ADOPTION OF IMPROVED WHEAT VARIETIES AND ITS IMPACT

ON FARM INCOME OF SMALLHOLDER WHEAT PRODUCERS IN

GOLOLCHA DISTRICT OF BALE ZONE

MSC. THESIS

NASIR ABDA AMAN

JUNE 2019
HARAMAYA UNIVERSITY, HARAMAYA
Adoption of Improved Wheat Varieties and Its Impact on Farm Income of
Smallholder Wheat Producers in Gololcha District of Bale Zone

A Thesis Submitted to the Department of Rural Development and

Agricultural Extension, Postgraduate Program Directorate
HARAMAYA UNIVERSITY

In Partial Fulfillment of the Requirements for the Degree of MASTER OF

SCIENCE IN RURAL DEVELOPMENT ANDAGRICULTURAL
EXTENSION (RURAL DEVELOPMENT)

Nasir Abda

June 2019
Haramaya University, Haramaya

ii
 HARAMAYA UNIVERISTY
POSTGRADUATE PROGRAM DIRECTORATE
I hereby certify that I have read and evaluated this Thesis entitled “Adoption of Improved
Wheat Varieties and Its Impact on Farm Income of SmallholderWheat Producers in
Gololcha District of Bale Zone” prepared under my guidance by Nasir Abda Aman. I
recommend that it be submitted as fulfilling the thesis requirement.

Eric Ndemo (PhD) ____________________ ________________

Major Advisor Signature Date

Tesfaye Lemma (PhD) ____________________ ________________

Co-Advisor Signature Date

As the member of the Board of Examiners of the M.Sc. Thesis Open Defense Examination,
I certify that I have read and evaluated the Thesis prepared by Nasir Abda Aman and
examined the candidate. I recommend that the thesis be accepted as fulfilling the Thesis
requirements for the degree of Master of Science in Rural Development.

___________________________ _________________ _______________

Chairperson Signature Date
___________________________ ___________________ _____________
Internal Examiner Signature Date
___________________________ ____________________ _____________
External Examiner Signature Date

Final approval and acceptance of the Thesis is contingent upon the submission of its final
copy to the Council of Graduate Studies (CGS) through the candidate’s department or
School graduate committee (DGC or SGC).

iii
 DEDICATION

I dedicate this Thesis manuscript to my Mother Amina Beker who passed away without
seeing my achievements and to my father Abda Aman for nursing me with affection, love
and dedicated parentship in the success of my life.

iv
 STATEMENT OF THE AUTHOR

By my signature below, I declare and affirm that this Thesis is my own work. I have followed
all ethical and technical principles of scholarship in the preparation, data collection, data
analysis and compilation of the Thesis. Any scholarly matter that is included in the thesis has
been given recognition through citation.

This thesis is submitted in partial fulfillment of the requirements for MSc degree in Rural
Development at Haramaya University. The Thesis is deposited in the Haramaya University
Library and is made available to borrowers under the rules of the library. I solemnly declare
that this Thesis has not been submitted to any other institution anywhere for the award of any
academic degree, diploma or certificate.

Brief quotations from this Thesis may be made without special permission provided that
accurate and complete acknowledgment of the source is made. Requests for permission for
extended quotation from or reproduction of this Thesis in whole or in part may be granted by
the head of the school or department when in his or her judgment the proposed use of the
material is in the interests of scholarship. In all other instances, however, permission must be
obtained from the author of the Thesis.

Name: Nasir Abda Aman Signature: _____________

Date: June 1, 2019
School/Department: Rural Developmentand Agricultural Extension
Place: Haramaya University, Haramaya

v
 BIOGRAPHICAL SKETCH

The author was born on January 5, 1992 in Ataba Kebele, Gololcha district of Bale Zone
Oromia Regional State. He attended his Elementary education at Ataba Elementary School
and attended his secondary education at Jara Secondary and Preparatory School. After
successful completion of his preparatory school, he joined Haramaya University in 2013 and
graduated with Bachelor of Science Degree in Rural Development and Agricultural Extension
in July 2015. Since his graduation, he has served in Haramaya University as Graduate
Assistant for a year. Then, he rejoined Haramaya University in September 2016 to pursue his
MSc degree in Rural Development in regular program.

vi
 ACKNOWLEDGEMENT

First, I thank the almighty Allah for everything he has done to finalize my MSc study. Then I
would like to express my sincere and heartfelt thanks to my advisors Dr. Eric Ndemo and
Dr.Tesfaye Lemma for their intensive guidance, constructive comments and insights starting
from proposal development to the completion of the research work. Their inspiration and
willingness to share knowledge as well as appropriate material to strengthen the study was
unforgettable.

Special thanks also go to Haramaya University for sponsoring my educational expense and
research funds as well as for its coordination and facilitation of the study. I extend my
profound appreciation to Gololcha District Office of Agriculture and Rural Development for
giving me important information. Similarly, I thank the farmers of Gololcha district
particularly wheat producers for their hospitality who willingly participated in the survey and
spent many hours in giving me required information. I also would like to thank all of the
enumerators who assisted me in data collection with patience, commitment and dedication.
My last but not least gratitude goes to my families for their due care for me from childhood up
to now. I also extend my love and affection to my wife for her treatment and lonely time she
experienced during my absence for education and research work.

vii
 ABBREVIATIONS AND ACRONYMS

AE Adult Equivalent
ATA Ethiopian Agricultural Transformation Agency
BZADO Bale Zone Agricultural Development Office
CC Contingency Coefficient
CIMMYT International Maize and Wheat Improvement Center
EIAR Ethiopian Institute of Agricultural Research
CSA Central Statistical Authority
ETB Ethiopian Birr
FAO Food and Agriculture Organization
FGD Focus Group Discussion
GDP Gross Domestic Product
GO Governmental Organization
Ha Hectare
HYVs High Yielding Varieties
GDOA Gololch District Office of Agriculture
LDCs Least Developed Countries
NGO Non-Governmental Organization
PPS Probability Proportional to Size
SD Standard Deviation
SSA Sub-Saharan Africa
TLU Tropical Livestock Unit
VIF Variance Inflation Factor

viii
 TABLE OF CONTENTS

STATEMENT OF THE AUTHOR v

BIOGRAPHICAL SKETCH vi
ACKNOWLEDGEMENT vii
ABBREVIATIONS AND ACRONYMS viii
TABLE OF CONTENTS ix
LIST OF TABLES xi
LIST OF FIGURES xii
LIST OF APPENDIX TABLES xiii
LIST OF APPENDIX FIGURES xiv
ABSTRACT xv
1. INTRODUCTION 1
1.1. Background of the Study 1
1.2. Statement of the Problems 3
1.3. Objectives of the Study 5
1.3.1. General objective 5
1.3.2. Specific objectives 5
1.4. Research Questions 5
1.5. Significance of the Study 5
1.6. Scope and Limitation of the Study 6
1.7. Organizations of the Thesis 6
2. LITERATURE REVIEW 8
2.1. Theoretical Perspectives of Adoption 8
2.2. Approaches to Adoption of Agricultural Technologies 9
2.3. Crop Technology Adoption among Smallholder Farmers in Ethiopia 10
2.4. Wheat Production Trend in Ethiopia 12
2.5. Concepts of Impact Evaluation 13
2.6. Empirical Studies on Adoption 17
2.6.1. Demographic characteristics 17
2. 6.2. Socio-economic characteristics 18
2. 6.3. Institutional characteristics 20
2. 6.4. Psychological characteristics 22
2.7. Empirical Studies on Impact of Adoption 22
2.8. Analytical Framework of Adoption 24
2.9. Conceptual Framework of the Study 25
3. RESEARCH METHODOLOGY 26
3.1. Description of the Study Area 26
3.2. Sample Size and Sampling Procedure 28
3.3. Data types, Sources and Method of Data Collection 28
3.4. Method of Data Analysis 30
3.4.1. Descriptive statistics 30
3.4.2. Econometric analysis 31
3.5. Variables Definition, Measurement and Hypothesis 33

ix
 TABLE OF CONTENTS (Continoued)

