farmers are vital for Ethiopia’s agriculture and rural economy. Small holder farmers
defined as those marginal and sub marginal farm house holds that own or land cultivated less
than 2.00 hectare of land cultivate about 78% of the countries farmers (at agricultural census,
1990/91). These small holder farmers owned only 23% of the total cultivated land their
contribution to national grain production was nonetheless 41%. Their contribution to household
food security and poverty alleviation is thus disproportionally high and is increasing. Moreover,
as the national population increases, so does the number of small holding (FAO, corporate
document repository).
Cereal are the most dominant among the field of crops accounting for 88.3% and 83.2% of total
population and cultivated area respectively for the period of 1980 -1996. The performance of
field crops improved after 1991 owning improved policy environment increased availability of
input such as fertilizer and relative good weather cereal crop production rose to 110.6 million
quintals, while area harvested jumped to 8.8 million hectors in 1996 (EEA, 2000)
In the performance of cereal from 1997 to 2000 is that of the output achieved even during this
low period was significantly better than the average output levels of derg period. The production
in 1999/2000 was higher than the derg period by about 48%. On the other hand, land covered by
cereals increased by 44.8% in 1999/2000 (EEA, 2000).
The performance of the main cereal staples that included wheat, teff, maize and sorghum was
once again remarkable in the reporting period close to 145 million quintals of cereal crops have
been harvested from 8.8 million hectares of farm lands. In terms of production the years of
2008/9 production exceeds the achievement of the 2003/4 production year by 70% and
represents of the fifth consecutive bumper harvest. Official sources indicate that over the past
five years, production has increased an average by 14% (EEA, 2007/08).
According to EEA,(2007) shows the agricultural sector has been said that time and again the
agriculture is the backbone of the Ethiopian economy not just because it constitutes almost half
of the GDP but also because more than 85%of the population still depend on it for their
livelihood. As a result the government has given more attention to the development of
agriculture. So that they would increasingly benefit from small plot of land, and surplus labor
could increasingly move to industrial sector. However, the attempt to increase productivity has
not yield the expected outcome.
 CHAPTER THREE

3. DATA ANALAYSIS
This chapter presents the results from the descriptive and economic analysis. The descriptive
analysis made up of tools such as mean, maximum, standard deviation, minimum, percentage,
frequency and cumulative frequency. Econometric analysis was carried out to identify the most
important factor that determines wheat productivity and to measure relative importance of
significant explanatory variables on wheat productivity.

3.1 Descriptive result

Socio-economic and household characteristic of the respondents were analyzed using descriptive
statistics.

3.1.1Households Demographic characteristics

3.1.1.1 Respondents education level
Education(EDU);-according to the study 38.04% of the household are illiterate,.39.13%of the
household complete primary education and 22.83% of the household complete secondary
education. In general based on the survey 61.96% of households in the study area are literate.

Table 3.1 education level of respondents

Education level Frequency Percentage
Illitrate 35 38.04%
Grade1 up to 4 19 20.65%
Grade 5 up to 8 17 18.48%
Grade 9 up to 12 21 22.83%
Total 92 100%
Source;own survey 2017
3.1.1.2 Gender of respondents
Gender (GEN);-gender of the respondent. According to the finding 78.33%0f the respondent is
male farmers and the remaining 21.67 are female farmers. The result shows there is high
variation of gender in production of wheat.
Table 3.2 shows gender of the respondent
Gender of household Frequency Percentage
Female 26 28.26%
Male 66 72.74%
Total 92 100%
Source; own survey 2017

Sum WHT AGE FR NALF NOX DO HLT IS TCLW HER

Variable Obs Mean Std. Dev. Min Max
WHT 92 12.61957 6.710403 3 30
AGE 92 45.11957 10.29226 26 65
FR 92 108.1522 73.10882 0 350
NALF 92 2.815217 .9937093 1 5
NOX 92 1.717391 .7890192 0 4
DO 92 .5326087 .5016695 0 1
HLT 92 .6195652 .488154 0 1
IS 92 129.2935 70.54179 0 300
TCLW 92 1.019022 .4245775 .25 3
HER 92 .4565 .500 0 1