3.5.1. Dependent variables 33

3.5.2. Outcome variable 33
3.5.3. Explanatory variables 33
4. RESULTS AND DISCUSSION 39
4.1. Descriptive Results 39
4.1.1. Demographic characteristics of the sampled household 39
4.1.2. Socio-economic characteristics of the sampled households 40
4.1.3. Institutional characteristics of households 41
4.1.4. Farmers’ perception on improved wheat varieties attributes 43
4.2. Adoption of Improved Wheat Varieties 45
4.2.1. Reasons for the preferred improved wheat varieties 46
4.3. Wheat Production Constraints in the Study Area 47
4.4. Econometric Model Result 48
4.5. Impact of Adoption of Improved Wheat Varieties on Farm Income 54
4.5.1. Matching adopters and non-adopters 55
4.5.2. Choice of matching algorithm 56
4.5.3. Treatment effect on the treated (ATT) 58
4.5.4. Sensitivity analysis of the estimated ATT 58
5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 60
5.1. Summary and Conclusions 60
5.2. Recommendations 61
6. REFERENCES 65
7. APPENDICES 75

x
 LIST OF TABLES

Table Page
1.Distribution of sample households in the sample kebeles by PPS 28
2.Summary of description of variables and expected effect 38
3.Demographic characteristics of sample households 40
4.Socioeconomic characteristics of sample households 41
5.Institutional characteristics of sample households 43
6.Perception of sample respondents about improved wheat varieties attributes 45
7.Improved wheat varieties adopted by smallholder farmers 46
8.Rank of the adopted improved wheat varieties based on farmers’ selection criteria 46
9.Constraints of improved wheat varieties production 47
10.Pair wise ranking challenges of wheat production in the study area 48
11.Estimated results of probit model likelihood of adoption of improved wheat varieties 54
12.Distribution of estimated propensity scores for sample households 55
13.Performance of matching estimators 56
14.Propensity score and covariate balance 57
15.Tests for the joint significance 57
16.Treatment effect on HH income (ETB) 58
17.Sensitivity analysis of the estimated ATT 59

xi
 LIST OF FIGURES

Figure Page
1.Conceptual framework of the study 25
2.Geographical location of Gololcha district 27

xii
 LIST OF APPENDIX TABLES

Appendix Table Page

1.Variance of inflation factor (VIF) for continuous variable 76

2.Contingency coefficient test for dummy variables 76
3.Conversion factor of number of household members in to adult equivalent 76
4.Conversion factor used to estimate tropical livestock unit (TLU) 77
5.Reasons why households not received credit 77
6.Yield capacity of different improved wheat varieties in the study 77

xiii
 LIST OF APPENDIX FIGURES

Appendix Figure Page

1.Seed colours of some improved wheat varieties 78
2.Kernel density of propensity score distribution for sample households 78

xiv
 Adoption of Improved Wheat Varieties and Its Impact on Farm Income of
Smallholder Wheat Producers in Gololcha District of Bale Zone
ABSTRACT

The objective of this study was to analyze the factors influencing farmer’s decision in adoption
of improved wheat varieties and estimate the impact of adoption on farm income in Gololcha
district of Bale zone. The study used cross-sectional data collected from a sample of 202 farm
households selected through multistage random sampling procedures following probability
proportional to sample size technique. Both qualitative and quantitative data obtained from
primary and secondary sources were used. The primary data were collected from randomly
selected respondents, focus group discussants and key informant interviewees whereas
secondary data were collected from Gololcha district office of agriculture. Data were
analyzed by descriptive statistics and econometric models as well as qualitative data analysis
techniques such as narration and quotation. The survey result showed 91(45%) sample
household heads were adopters of improved wheat varieties in 2018/19 production year.
Based on the nature of data, probit model was used to identify factors affecting farmer’s
adoption decision in improved wheat varieties. The probit model result showed that sex of
household head, land holding size, livestock holding size, access to credit, access to market
information, frequency of extension contacts, educational level of household head,
membership in cooperatives and perception on yield capacity significantly and positively
influenced adoption decision of improved wheat varieties. Propensity score matching (PSM)
model was also employed to evaluate the impact of adoption of improved wheat varieties on
farm income. The result of the PSM estimation showed that adoption of improved wheat
varieties has significant impact on farm income of adopter households by earning 24.12 %
increase in annual farm income as compared to the non-adopter. Based on the findings of this
study it can be concluded that policy and development interventions should give emphasis
towards improvement of such economical and institutional support system so as to achieve
wider adoption of improved wheat varieties, increased production and productivity of
smallholder farmer. For instance, the positive significant effect of variables such as access to
credit, access to market information and frequency of extension contacts on adoption of
improved wheat varieties implies the need of intervention that can strength rural credit crevice
provision, increasing frequency of extension visits and provision of reliable and timely market
information to enhance farmers’ adoption decision in improved wheat varieties. The positive
and significant influence of perception on adoption also suggests the need of considering the
attributes farmers use when choosing varieties to enhance farmers’ adoption of improved
wheat varieties.

Key words: Adoption, improved wheat varieties, Impact, Smallholder, Binary probit

xv
 1. INTRODUCTION

1.1. Background of the Study

In many developing countries including Ethiopia, agriculture plays a vibrant role in promoting
economic growth and development. The importance of agriculture in Ethiopia is evidenced by
its share on GDP (43%), employment generation (80%), share of export (70%) and providing
about 70% raw material for the industries in the country (CSA, 2016). Furthermore, 90% of
the poor earn their livelihood from this sector. Despite such importance of the agricultural
sector for the overall achievements of the country, the production and productivity of the
sector over the last two decades is constrained by lack of appropriate and affordable
agricultural technologies, inefficiency in production, poor infrastructure, inefficient marketing
systems, land degradation, rapidly expanding population, and inaccessibility to agricultural
inputs and climate change (FAOSTAT, 2018).

Consequently, agricultural experts, policy makers, and agricultural research centers and many
others linked to the sector have made relentless efforts to bring about change in agricultural
production system of the peasant farmer through promoting improved agricultural
technologies like the use of fertilizers, high yielding seeds, pesticides, and other management
practices in relation to crops which seem better in yield (Sisay, 2016). But the adoption of
these precious technologies by smallholder farmers in the country is very low compared to the
efforts made by the government and the other stakeholders linked to the sector, suggesting the
importance of further investigations to understand the determinants of farmer’s adoption
decision.

Wheat (Triticuma estivum L) is one of the world’s leading cereal grains serving as a staple
food for more than one third of the global population. Globally, it is cultivated on
approximately 218 million hectares of land. Accounting for a fifth of humanity’s food, wheat
is second only to rice as a source of calories in the diets of consumers in the developing
countries. Wheat is an especially critical “stuff of life” for approximately 1.2 billion “wheat
dependent” and 2.5 billion “wheat consuming” poor men, women and children who live on
less than USD 2 per day; and for approximately 30 million poor wheat producers and their
families (CIMMYT, 2012).
 2

Ethiopia is the largest wheat producer in sub-Saharan Africa by cultivating wheat on over 1.70
million hectares of land, accounting for 13.33% of the total grain crop area, with an annual
production of 4.54 million tons, contributing about 15.81% of the total grain production (ATA,
2017, FAOSTAT, 2018). In terms of area of production, wheat ranks fourth after teff
(Eragrostistef Zucc.), maize (Zea mays L.) and Sorghum (Sorghum bicolor L.) and in total
grain production, wheat ranks third after teff and maize in the country (CSA, 2017).

Wheat has been recognised as a strategic food security crop in the country’s attempt to bridge
the persistent food gap. Cognizant of its importance, the government of Ethiopia has been
investing heavily in the development and dissemination of improved wheat technologies over
the past 20 years. Accordingly a number of wheat technologies were developed and promoted
for smallholder farmers in different agro-ecological zones of the country. Despite such
extensive intervention, farmer’s adoption of improved wheat technology is still low,
suggesting the country has not fully taped the benefits of investment made on wheat
technology generation and dissemination efforts (ATA, 2017). This may be a lesson for
technology development and distributing organizations about why farmers are lagged behind
in the use of improved wheat varieties particularly in rural areas where there is food insecurity
and poverty problems.

Large econometric literature (Kassie et al., 2011; Shiferaw et al., 2012) find high poverty
reduction elasticities for agricultural productivity growth, through generating high incomes for
farmer, reducing food price, and generating more tax1revenues. For instance, in Africa each
dollar investment in the sector has a multiplier effect ranging from 1.5 to 2.7% (FAO, 2014),
in sub Saharan Africa, the contribution of agriculture to poverty reduction was estimated to be
4.25 times the contribution of equivalent investment in the service sector (Christiaensen et al.,
2011), and every 1% increase in wheat productivity reduced the extent of poverty by 0.5-1.0
%, which the same holds in Ethiopia (World Bank, 2015). Cognizant, agricultural
technological improvements are crucial to increase agricultural productivity and thereby
reduce poverty and meet food demand without degradation of the agro-ecosystems (Kassie et
al., 2011; Asfaw et al., 2012).
 3

1.2. Statement of the Problems

In Ethiopia where there is a critical relationship between crop successes, regional food security
and human survival, good and effective strategies towards keeping the wellbeing of crop
should be developed and executed. Population growth increases at an increasing rate,
consumption and demand for agricultural products also increases in general, particularly
demand for wheat product increases, as the crop is demanded by industries and consumed
largely in traditional way (CSA, 2017). If Population growth continues at double to the growth
of wheat production, there will likely be serious difficulties in maintaining wheat food supply
for future generations (CIMMYT, 2012). To feed this increasing population, increasing the
production and productivity of wheat through adoption of improved agricultural technology
and keeping the wellbeing of the sector is a sole alternative.

With this understanding, a number of improved wheat varieties and the recommended
agronomic practices have been introduced to the smallholder farmers of the country over the
last 20 years (Kebede et al., 2017). Over the last decades, International Maize and Wheat
Improvement Center (CIMMYT) has been collaborating with Ethiopian Institute of
Agricultural Research (EIAR) in the development and dissemination of 44 improved wheat
varieties with associated technological packages, however, the adoption of these technologies
is low (Asrat et al.,2015) and have not been analyzed systematically (Shiferaw et al., 2014)

In spite of the wheat technology generation and dissemination efforts; many technology
adoption studies in Ethiopia emerging in cereal crops sector in general and wheat technology
in particular revealed that the gain from adoption is not satisfactory compared to the
expectations and the potentials the country has. For instance, according to Taffes et al. (2017),
at national level the percentage of improved wheat varieties use in Ethiopia is 4.7 percent. This
indicates that improved wheat varieties use is low and the majority of farm households
produce wheat through local seeds, and hence local seed remains the dominant system. Hence
further investigation on factors impeding these are suggested (Jaleta et al., 2016; Beshir, 2016;
Biftu and Diriba, 2016; Hagos, 2016).

Efforts have been also underway by the national agricultural research system since its
establishment in 1956 and a number of technologies have been released for the farming
 4

community. In spite of these efforts, productivity gains are not as such adequate in the
country. In 2012, for instance, Ethiopia’s wheat yield was 29% below the Kenyan average,
13% below the African average, and 32% below the world average yield which is 40 quintals
per hectare (FAO, 2014). Low level of adoption of improved wheat is among the major factors
contributing to low productivity in the country (Ahmed et al., 2014); As a result of low crop
production, low household farm income remained to be endemic problems in the country
(Yitbarek, 2017).

To improve production and productivity of smallholder farmers and meet GTP goals, the
government of Ethiopia is also doing its best by complementing the existing technologies with
new technologies (improved wheat varieties). Despite this fact, the introduced improved wheat
varieties were not widely accepted as expected in different parts of Ethiopia (Shiferaw et al.,
2014; Jaleta et al., 2015). Essentially, the observed failure of farmers to adopt improved wheat
varieties and fully put into practice could be attributed to various factors which appeared to
have some bearing on the farmers' decision to adopt the technologies.

The other limitation in many previous adoption studies in the country was lack of adoption
impact evaluation effort on the livelihoods of adopters in general and farm income in
particular. Even though there are several previous studies conducted on determinants of wheat
technology adoption in the country (Jaleta et al., 2016; Kebede et al., 2017), there is
insufficient literature on impact of adoption of improved wheat varieties on farm income in
Ethiopia and recognizing the gaps in empirical investigations, scarcity of evidence of impact
of adoption of improved wheat varieties on farm income on the importance, evaluating the
impact of adoption of improved wheat varieties on farm income of smallholder farmers is
imperative to bridge the existing information gap (Zenaye, 2016 and Yitbarek, 2017).

Moreover, adoption decision of improved wheat varieties by smallholder farmers is influenced

by different demographic, socioeconomic, institutional and psychological factors differently in
different areas. This indicates that, in order to identify the influence of different factors in
different areas; location and crop specific research should be conducted. In the Gololcha
district such research has not been conducted and identifying factors affecting adoption of
improved varieties in the study area is important since it is one of the major crops grown in the
area both for home consumption and generating income. Therefore, this study was proposed to
 5

identify the factors influencing farmer’s decision in adoption of improved wheat varieties and
estimate the impact of improved wheat varieties adoption on the farm income of wheat
producers to fill the existing information gap in the study area.

1.3. Objectives of the Study

1.3.1. General objective

The general objective of the study was to identify the factors influencing adoption of improved
wheat varieties by smallholder wheat producers and evaluate the impact of adoption on their
farm income in Gololcha district, Bale Zone.

1.3.2. Specific objectives

The specific objectives of the study are:

1. To assess the current status of adoption of improved wheat varieties by smallholder wheat
producers in the study area.
2. To identify factors influencing the adoption of improved wheat varieties by smallholder
wheat producers in the study area.
3. To evaluate the impact of adoption of improved wheat varieties on farm income of
smallholder wheat producers in the study area

1.4. Research Questions

This study tried to answer the following research questions:

 What farmers’ adoption status in improved wheat variety looks like in the study area?
 Why some farmers adopted improved wheat varieties and others not?
 Is there a significant difference in farm income between adopters and non- adopters of
improved wheat varieties?

1.5. Significance of the Study

Dealing on adoption of agricultural technology from farmers’ livelihood perspective has a

significance to draw the clear picture for policy makers involved in development and
 6

dissemination of new technologies. A study of smallholder wheat adoption is vital because it

could provide information on factors affecting adoption of this highly demanded crop. Hence,
the finding of this study generated valuable information for policy makers’ and woreda level
concerned body to formulate appropriate strategy to overcome the existing factors affecting
improved wheat varieties adoption in the study area. This would enable farmers to adopt as
well as produce high marketable surplus and quality wheat product to the market so as to
improve their farm income and food security status. Furthermore, the study would give insight
to researchers who will be interested in the topic to conduct further investigations of the
problems in the study area

1.6. Scope and Limitation of the Study

The research was conducted in Bale Zone, Gololcha District in 2018/2019 to assess the status
of improved wheat varieties adoption, factors affecting farmer’s adoption decision in
improved wheat varieties and adoption impact on farm income .Despite farmers in Gololcha
district cultivate different crops, and this study was confined on assessing determinants of
improved wheat varieties adoption. There may be various factors affecting smallholder
farmer’s improved wheat varieties adoption, but the depth of this study was limited to
household level factors (demographic, socioeconomic, institutional and psychological factors).
Moreover, Technology adoption may not have single effect like income or food security
effect; instead, it may stretch to other livelihood aspects of famers, but this study was limited
to the direct impact of improved wheat varieties adoption on farm income. In terms of
Geography and population coverage, the study only targeted 202 smallholder households from
a single selected woreda and 4 wheat producing kebeles. Thus, this study might lack the ability
to represent the status of smallholder farmer’s improved wheat varieties adoption at zonal,
regional and national level. Because of time and budget constraint, the study was limited to
use cross-sectional data of 2018/19 production year which could be better explained with
panel data.