Age (AGE);-the age of sample respondents is 45.11 year on average and standard deviation is
10...29 which shows the variation of households on age. The maximum age of the household in
the study area is 65 and minimum age of the respondent is 26 but doesn’t mean there is no
individual whose age is above 65 years rather it shows the maximum age of the productive
farmers. Graphically the effect of age on wheat productivity is shown as follows.
 Lowess smoother
70 60
age of household in year
40 50
30

0 10 20 30
annual production of wheat of households
bandwidth = .8

Figure 3.1 shows effect of age on wheat productivity.

The graph shows the relation between age and productivity of wheat, which is negative. This
shows young farmers are more effective than old farmers because as age rises the family size
increases this pushes to reduce productivity.
Number of active labor force (NALF);-on average the number of active labor force of the
respondent is almost 3 and its standard deviation is .9937 it shows the variation of labor force of
the households in the study area. According to the result most of the respondents have small
number of active labor force and it force to produce low amount of output.
3.1.2 Socio-economic characteristics of households
Wheat (WHT);-this shows the total amount of wheat produced by the household of the study
area. According to the study the average amount of wheat produced by the household of the
study area is 12.61quintal per hectare, 6.71 of standard deviation,3 quintal of minimum output
and 30 quintal of maximum amount of wheat. Based on the result there is high productivity
variation among farmers in the study area. The result shows the variation of productivity is due
to the different in use of modern inputs among farmers.
Fertilizer: -The sample survey obtained from 92 respondents displayed that almost all sample
households use chemical fertilizer cultivation in the main cropping season of 2016. According to
the survey on average the respondents use 108.15 kg of fertilizer,0 kg of minimum and 350 kg of
maximum fertilizer and 73.59 of standard deviation. This regression result shows in the study
area having higher standard deviation in the use of fertilizer. This reflects that there is high
variability of using fertilizer in the study area results high variation in productivity among the
producers.
Number of oxen per day (NOX);-the number of oxen per day used to produced wheat.
According to the study households in the study area have on average of 2 oxen, 4 of maximum
oxen and 0.789 of standard deviation. This shows there are some households who has not oxen.
Improved seed (IS);-According to the study the average use of improved seed is 129.29 kg,
70.54 standard deviation and 300 kg of maximum use of improved seed and there are households
not use improved seed. Based on the finding there is high variation of use of improved seed
among households in the study area.
Total cultivated land of wheat production (TCLW);-the total amount of land used to cultivate
wheat. The survey shows on average the respondents use 1.019 hectare of land used to produce
wheat and 0.4245 of standard deviation, which indicates that the variation of households owned
land. According to the respondents response there is high land inequality in owning land in the
study area.
Compost (CO);-compost is a natural fertilizer used by households without incurring much more
cost according to the study 55.43% of the respondents are compost users and 44.57% of the
households are not use compost.
Table 3.3 shows compost users of the respondent
Use of compost Frequency Percentage
No 41 44.57%
Yes 51 55.43%
Total 92 100%
Source; own survey 2017
Herbicide (HER);-a dummy variable which takes value 1,if the respondent uses herbicide
0,otherwise.according to the finding 45.65% of the respondents are use herbicide and the
remaining 54.35% are not use and standard deviation of 0.5.This shows there is variation of
herbcide use among the respondents.
Donkey (DO);-based on the result 53.26% of the farmers have donkey and the remaining
46.74% have not a donkey.