1.7. Organizations of the Thesis

This thesis contains five chapters. The first chapter basically introduces the background, the
statement of the problem, objectives, significance and limitations of the study. The second
 7

chapter presents review of literature where relevant materials related with the present study are
explored. The third chapter devoted to research methodology. Chapter four contains the
presentations and discussions of the findings of this study. The fifth chapter summarizes and
concludes the findings, and reflects some recommendations.
 8

2. LITERATURE REVIEW

2.1. Theoretical Perspectives of Adoption

Many authors have defined the term adoption at different times. Rogers (1983) defined
adoption as the process by which a technology is communicated through certain channels
overtime among the members of a social system. Rogers (2003) defined adoption as the
mental process through which an individual passes from first hearing about an innovation to
final adoption. With regard to this idea, adoption process includes five stages; such as
awareness, interest, evaluation, trial and adoption. (i) Awareness: A person first learns about
a new idea, product or practice. He/ she have only general knowledge about it and know
nothing of its special qualities or its usefulness; (ii) Interest: At this stage the person is not
satisfied with just knowing that the ideas exist. He/ she want more detailed information about
what it’s, what it will do and how it will work; (iii) Evaluation: He/ she evaluate all the
information he/ she have and decide whether the new idea is good for him/ her; (iv) Trial:
Once he/ she decide that he/ she like the idea, he/ she will give it a trial. This may be for a
long period of time or on a limited scale; and (V) Adoption: This is the stage where he/ she
firmly adopts the idea and then may even encourage others to do so.

As of Feder et al. (1985) adoption is classified into individual and aggregate adoption
according to its coverage. Individual adoption refers to the farmer’s decisions to incorporate a
new technology into the production process. Aggregate adoption is the process of diffusion of
a new technology within a region or population. It is a complex process, which is governed by
many socio-economic factors. The farmers socio-psychological system and their degree of
readiness and exposure to improved practices and ideas i.e. changes like the awareness and
perception of farmers towards improved agricultural technologies and the institutional factors
which act as incentives/disincentives to agricultural practices and the farmers’ resource
endowment like the land holding size and labor are some of the factors of considerable
importance in adoption studies.

Concerning the modes of adoption of agricultural technology, there are two approaches in the
literature. The first approach emphasis the adoption of the whole packages and the second one
stresses the sequential or stepwise adoption of components of a package. The former approach
 9

is often advocated by technical scientists while the later is advanced by participatory research
groups (Rogers ,2003)).

The measurement of adoption of a given technology depends on whether the technology is

divisible or not. If a technology is divisible, its adoption can be measured at the individual
level in a given period of time by the share of the farm area under the new technology or by
the per hectare quantity of input used in relation to the resource recommendation (Feder et al.,
1985). In the case of non divisible agricultural technologies, the extent of adoption at the farm
level at a given period of time is dichotomous i.e. adoption and non-adoption. Thus, aggregate
adoption of non-divisible technologies can be measured by calculating the percentage of
farmers using the new technology within a given area. Further, if the technology is divisible
like fertilizer herbicides, HYVs, Pesticides and the likes, the farmers are able to try out the
innovation on a small scale and will be willing to adopt but if it is non divisible, small scale
trials are not possible and the farmer may be more reluctant to adopt.

2.2. Approaches to Adoption of Agricultural Technologies

Adoption of technological innovations by farmers in developing countries has attracted

considerable attention among development economists. This is because the majorities of less
developed countries’ population derive their livelihood from agricultural production. The
literature on issues related to adoption of improved agricultural technologies in developing
countries is voluminous and conventionally, the literature falls into three broad categories
(Feder et al., 1982).

Innovation-diffusion model: The first category brings together the literature on what is
referred as the innovation-diffusion theory. This theory assumes that the technology
introduced to farmers is appropriate in its given form and that what determines the adoption
decision is the effectiveness of communication to the targeted users (farmers). Communication
to the targeted user is achieved through extension, media, opinion leaders, on-farm or on-
station demonstration, farmers’ fields, training (Feder et al., 1985). This theory revolves on
source-communication-user model. The theory has been criticized for prescribing a top-bottom
approach.
 10

Resource constraint model: The second category of literature is concerned with the level of
resource endowment as it impacts on adoption behavior. This category assumes that the
technology being introduced to farmers is appropriate in its given form and what mainly
determines adoption decision is the farmer’s level of resource endowment (Rogers, 1982).
Effects of factors such as farm size and liquidity constraint on decisions to adopt or not to
adopt new technologies have been variously examined under this model. The resource
constraint model assumes only farmers’ resource level is important in adoption decision.

Adopter-perception model: The third category of adoption literature is referred to as adopter

perception model. This focuses on whether technology-specific attributes are satisfactory to
the farmer and on the understanding of the degree to which the attributes encourage or
discourage adoption decisions. The adopter perception model assumes that farmer’s perception
of a technology’s attributes and farmer’s socio-economic circumstances have an influence on
adoption behavior (Duvel et al., 1991). The degree to which technology/idea is considered
superior to others and the degree to which an innovation is seen as consistent with the existing
values, past experiences and the needs of the recipients are among the major critical factors
determining farmer’s adoption behavior (Rogers, 1983). He further argued that, apart from the
characteristics of an innovation, characteristics of an adopter and his/her environment or
situation are equally important in determining farmer’s adoption behavior and he further
contends that by virtually ignoring technology-specific attributes and how farmers evaluate the
appropriateness of the technologies, has omitted major sets of critical factors determining
farmer’s adoption behavior. The current study used a combination of the three models.

2.3. Crop Technology Adoption among Smallholder Farmers in Ethiopia

In view of providing a historical perspective of the agricultural technology use among

smallholder farmers in line with the evolution of agricultural research and technology transfer
efforts, the literature identified three time periods including the period prior to 1990, the
period from 1990 to 2010 and the years since 2010 to date.

The first technology adoption studies, in Ethiopia, were conducted in the 1980s with the
objective of assessing the successes of the Comprehensive Integrated Rural Development
Projects and the Minimum Package Program. Agricultural technology assessments prior to
 11

1990 were few in number, focused on documenting the efforts and lessons learned from the
Comprehensive Integrated Rural Development Projects and the Minimum Package Programs
(Tecle, 1975; Aklilu, 1977; Waktola, 1980). These early studies focused on the adoption of
commercial fertilizers and to a lesser extent on the use of improved crop varieties. Most of the
early adoption studies reported rather low awareness of improved technologies. Also, the
studies reported limited adoption of improved varieties and chemical fertilizers among
smallholder farmers who claimed to have knowledge of the technologies promoted. Weak
research-extension linkage was singled out as a major bottleneck for the low awareness and
use of improved agricultural technologies. Besides, timely unavailability of complementary
inputs (mainly inorganic fertilizers and herbicides) and low grain prices contributed to
observed dismal use of agricultural technologies among smallholder farmers. Consequently,
various initiatives were tried to strengthen the research-extension-farmer linkage that would
help bridge the gap.

The period between 1990 and 2010 marked the propagation of technology adoption studies
following the intensified crop technology dissemination efforts by specialized Projects such as
SG 2000, outreach activities of NARS and the national extension system (Alene et al., 2000;
Abdissa et al., 2001; Habtermariam, 2004; Binod Kafle, 2010; Motuma, et.al, 2010). Most of
the studies during this period were highly location specific, pertain to few crops and conducted
with the intent of demonstrating project impact. Almost all of the crop technology adoption
studies conducted in Ethiopia up to 2010 primarily aimed at assessing project success were
largely conducted either on pilot research and extension sites or in selected high potential but
pocket areas where intensive project efforts had been conducted. These studies focused on
relatively few crops (largely wheat and maize) and limited component technologies (improved
seeds and inorganic fertilizers).

Technology adoption studies conducted since 2010 to date, however, have a national focus
largely based on nationally representative samples and focus on broad range of crops (Chilot
et al., 2013; Yigezu et al., 2015; Chilot et al., 2016a; Chilot et al., 2016b) .Realizing the
drawbacks of the previous crop related technology adoption studies and prompted by recent
intensified technology transfer efforts, the Ethiopian Institute of Agricultural Research (EIAR)
partnering with several international agricultural research Centers conducted adoption studies
 12

at national level focusing on three cereals crops (maize, wheat and barley), three cool season
legumes (lentil, chickpea and faba bean) and one root crop (potato)under the auspice of the
Project “diffusion of improved varieties in Africa (DIVA).

2.4. Wheat Production Trend in Ethiopia

Wheat is one of Ethiopia’s most important cereal crops in terms of the area of land allocated,
volume produced and the number of farmers engaged in its production. Wheat ranks fourth in
area coverage next to maize, tef and sorghum. About 4.99 million small scale farmers produce
4.54 million tons of wheat across 1.70 million hectares of land with average productivity of
2.67 tons/ha (CSA, 2017). It is largely grown in the mid and highland areas of Ethiopia
spanning at altitudes of 1500 to 3000 m above sea level. However, it is mainly grown between
1800 to 2500 m.a.s.l in the country (ATA, 2017).

Wheat account to 16 percent sources of calories to the population of the country (FAO, 2015).
In the past two decade, wheat production and consumption have both increased in the country
due to technology improvement, change in habit of food consumption and spread out of
urbanization. Although, wheat Production increased from around 1.1 million tons in 1995/96
to 3.9 million tons in 2013/14, which is an average annual growth of 7.5 percent, Wheat
consumption increased from 2.1 million tons to 4.2 million tons, representing an annual
increase of about 4.2 percent between 1995/96 and 2013/14. The country produces wheat crop
within the framework of self-sufficiency and import substitution (CSA, 2017 and Samuel et
al., 2017).

The study area, Bale zone was nationally ranked first in wheat productivity per area, 33.33
quintals/ha (CSA, 2017). Among the top 25 woredas in Ethiopia, 19 of them were located in
Arsi-Bale zone of Oromia region and this area known as “wheat belt’’ Arsi-Bale zone (Warner
et al., 2015). The highlands parts of Bale zone are highly productive and the livelihood of the
community living in the zone highly depends on wheat production

Despite importance of wheat in the livelihood of the society, the production of the crop is
surrounded by different challenges of production constraints like biotic and a biotic factor.
Among the biotic constraints, emerging wheat rust disease is the one devastating wheat
production and productivity in Ethiopia as stated in (Daniel et al., 2015). Wheat rust diseases
 13

have long been among the major biotic threats to wheat productivity. Ethiopia’s wheat stripe
rust epidemic is highly destructive crop disease that threatens national wheat production and is
spreading more rapidly due to climate change (ICARDA, 2011).

2.5. Concepts of Impact Evaluation

Programs might appear potentially promising before implementation yet fail to generate
expected impacts or benefits. The obvious need for impact evaluation is to help policy makers
decide whether programs are generating intended effects; to promote accountability in the
allocation of resources across public programs; and to fill gaps in understanding what works,
what does not, and how measured changes in well-being are attributable to a particular project
or policy intervention (Shahidur et al., 2010). Estimating the impact of the participation in this
case adoption of improved wheat technologies requires separating its effect from participating
factors, which may be correlated with the outcomes. This task of “netting out” the effect of the
program from other factors is facilitating if control groups are introduced. “Control group”
consists of a comparable group of individuals or households who did not involve in the
program, but have similar characteristics as those participating in the program, called the
“treatment group”. In theory, evaluators could follow three main methods in establishing
control and treatment groups: randomization/pure experimental design; non-experimental
design and quasi-experimental design.

Experimental method is randomized method, where the treatment and control samples are
randomly drawn from the same population. In other words, in a randomized experiment,
individuals are randomly placed into two groups, namely, those that involve in the program or
those that do not involve in the program. This allows the researcher to determine the
participation impact by comparing means of outcome variable for the two groups. In the
contrary, non-experimental approach is used in cases where program placement is
intentionally located (Shahidur et al., 2010). Non-experimental methods are frequently used in
practice either because program administrators are not too keen to randomly exclude certain
parts of the population from an intervention or because a randomized approach is out of
context for a rapid-action project with no times to conduct an experiment.
 14

A quasi-experimental method is the only alternative when neither a baseline survey nor
randomizations are feasible options (Ravallion, 2005). The main benefit of quasi-experimental
designs are that they can draw on existing data sources and are thus often quicker and cheaper
to implement and they can be performed after a project has been implemented, given sufficient
existing data. The principal disadvantages of quasi-experimental techniques are that the
reliability of the results is often reduced as the methodology is less robust statistically; the
methods can be statistically complex and data demanding; and there is a problem of selection
bias.

Propensity score matching (PSM) is one of the quasi-experimental methods, which

constructs a statistical comparison group that is based on a model of the probability of
participating in the treatment, using observed characteristics. Participants are then matched on
the basis of this probability, or propensity score, to non participants. The average treatment
effect of the program is then calculated as the mean difference in outcomes across these two
groups. The validity of PSM depends on two conditions: (a) conditional independence
(namely, that unobserved factors do not affect participation) and (b) sizable common support
or overlap in propensity scores across the participant and non participant samples. Different
approaches are used to match participants and non-participants on the basis of the propensity
score. These include nearest neighbor (NN) matching, caliper and radius matching,
stratification and interval matching and kernel matching (Bernard et al., 2010).

Nearest-neighbor matching (NN): it the most straightforward matching estimator. In NN

matching an individual from a comparison group is chosen as a matching partner for a treated
individual who is closest in terms of propensity score (Caliendo and Kopeinig, 2005). NN
matching can be done with or without replacement options. In cases where the treatment and
comparison units are very different, finding a satisfactory match by matching without
replacement can be problematic. This means that by matching without replacement, when
there are few comparison units similar to the treated units, we may be forced to match treated
units to comparison units that are quite different in terms of the estimated propensity scores.
Usually, NN matching is applied with replacement in the sense that a control unit can be a best
match for more than treated unit (Becker and Ichino, 2002).
 15

Caliper matching: The above discussion explains that NN matching faces the risk of bad
matches, if the closest neighbor is far away. To overcome this problem researchers can apply
caliper matching, whereby an individual from the comparison group is chosen as a matching
partner for a treated individual who lies within a given caliper (propensity score range), and
who is closest in terms of propensity score (Caliendo and Kopeinig, 2005). If the dimension of
the neighborhood is set to be very small, it is possible that some treated units are not matched
since the neighborhood does not contain a control unit. On the other hand the smaller the size
of the neighborhood, the better the quality of the matches (Becker and Ichino, 2002). A
problem of caliper matching is that it is difficult to choose a priori a reasonable tolerance level.

Kernel matching: it is another matching method whereby all treated units are matched with a
weighted average of all controls, with weights which are inversely proportional to the distance
between the propensity scores of treated and control individuals (Becker and Ichino 2002).
Kernel matching weights the contribution of each comparison group member, so that more
importance can be attached to those comparators who provide a better match. The difference
from caliper matching, however, is that those who are included are weighted according to their
proximity with respect to the propensity score. According to Caliendo and Kopeinig (2005) a
drawback of Kernel matching is that possibly bad matches are used as the estimator, including
comparator observations for all treatment observations. Hence, the proper imposition of the
common support condition is of major importance for the kernel matching method.

Stratification: is a method that consists of dividing the range of variation of the propensity
score in intervals such that within each interval treated and control units have on average the
same propensity score. For practical purposes the same blocks identified by the algorithm that
estimates the propensity score can be used. Then, within each interval in which both treated
and control units are present, the difference between the average outcomes of the treated and
the controls is computed. The average treatment effect on treated (ATT) of interest is finally
obtained as an average of the ATT of each block with weights given by the distribution of
treated units across blocks. One of the pitfalls of the Stratification method is that it discards
observations in blocks where either treated or control units are absent matches (Becker and
Ichino, 2002).
 16

The question remains on how and which method to select. Clearly, there is no single answer to
this question. The choice of a given matching estimator depends on the nature of the available
data set. In other words, it should be clear that there is no `winner' for all situations and that
the choice of a matching estimator crucially depends on the situation at hand. The choice of a
specific method depends on the data in question, and in particular on the degree of overlap
between the treatment and comparison groups in terms of the propensity score. When there is
substantial overlap in the distribution of the propensity score between the comparison and
treatment groups, most of the matching algorithms yield similar results (Becker and Ichino
2002). Thus, depending on the selection criterion of algorithm quality, this study uses the
kernel matching estimator, because it has the advantage of weighing the contribution of each
comparison group member so that more importance can be attached to those comparators who
provide a better match (Caliendo and Kopeinig, 2005). It is also the most common approach
frequently used by various researchers, and this provides the opportunity to compare our study
results.