3.1.3 Purpose of farm output

In the study area the household produce wheat for consumption of their family and their income
purpose. According to the survey 65.22% of the respondent production wheat for consumption
purpose and 34.78%for both market and consumption purpose. This shows the study area
practice subsistence farming and households have no other income generating activity other than
agriculture. The part of wheat production which is not consumed by the human being is also
services as sources of food for livestock as many respondents said.
Table 3.4 indicates the purpose of producing wheat of the respondents
Purpose of farm output Frequency Percentage
For consumption 60 65.22%
.For both market and 32 34.78%
consumption
Total 92 100
Sources; own survey 2017

3.1.4 Challenges of wheat production

Although agriculture is the basic sources of income in the study area, the sector is characterized
by low level of production and productivity due to crop desease, bad weather, smallness of farm
land, lack of accesses to fertilizer, and, low education level etc.
According to the survey 38% of the respondents respond that bad weather and crop disease are
the main problem that affect wheat production and crop disease would reduce the yield of wheat
by affecting the plant of wheat on the farming area.
Lack of accesses to fertilizer and smallness of farm land also the main problem of farmers in the
study area. Many respondents told that due to lack of accesses to fertilizer and low accesses to
credit they are unable to produce surplus production and forced to produce subsistence food.
Table 3.5 indicates the respondents response on the challenge of wheat production
Challenge of wheat frequency percentage
production
Crop related disease 28 30.43%
Low education level 14 15.22%
Smallness of farm size 14 15.22%
Lack of accesses to 2 2.17%
fertilizer
Both smallness of farm 13 14.13%
size and lack of accesses
to fertilizer
Bad weather 7 7.61%
Both bad weather and lack 14 15.22%
of accesses to fertilizer
Source; own survey 2017

2.1.5 Improvement mechanism of wheat production

Based on the result of the survey crop diseases, lack of accesses to fertilizer, low accesses to
farmland are the major serious constraint of the study area due to this, 33.7% of the respondents
replays that the provision of medicine for crop disease,66% replays providing additional
farmland and sufficient fertilizer is help to improve our production and productivity.

Table 3.6 indicates household’s respondent of improvement mechanism of the problem

Improvement mechanism of wheat frequency percent
production
Providing additional farm land 15 16.3%
Providing medicine for crop disease 31 33.7%
Providing sufficient fertilizer 25 27.17%
Both providing additional farmland 21 22.83%
and sufficient fertilizer
Total 92 100%
Source; own survey 2017
3.2 Econometric result
The objective of the study was to empirically examine factors that affect wheat productivity
among farm households which are an important limiting factor for wheat productivity. The result
of estimation indicated that some of the variable likefertilizer, number of active labor force,
improved seed, number of oxen, compost, donkey, total cultivated land are positively explain the
productivity of wheat. And the model was better fit in explaining the variability in the dependent
variable (wheat yield).

reg WHT AGE GEN EDU FR NALF NOX HER CO DO HLT IS TCLW

Source SS df MS Number ofobs = 92

F (12, 79) = 122.14
Model 3888.11934 12 324.009945 Prob> F = 0.0000
Residual 209.565443 79 2.65272713 R-squared = 0.9489
Adj R-squared = 0.9411
Total 4097.68478 91 45.0295031 Root MSE = 1.6287
WHT Coef. Std. Err. t P>t [95% Conf. Interval]

AGE -.0541294 .0220091 -2.46 0.016** -.0979375 -.0103213

GEN .8262559 .4886736 1.69 0.095* -.1464245 1.798936
EDU -.2625059 .5900125 -0.44 0.658 -1.436896 .9118847
FR .0091663 .0037637 2.44 0.017** .0016749 .0166577
NALF 1.512777 .3602888 4.20 0.000*** .7956405 2.229914
NOX 2.391107 .436571 5.48 0.000*** 1.522134 3.26008
HER -.6542718 .4081017 -1.60 0.113 -1.466578 .1580344
CO 1.659902 .7252701 2.29 0.025** .2162876 3.103516
DO 1.352413 .7913949 1.71 0.091* -.2228188 2.927646
HLT -.3993755 .5202361 -0.77 0.445 -1.43488 .6361285
IS .0086943 .004383 1.98 0.051* -.0000299 .0174185
TCLW 2.350419 .6415909 3.66 0.000*** 1.073365 3.627474
_cons .8798321 1.140021 0.77 0.443 -1.389323 3.148988