PSM is not without its potentially problematic assumptions and implementation challenges.
First, PSM requires large amounts of data both on the universe of variables that could
potentially confound the relationship between outcome and intervention, and on large numbers
of observations to maximize efficiency (Bernard et al., 2010). Second, related to the previous
point one can never be entirely sure that it has actually included all relevant covariates in the
first stage of the matching model and effectively satisfied the conditional independence
assumption (CIA). Furthermore, PSM is non-parametric: that does not make any functional
form assumptions regarding the average differences in the outcome. Moreover, unobservable
characteristics also affect the outcomes and PSM approach is unable to address this bias
(Ravallion, 2005).

Irrespective of its shortcomings, PSM model was employed to evaluate the impact of adoption
of improved wheat varieties (as a binary treatment variable) on the farm income of the
household because it is very appealing to evaluators with time constraints and working without
the baseline data that it can be used with a single cross-section of data. In this research
“treatment” implies participation in improved wheat varieties production/adopter and “impact”
 17

is meant for the change of farm income as an outcome indicator. On the other hand, “control”
stands for non-adopter/non-treated households will be used for comparison

2.6. Empirical Studies on Adoption

From the extensive review of the literature on technology adoption in developing countries, by
Feder et al. (1985), the various factors that influence technology adoption can be grouped into
the following four broad categories which are briefly explained below:

2.6.1. Demographic characteristics

Household’s personal and demographic variables are among the most common household
characteristics which are mostly associated with farmers' adoption behavior. In this study
variables sex, education, family size and farming experience of the household were reviewed.

Sex differentials are one of the most important factors influencing adoption of improved
agricultural technologies. Due to long lasted cultural and social grounds in many societies of
developing countries, women have less access to household resources and also have less
access to institutional services (Tsegaye and Bekele, 2012). Regarding the relationship of
household head sex with adoption of agricultural technologies, many previous studies reported
that household head sex has positive effect on adoption in favor of males (Berihun et al., 2014;
Hailu et al., 2014; Jaleta et al., 2016). The other study conducted by Regasa (2016) on
adoption of improved wheat varieties of smallholder farmers in Mao-Komo district of
Benishangul-Gumuz region revealed that household head sex was positively and significantly
associated with adoption of improved wheat varieties. Similar studies by Menale et al. (2012),
Solomon et al. (2014) and Tesfaye et al. (2014) also confirmed that as compared to male-
headed households, female-headed households were less likely to adopt technologies than
male-headed farmers due to their lower labor endowment, lower farm land holding and
livestock unit ownership, and less access to information on improved agricultural technologies
compared to their counterpart. Similarly, the study conducted by Kebede et al. (2017) on
determinants of adoption of improved wheat production package by smallholder farmers in
Eastern Ethiopia reported that sex of the household head was found positively influenced the
adoption of wheat technology. However, Bingxin and Alejandro (2014) found that female
 18

headed households were found to be more likely to use improved wheat varieties than male
headed households.

With regard to educational level of the household head there is a general agreement that
education is associated with adoption, because educational level of the household head is one
of the important indicators of human capital (Obayelu et al., 2017). Several studies have
reported that education level of the household head had positive and significant relationship
with adoption of improved agricultural technologies (Merga and Urgessa, 2014; Leake and
Adam, 2015). The other study conducted by Hassen et al. (2012) on determinants of fertilizer
technology adoption in north eastern highlands of Ethiopia has shown that the farmer’s
likelihood of adopting improved agricultural technologies increases with farmers’ formal
educational level. Similarly, Sisay (2016) reported positive relationship between educational
level of family members and adoption of improved agricultural technologies.

Farming experience is another important household related variable that has relationship with
adoption. Longer farming experience implies accumulated farming knowledge and skill which
has contribution for adoption (Yu and Nin-Pratt, 2014) The study conducted by Leake and
Adam (2015) on factors influencing allocation of land for improved wheat variety in Adwa
district reported positive relationship of household head wheat crop farming experience with
the adoption of improved wheat variety by smallholder farmers. Similar Studies conducted by
Assefa and Gezahegn (2010), Solomon et al.(2013) and Hassen et al.(2015) indicated positive
relationship of household head farming experience with farmers decision to adopt improved
agricultural technologies.

2. 6.2. Socio-economic characteristics

The various socio-economic factors that influence technology adoption are different in
different studies. From the extensive review of the literature on technology adoption variables
like farm size, livestock holding, and household’s labor availability were considered in this
study.

Farm size plays a critical role in adoption process of a new technology. The effect of farm size
on farmer’s adoption decision varies depending on the institutional setting of the community
and type of technology being introduced. Concerning farm size, different studies reported its
 19

effect differently. For example, studies by Assefa and Gezahegn (2010) and Kebede et al.
(2017) found a positive and significant effect of farm size on adoption of improved
agricultural technologies and the probable reasons for those studies were farmers with large
farm size are likely to adopt a new technology as they can afford to devote part of their land to
try new technology unlike those with less farm size. Having more farm land size is one best
option where by smallholders could be prompted in diversifying their crop production and
adopts all imperative yield increasing technologies (Abera, 2013). According to Regasa (2016)
farmers who have more cultivable land, were more likely to adopt agricultural technologies
particularly improved varieties. However, Tafese (2016) reported negative influences of large
farm size on adoption of improved technology especially in the case of an input-intensive
innovation.

Livestock holding is the other important factor found to have significant influence on the
household decision to adopt the available improved agricultural technologies. Tropical
livestock unit is a proxy for measuring wealth status of household head in rural areas (Girma,
2016). Concerning tropical livestock, different studies reported positive relationship between
livestock ownership and the probability adoption of improved agricultural technologies
(Hassen et al., 2015; Tafese, 2016). Similar studies conducted by Solomon et al.(2013) and
Sisay (2016) reported that farmers with large number of livestock are more likely to adopt the
technologies, indicating that farmers with relatively more livestock unit make use of their
income obtained from sale of livestock and their byproducts for the purchase of inputs (seed,
fertilizer, herbicide, etc.) whenever the need arises. This implies that being owner of more
livestock unit increase the probability of adoption of improved agricultural technologies.

Another important factor which affects adoption is family size which is the source of labor for
farm activities. The effect of labor on technology adoption differs depending on whether the
proposed technology is labor-saving or labor-intensive. Higher labor supply is associated with
higher rates of adoption of labor-intensive technology. Several studies have reported the
positive effect of household labor availability on adoption of improved agricultural
technologies. According to Tafese (2016) family size had significantly influenced the
probability of adopting row planting by farmers. The probable reason for this significant
positive effect of family size was that row planting is labor intensive and hence the household
 20

with relatively high family size uses the technologies on their farm plots better than others.
Similarly, the study conducted by Sisay (2016) revealed that the adoption of improved maize
variety and chemical fertilizer were positively influenced by the number of man equivalent
indicating that farmers with more family size are more likely to use improved maize variety
and chemical fertilizer than others. The possible explanation for this result is that maize is a
labor intensive crop, which requires more labor for using improved agricultural technologies
in maize fields. Similar studies by Leake and Adam (2015) and Moti et al. (2016) also
reported positive effect of household labor availability on adoption of agricultural technologies
by smallholder farmers.

2. 6.3. Institutional characteristics

Farmers make decisions within a broader environment or context (Liverpool and Winter-
Nelson, 2012). Institutional factors are part of such broader environment which affects
farmers’ adoption decision of agricultural technologies. Institutional factors in the context of
this study include support provided by various institutions and organizations to enhance the
use of improved technologies such as extension contact, access to market; credit services,
access to market information and cooperatives were among the most reviewed variables.

Extension provides farmers with information related to agricultural technologies. The

relationship between farmers’ access to extension services and adoption has been reported
repeatedly as positive and significant by many authors. The study conducted by Merga and
Urgessa (2014) on adoption and impact of agricultural technologies on farm income revealed
that significant relationship between access to extension and adoption of agricultural
technologies. It also indicated that the frequency of contacts farmers made with extension
workers was an important factor in discriminating the adopters from non-adopters (Biftu et al.,
2016). Similarly, the study conducted by Sisay (2016) reported that the adoption of improved
maize variety is strongly influenced by extension service. Farmers who have more frequency
of contacts with development agents could update themselves on the availability and arrival of
improved wheat varieties and aware of its application (Moti et al., 2016; and Yu and Nin-
Pratt, 2014). Similarly, Solomon et al. (2013), Leake and Adam (2015) also found that
frequency of contacts with extension agent has positively and significantly influenced the
adoption decision of smallholder farmers. Access to extension services helps to spread
 21

information about new agricultural technology leading to adoption. This help to reduce
transaction cost incurred when passing the information on the new technology to a large
heterogeneous population of farmers (Obayelu et al., 1017).

The other institutional support that farmers need to get to improve production and productivity
is credit service. Capital and risk constraints are key factors that limit the adoption of high
value crops by small scale farmers because these improved agricultural are more costly to
produce per hectare than traditional crops and most growers require credit to finance their
production (Girma, 2016). Access to credit affects the ability of a farmer to obtain the
necessary improved agricultural technologies at the right time and in suitable quantities. In
line with this, studies conducted by different authors have reported positive and significant
relationship of credit with adoption of improved agricultural technologies by farmers (Sisay,
2016; Kebede et al., 2017).

Another important factor that needs to be considered while dealing with technology adoption
is distance from market center. Access to markets is not only needed as an outlet for
production but also as a means of securing inputs. If there is no markets that can bear the extra
supply, farmers’ investment in new agricultural technologies will be for nothing, because
farmers need something to do with their increased output (Obayelu et al., 1017). Different
studies reported negative relationship between distance from market center and the probability
adoption of improved agricultural technologies. The study undertaken by Kebede et al. (2017)
showed that distance from market was negatively and significantly associated with the
adoption of improved wheat technologies. Households near to market centers tend to have
easier market access to dispose of their production (Gebresilassie and Bekele, 2015). In
addition; a study conducted by Adam et al. (2014) reported that market distance was
negatively and significantly associated with the adoption of crop technologies.

Cooperatives are among the strongest social institutions that play crucial roles in adoption of
improved agricultural technology. Farmer’s membership to cooperative has positive and
significant influence on adoption behavior, implying that farmers who are members of farmer
cooperative are more likely to adopt improved technologies (Ahmed, 2015; Kebede et al.,
2017). A probable reason for this result relates to the fact that cooperatives provide
information sharing platforms between farmers about the price, profitability and status of the
 22

new technology for member farmers. As a result, farmers in cooperatives tend to adopt
improved technologies faster than farmers who are not members. The other study conducted
by Girma (2016) revealed that being a member of a cooperative institution was found to
positively influence adoption of wheat technology packages. The result conveys the message
that cooperatives are among the strongest social institutions that play crucial roles in adoption
of wheat technologies.

2. 6.4. Psychological characteristics

Behavioral change process involves decision-making, which implies cognitive engagement in

deciding whether to adopt or reject a given innovation. According to Duvel (1975) Perception
is a key dimension in behavioral change process. However, major adoption studies have not
considered in the analysis of the determinants of adoption decisions. Farmer’s perception of
specific characteristics of technology significantly condition adoption decision (Biftu et al.,
2016; Mantegeb 2018). They further indicated that the omission of such variables in adoption
model might bias the result of factors determining adoption decision of farmers by ignoring
their possible and important influence on adoption behavior. In addition, the studies conducted
by Adam et al. (2014); Bayissa (2014) and Wen-chi et al. (2015) revealed that farmers have
subjective preferences for technology characteristics and these could play major role in
adoption behavior. They indicated that the perceived advantages and farmers’ individual risk
preferences and their ability to bear the risk of new technology play crucial roles in adoption
of improved agricultural technology.

2.7. Empirical Studies on Impact of Adoption

Technological improvement of farming systems and its adoption has positive impact on the
economic development of a country. According to literature on the impact of adoption of
agricultural technologies, improved varieties and other accompanying technologies have
positive contribution towards income improvement of farm households. The following
symmetric reviews of literature also confirm the positive effect of adoption of agricultural
technologies on income of household.
 23

The study conducted on role of adoption of agricultural technology on market participation

among rural households by Asfaw et al. (2012) suggested that the higher productivity from
improved agricultural technologies translates into higher output market integration resulted in
higher farm income to farming households. Similarly the study conducted by Ragasa (2016)
on adoption of high yielding wheat and its impact on farm income showed similar result that
adoption of high yielding wheat varieties has positive effect on the adopters farm income
thereby fostering the economic growth of the smallholders.

Likewise studies in Nigeria on the impact of improved rice technology on income among rice
farming households by Dontsop et al. (2011) reflects the positive impact of adoption on the
income of farm households. The empirical results of this study indicated that adoption of
improved varieties was raising farmers’ income and per capita expenditure, thereby increasing
their likelihood of escaping poverty. This confirms the widely held view that productivity
enhancing agricultural innovations can contribute to raising incomes of farm households in
developing countries.

Another study conducted by Berihun et al. (2014) on adoption and impact of agricultural
technologies on farm income in southern Tigray of Ethiopia also presented a similar result.
The ordinary least square regression results revealed that agricultural technology adoption has
an encouraging effect on farm income by which adopters were better off than non-adopters.
Similar study conducted by Yitbarek (2017) on the factors affecting adoption of legume
technology and its impact on farm income of smallholder farmers showed similar results. In
this study PSM treatment effect model was estimated to evaluate impact of adoption of
improved food legume varieties on the welfare of households by considering daily income,
consumption expenditure and calorie intake as welfare indicators. The results of PSM revealed
the positive effect of improved food legume varieties on household income.

Empirical studies have witnessed the significant contribution of using improved agricultural
technologies to the productivity and welfare (income) of farming communities. This has been
very much so in the sub-Sahara Africa where the gap between the actual and potential remains
high mainly on account of limited use of improved technologies. Studies conducted by Menale
et al. (2011), Solomon et al. (2012) and Sosina et al. (2014) on the impact of various
 24

improved crop technologies, in countries such as Ethiopia, Uganda, Tanzania and Malawi,
supported the hypothesis that adopter households experience increase in crop income, through
improved household productivity.

2.8. Analytical Framework of Adoption

A number of previous studies used various econometric techniques to identify the

determinants of agricultural technology adoption. Logit and Probit models are the convenient
functional forms for models with binary endogenous variables. Both models have been used
interchangeably and give almost the same results (Feder et al., 1985). The results from the two
models are very similar since the normal distributions from which the models are derived are
very similar except for the fact that the logistic distribution has slightly fatter tails (Gujarati
and Porter, 2009). The choice between the two models is thus a matter of convenience to the
analyst as stated in Gujarati (2004).

A number of studies conducted on technology adoption of smallholder farmers indicate that

for such type, the most commonly used models are the logit and probit models. The binary
model, a logistic distribution function, and the probit model, a normal distribution function,
are used in estimating the probability of technology adoption (Pindyck and Rubinfeld, 1981;
Feder et al., 1985; CIMMYT, 1993 and Greene, 2003). Such models have been widely used in
different adoption studies not only to help in assessing the effects of various factors that
influence the adoption of a given technology, but also to provide the predicted probabilities of
adoption (Asfaw et al., 2012).

Therefore, this study utilized probit model to analyze the likelihood of adoption of improved
wheat varieties by smallholder farmers because it is an appropriate econometric model for the
binary dependent variable and the error term assumed to be normally distributed. To motivate
the Probit model it can be assumed that the decision of a household to adopt the improved
wheat varieties (Yi=1) or not to adopt (Yi=0) depends on an unobservable characteristics (also
known as a latent variable), that is determined by one or more explanatory variables, Xi, in
such a way that the larger the value of the latent variable, the greater the probability of a
household to adopt the improved wheat varieties.
 25

2.9. Conceptual Framework of the Study

This study focused on household level analysis of determinants of adoption of improved wheat
varieties. From the above literature review, several factors affected farmer’s adoption of
improved technology such as, demographic, socio-economic, institutional and psychological
factors. The individual or a combination of these factors can influence adoption of improved
wheat varieties by farmers. The conceptual framework in Figure 1 shows how these factors
influence farmer’s adoption decisions in improved wheat varieties and how these decision
affect farm income of smallholder farmers.