Note;-* ** and *** are shows the variable are statistically significant at 10%,5% and 1%
confidence level respectively.
Source; own survey 2017

3.2.1 Interpretation of econometric result

The result of regression analysis show that, from twelve explanatory variable used in the model
only gender, fertilizer, number of active labor force, number of oxen,compost, donkey, improved
seed, and total cultivated land of wheat production have positive and statistically significant
effect on wheat yield at 5% level of significance. And age is significant and negative effect on
wheat productivity at 5% level of significance to influence wheat productivity of small holder
farmers and the general interpretation of all variables is explained as under
Age;- according to the result age of household affect productivity negatively. The coefficient is
---0.0541 which reflects as age increase by one year productivity wheat will decrease by
0.0541kg or as farmers become older their productivity will reduced by 0.0541kg.Older farmers
lack the required physical strength on the farm and lower the probability of technology adoption
results less productive as the result shows. Unlike (Adomi,etal 2003) age is negative effect on the
dependent variable.
Gender;- a dummy variable which takes value 1,for male and 0,for female. According to the
study males are more productive than females by 0.8262 or males produce higher wheat than
females by 0.8262 quintal. Males are more productive than females and this variable is
significant at 10% confidence level.
Fertilizer: - looking into the result this variable affect productivity positively. The coefficients is
0.0091663 which shows that 1 kg increase in fertilizer result in 0.009166 kg increase in wheat
productivity for farmers other variables remain constant. Since it is statistically significant at 5%
level of significance. Fertilizer is a modern farm input that improve the productivity of farmers.
Based on the survey most household’s respond that lack of accesses to fertilizer matters our
productivity. This variable has very significant positive impact on wheat productivity, not only
on productivity it has also significant positive effect on bran or chaff, which is importance for
animal food as many of the respondents said.

Number of active labor force (NALF);-it have positive effect on wheat productivity. As a
developing country farmers in the study area use their family as labor force. The coefficient of
this variable is 1.5127this shows as number of active labor increase by one causes 1.51277
quintal increase in wheat productivity.it has significant and positive effect on the dependent
variable.it is statistically significant at 1% level of significance.
Number of oxen (NOX);-oxen have been recognized as the first draft animals to serve human
beings, to cultivate land and pull heavy loads. The possession of oxen determines the farming
ability of farmers because if farmers do not have oxen they would be obliged to rent out their
land to other farmers. It has a positive impact on wheat productivity or households having more
number of oxen are more productive than who have small number of oxen due to plowing
alarmingly, such that as number of oxen changes by1 causes 2.39 quintal change in wheat
productivity for the study area. This variable is significant for at 1% level of significance.
Compost (CO) ;- it is binary variable which takes value 1 for households use compost and 0
otherwise .This variable have positive impact on wheat productivity and its coefficient is 1.6599
implies farmers who use compost produce more output than farmers who not use herbicide by
1.6599 quintal.it shows compost affect the plant of wheat and rise its productivity. The fertile
characteristic of the variable increase the productivity of wheat through affecting the plant of
wheat as the respondents said.
Donkey(DO) ;-it is discrete variable which takes value 1 households who have a donkey and 0
otherwies.According to the estimation result donkey have significant and positive effect on
wheat productivity. The coefficient is 1.352 which shows households who have a donkey
produce high wheat than households who haven’t a donkey by 1.352 quintal. These also express
donkeys have significantly affect production of wheat by easily moving materials that require to
cultivation of wheat. It is statistically significant at 10% level of significance.
Improved seed (IS); it is a special seed measured in kg.it has positive effect on the productivity
of wheat. The coefficient is 0.01343 which reflects a 1 kg increase improved seed causes
0.008694 quintal change in productivity of wheat or as farmers change their use of improved
seed by 1 kg their output will be changed by 0.008694 quintal. This variable is statistically
significant at 10% level of significance.

Total cultivated land of wheat production (TCLW); Land is the most critical natural resource
for countries like Ethiopia where the agricultural sector is the engine of the national economy.
This variable shows the amount of land that used to cultivate wheat both owned and
sharecropping in hectare. According to the result this variable is positive effect on the explained
variable or households who have more farm lands are more productive than who have small farm
land .the coefficient is 2.35 which reflects as farmland changes by 1 hectare causes 2.35 quintal
changes in productivity of wheat. These also express households who have more farmland
produce efficiently and effectively. This variable is statistically significance at 1% level of
significance.

3.2.2 MULTICOLLINEARITY TEST

The existence of multcollinearity might cause the estimated coefficients to have wider
confidence interval, higher R2 with insignificant t-ratios and wrong signs that might lead to
wrong conclusion. Accordingly, if multcollinearity exists between variables, it does not give
sense in economic meaning in this case dropping one of the variable that has high vifvalue is a
remedial option from other different alternatives. Moreover, it is difficult to assess the separate
influence of each independent variable with multcollinearity in CLRM. The problem of
multcollinearity must be checked, and if it exists, some remedial measures must be taken
(Gujrati,2004).

.. vif
Variable VIF 1/VIF

DO | 5.12 0.195322
NOX | 5.11 0.195582
NALF | 4.40 0.227421

CO | 4.01 0.249441
IS | 3.28 0.304938

EDU | 3.02 0.331473

FR | 2.60 0.385021
TCLW | 2.55 0.392845

HLT | 2.21 0.451998

AGE | 1.76 0.568099

GEN | 1.68 0.595560

HER 1.43 0.697789
-------------
+----------------------
Mean VIF
3.10

In this estimation the most familiar test of detecting the problem of multcollinearity has been
used. Accordingly, the result clearly shows that there is no problem of multcollinearity among
variables since the value of VIF for all variables is below the rule of thumb value (10). If the
value of VIF for any variable is greater than 10, then we would say there is a serious problem of
multcollinearity. However, the VIF value is far less than 10, implying that no danger or there is
no sever multicollinerity.

3.2.3 HETEROSCEDASTICITY TEST

One of the important assumptions of the CLRM is that the variance of each disturbance term U 1
conditional on the chosen value of explanatory variables is a constant number equal to δ 2. This is
the assumption of homoscedasticity, or equal or homo spread, that is, equal variance. However,
if the conditional variables of the explained variables continuously increase or decrease as the
value of the explanatory variable change, then the problem of hetroscedasticity is encounter. This
is the case, as homoscedasticity is one of the requirements of OLS estimation, estimation of
population parameters using CLRM will fail to be acceptable. The estimation of population
parameters will not be constant. To test it, the study has taken Breuch Pagan test and robust
standard error test (Gujirat,2004).

. hettest
Breusch-Pagan / Cook-Weisberg test for heteroskedasticity
Ho: Constant variance
Variables: fitted values of WHT
chi2(1) = 11.46
Prob>chi2 = 0.0007
The result shows that the presence of hetroskedasticity problem.so that in order to avoid the
problem of hetroskedasticity robust standard error test is made as follows

. reg WHT AGE GEN EDU FR NALF NOX HER CO DO HLT CR IS TCLW,robust

Linear regression Number of obs = 92

F( 13, 78) = 123.35
Prob> F = 0.0000
R-squared = 0.9493
Root MSE = 1.6326

Robust
WHT Coef. Std. Err. t P>|t| [95% Conf. Interval]
AGE -.0547953 .0228054 -2.40 0.019 -.1001974 -.0093932
GEN .8640081 .4595653 1.88 0.064 -.0509161 1.778932
EDU -.2940003 .5596562 -0.53 0.601 -1.40819 .8201896
FR .0087217 .0034111 2.56 0.013 .0019307 .0155126
NALF 1.47832 .3127316 4.73 0.000 .8557196 2.100921
NOX 2.383373 .6086492 3.92 0.000 1.171646 3.595101
HER -.6442757 .3520194 -1.83 0.071 -1.345092 .056541
CO 1.72741 .5961071 2.90 0.005 .5406516 2.914168
DO 1.287957 .6699489 1.92 0.058 -.045809 2.621723
HLT -.3938536 .4878557 -0.81 0.422 -1.3651 .5773925
CR .3128877 .4048463 0.77 0.442 -.4930994 1.118875
IS .0087278 .0043086 2.03 0.046 .0001501 .0173056
TCLW 2.315513 .5315722 4.36 0.000 1.257234 3.373792
_cons .9378662 1.115729 0.84 0.403 -1.283379 3.159111

The problem of hetroskedasticity is avoided or there is no hetroskedasticity after robust test.

3.2.4 Normality test

. swilkei

Shapiro-Wilk W test for normal data

Variable Obs W V z Prob>z

ei 92 0.98807 0.919 -0.186 0.57374

.
 Kernel density estimate
.3
.2
Density
.1
0

-4 -2 0 2 4 6
Residuals
kernel = epanechnikov, bandwidth = 0.5207

The result shows the error term is normally distribute at 0 mean and constant variance.
 CHAPTER FOUR

4. CONCLUSION AND RECOMMENDATION

4.1 CONCLUSION

Cereal crop production in developing countries is never enough to satisfy the food requirement
of the people. Therefore knowing factors that affect cereal crop productivity is a forefront work
in the complex process of policy making regarding agricultural productivity and ensuring food
security .
This analyses the factors affecting wheat productivity of small holder farmers. The major finding
of the study clearly indicated that the household farmers of the study area are mostly smallholder
farmers whose wheat productivity is low.
The result of this study showed that the wheat productivity of small holder farmers are directly
related with fertilizer, number of active labor force, number of oxen,compost,donkey,improved
seed,andtotal cultivated land of wheat for the study area. On the other hand age is negatively
affect productivity of small holder farmers for the study area and households use their output
mostly for consumption purpose.
Furthermore, the argument that inputs like fertilizer, improved seed, and compost enhance wheat
productivity of small holder farmers is valid which would means that the farmers who use these
modern inputs are more productive in wheat production than that of those who not use.
In addition to this the smallholder farmers in the study area are mostly males means that there is
high male farmers than female farmers.

Additionally, the study indicated that availability of modern input, provision of additional farm
land, the provision of medicine for crop disease, provision of sufficient fertilizer and government
policies in service providing are good for wheat production of small holder farmers in the study
area.

Generally the study result shows smallholder farmers in the study area use inputs like fertilizer,
improved seed but produce mostly for consumption purpose.

4.2 Recommendation
These deals with some recommendation drown based on the results of the study in which the
small holder farmers of the Keble should focus on in order to promote wheat production.
 There are problem of timely provision of adequate fertilizer, so the government should
provide adequate fertilizer timely.
 There is also the problem of crop related disease the government should provide
medicine for crop related disease in the time of harvest.
 To manage the surplus, the following points need attention
 Timely harvesting of matured crop
 Create awareness among farmers how to preserve, handle, save and avoid from
any miss using of production.
 The government should give the fertilizer subsidies to encourage small holder farmers to
use fertilizer and compensate the lower product price
 To improve the productivity of smallholder farmers also, the following points should be
meet
-Provide modern inputs timely
-Provide insurance or compensation when farmers face risk
-Provide or give reward for special farmers or give incentives for farmers
-Provide accesses to basic infrastructural facility
-Create market demand for agricultural products by expanding industries
 To improve land productivity the small holder farmers must use land management
practice method like terracing and tree planting.
 To overcome from problem of shortage of land, the farmers should use the existing
land effectively and efficiently as much as possible by producing twice in a year by
using irrigation activity.
  Generally to improve the productivity of smallholder farmers the researcher
recommends government should fulfill all the above listed points.

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 APENDIX
Regression result

reg WHT AGEGEN EDU FR NALF NOX HER CO DO HLTIS TCLW

Source SS df MS Number ofobs = 92

F( 12, 79) = 122.14
Model 3888.11934 12 324.009945 Prob> F = 0.0000
Residual 209.565443 79 2.65272713 R-squared = 0.9489
Adj R-squared = 0.9411
Total 4097.68478 91 45.0295031 Root MSE = 1.6287

WHT Coef. Std. Err. t P>t [95% Conf. Interval]

AGE -.0541294 .0220091 -2.46 0.016 -.0979375 -.0103213

GEN .8262559 .4886736 1.69 0.095 -.1464245 1.798936
EDU -.2625059 .5900125 -0.44 0.658 -1.436896 .9118847
FR .0091663 .0037637 2.44 0.017 .0016749 .0166577
NALF 1.512777 .3602888 4.20 0.000 .7956405 2.229914
NOX 2.391107 .436571 5.48 0.000 1.522134 3.26008
HER -.6542718 .4081017 -1.60 0.113 -1.466578 .1580344
CO 1.659902 .7252701 2.29 0.025 .2162876 3.103516
DO 1.352413 .7913949 1.71 0.091 -.2228188 2.927646
HLT -.3993755 .5202361 -0.77 0.445 -1.43488 .6361285
IS .0086943 .004383 1.98 0.051 -.0000299 .0174185
TCLW 2.350419 .6415909 3.66 0.000 1.073365 3.627474
_cons .8798321 1.140021 0.77 0.443 -1.389323 3.148988

. vif
 Variable VIF 1/VIF

DO | 5.12 0.195322

NOX | 5.11 0.195582

NALF | 4.40 0.227421

CO | 4.01 0.249441

IS | 3.28 0.304938

EDU | 3.02 0.331473

FR | 2.60 0.385021

TCLW | 2.55 0.392845

HLT | 2.21 0.451998

AGE | 1.76 0.568099

GEN | 1.68 0.595560

HER 1.43 0.697789

-------------
+---------------------
-
Mean VIF 3.10

.
 . hettest

Breusch-Pagan / Cook-Weisberg test for heteroskedasticity

Ho: Constant variance
Variables: fitted values of WHT

chi2(1) = 11.46
Prob>chi2 = 0.0007

swilkei

Shapiro-Wilk W test for normal data

Variable Obs W V z Prob>z

ei 92 0.98807 0.919 -0.186 0.57374

 MEKELLE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ECONOMICS
Dear respondents this questioner is prepared to conduct a senior essay for the requirement of
bachelor of art degree in economics. The main objective of this questioner is to collect reliable
data about the factors affecting wheat productivity in zagochkebele. Therefore you respondents
are kindly requested to cooperate for the success of the study by giving the desirable information.
Thanks in advance for your coordination and honest.
1. Gender A, male B, female
2. Age ---------------------------------------
3. Are you literate? A, yes B, no
4. If your answers for question number three is A, what is your level of education?
A, grade 1-4
B, grade 5-8
C, grade 9-10
D, more than grade 10
5. Do you use fertilizer? A, yes B, no
6. If your answer for question number 5 is A, how much kilogram do you use?
---------------------
7. How many labor forces do you have in your family size? --------------------------------------
8. What is the number of oxen per day used to produce wheat? ----------------------------
9. Do you have donkey? A, yes B, no

10. Do you use herbicide A, yes B, no

11. Do you use compost A, yes B, no

12. What is the nature of your land fertility A, fertile B, non-fertile

13. Healthy status A, healthy B, unhealthy

14. How much amount of farm land use to produce wheat? ---------------------------------
15. Do you use improved seed A, yes B, no
 16. If your answer for question number 13 is A, how much kilo gram do you use?
----------------------
17. Do you use credit facility A, yes B, no
18. How much quintal of wheat did you receive in previous year? ----------------
19. For what purpose do you the farm output?
A, for consumption purpose
B, for market purpose
C, for both consumption and market purpose

20. What are the challenges of wheat production?

A, bad weather
B, low education level

C, smallness of farm size

D, lack of experience

E, lack of access to fertilizer

F, if others mention --------------------------------

21. What do you think the way to solve those problems and increase wheat

production? --------

A, providing additional farm land

B, providing sufficient accesses to credit

C, getting training

D, providing sufficient fertilizer

E, if others mention ---------------------