Socio-Economic factors
- Land holding size Adopter
- Livestock holding size
Adoption decisions in
Institutional factors improved wheat
- Extension contact varieties
- Credit
- Market distance High annual
- Access to information farm income
- Cooperative membership

Non-adopter
Demographic factors
- Sex
- Education
- Farming experience
- Family size

Psychological Factor Low annual

- Perception on yield farm income
capacity

Source: Adapted from Sisay (2016)

Figure 1.Conceptual framework of the study
.
 26

3. RESEARCH METHODOLOGY

3.1. Description of the Study Area

Bale is one of the zones in Oromia Regional state which is surrounded by one National
regional state and five neighboring zones. It is bounded with Somali National Regional State in
the East, East Hararghe zone in the north east, West Hararghe zone and Arsi zone in the north,
West Arsi zone in the west and Guji zone in the south.

The study was conducted in Gololcha district. Available information suggested that the name
of the district might have derived from Gololcha River. The district town is called Jara. The
name Jara implies century in Afan Oromo. From 1996-1998 Gololcha and Gasera districts
were merged together and form Gololcha Gasera district by assigning Jara as a capital of the
district. But from 1998 onward, the two districts split each other and form their own
administrative district. Gololcha district has endowed by numerous historical places and tourist
attraction like Dire Sheik Hussein (BZADO, 2015).

Astronomically, the district lies between 70N-701/2’N latitude and 40E-401/2’E longitude. It is
located in the northern extreme parts of the Bale zone. It is bounded by Gasera district in the
west, Lega-hida and Sawena districts in the East, Ginir district in the southeast and Arsi zone in
the north. Gololcha district is located at a distance of 122 km from zonal capital called Robe
and 550 km from capital city of the country Addis Ababa.

The total population of the district is 1142274, out of which 58345(51.06%) are male and
55929 (48.94%) are female. Population is unevenly distributed in the district. Since the
majority of the population is engaged in agricultural activity, the rural population has 93.99
percent share out of the total population of the district. Thus, there are high concentrations of
the population in rural areas of the district than urban areas (BZADO, 2015).

Based on altitude the districts are classified into three-agro climatic zones namely, highland,
semi highland and lowland. The mean annual temperature of the district is 19 oc.The lowest and
highest temperature of the district is 15oc and 23oc respectively. The district is known for its
bimodal rainfall pattern and hence highly suitable for agriculture. The distict also has two
distinct seasons; i.e., Belg which is locally known as Gana (from March to July) and Meher
 27

locally known as Bona (from August to January). The mean annual rainfall of the district is
750 mm whereas the lowest and highest rainfall is 580mm and 920mm respectively.

Mixed farming system characterizes the agricultural production system of the district. The
district is suitable both for livestock and crop production. The major crops grown in the district
are cereals (wheat, barley, maize, teff, and other cereals), pulses (beans, peas and linseed) and
vegetables. At present, in the district, all kebeles of the district produce wheat and it ranks first
in terms of area coverage (41.24%) and production (44.42%) followed by barley, maize and
teff respectively (GDOA, 2018). The location map of the district is presented below.

Figure 2.Geographical location of Gololcha district

 28

3.2. Sample Size and Sampling Procedure

Multistage sampling method was employed to draw sample respondents with a combination of
purposive and simple random sampling techniques. In the first stage, Gololocha district was
purposively selected because it is among the major wheat producing districs of Bale zone. At
the second stage, out of 25 major wheat producing kebeles in the district, a total of 12 potential
wheat producing kebeles were identified. At the third stage, among the12 potential wheat
producing kebeles four kebeles were randomly selected. Finally, representative sample
respondents were randomly selected by probability proportional to size technique (PPS) of the
number of households in each four sample kebeles. The sample size for the study was
determined based on Yamane (1967) since the population is homogenous in terms of
production system. This was because; even if there is variation among smallholder farmers in
terms of adoption status of improved seeds, all farmers involved in wheat production (GDOA,
2018). The simplified formula is:

Where, n is the sample size for the study, N= Total number of wheat producers in the district
(26837) and e is the precision level (6%). Based on the formula, the total sample size of the
study was 202 farmers. The distribution of sample households in each sample kebeles are
reported in Table 1 below based on the proportion to total sizes.

Table 1.Distribution of sample households in the sample kebeles by PPS

Kebele name Total Sampling frame Sample households
Adopters Non adopters Total Adopters Non-adopters Total
Dinsa 320 533 853 26 42 68
Selam 370 412 782 29 33 62
Ataba 210 192 402 17 15 33
Katiba 240 260 500 19 21 41
Total 1140 1397 2537 91 111 202
Source: Gololcha district office of agriculture and own computation, 2019.

3.3. Data types, Sources and Method of Data Collection

Both quantitative and qualitative data were collected from primary and secondary sources for
this study. The primary data sources were wheat producers, key informants and focus group
 29

discussants (FGD) while the secondary data related to wheat production, input used,
productivity and trends of wheat production, general socio-economic information of the
woreda, major types of crop produced and topography of the woreda were acquired from
Gololcha district office of agriculture (GDOA), published and unpublished documents such as
CSA of Ethiopia.

Moreover, two focus group discussions and eight Key Informants Interviews were conducted
in order to supplement and triangulate the data collected through structured interview using
check list to collect the data.

For FGD, as the farming systems of the selected kebeles are homogeneous, two kebeles which
are Dinsa and Ataba randomly selected and the discussion was intensively held at these two
kebeles. During data collection, development agents of both kebeles were consulted for
identifying farmers for FGD .At both kebeles, male and female headed farmers were included
and the discussion was conducted separately for the two groups. In Dinsa kebele the
discussion was made with eighteen wheat producers (nine male and nine female-headed
households) while in Ataba kebele twelve wheat producers (six male-headed and six female-
headed households) were selected for FGD. The selected respondents for focus group
discussion were those households who were not interviewed by the structured interview
schedule before. Information on issues such as wheat production trends, challenges and
opportunities of improved wheat varieties production in the study area and farmers’ improved
input utilization for wheat production were collected using check list prepared for this purpose
and till the completion of the discussion, the researcher played a facilitation role and managed
the process of discussion in order to make the discussant not be out of the discussion agenda.

Furthermore, the key informant interview was also employed to draw important information
on improved wheat production in the study area. A total of thirteen key informant
interviewees, including four development agents (one person from each kebeles), eight model
farmers (one male and one female model farmer from each kebeles) and Gololcha woreda
head of agriculture (one person) were interviewed. General issues concerning the objective of
the study were raised for the key informants and in-depth discussion about improved wheat
production and productivity, input availability and wheat production constraints around the
 30

study area were captured. This helped the researcher to extract detailed information regarding
improved wheat varieties production and constraints related with it in the study area.

Before conducting the actual survey; the interview schedule was translated into the local
language (Afan Oromo). Then the interview schedule was pre-tested by administering on non-
sample farmers and based on the feedback from pretest, a modification was made. Ten
enumerators, all diploma holders, were selected and recruited on the basis of their adequate
knowledge about the area, prior exposure to similar work and well acquainted with the culture
and language. The necessary theoretical and practical training was given to enumerators about
the methods of data collection and content of the interview schedule for one day by the
researcher. They collected the necessary data under the close supervision of the researcher.

3.4. Method of Data Analysis

Following data collection, data was coded and arranged for analysis. In order to analyze the
quantitative data, descriptive and inferential statistics and econometric model analysis were
used. Narration, interpretation, and pair wise ranking were used as tools to analyze the
qualitative data.

3.4.1. Descriptive statistics

Descriptive statistics such as mean, frequency, standard deviation and percentages were used
to discuss the household demographic, socioeconomic, institutional and psychological
characteristics. The result of the analysis was presented by table and graph. Inferential
statistics such as chi-square test and t-test were also employed. The chi-square test was
employed to see the significant percentage difference between improved wheat varieties
adopter and non-adopter households in terms of dummy independent variables. On the other
hand t-test was conducted to see if there was a statistically significant mean difference
between improved wheat varieties adopters and non-adopters with respect to continuous
variables.
 31

3.4.2. Econometric analysis

In measuring determinants of smallholders ‘adoption decision; different econometric models

were employed in the literature each with different drawbacks as well as strengths. This study
utilized the probit model to analyze likelihood of adoption of improved wheat varieties by
smallholder farmers because it is an appropriate econometric model for the binary dependent
variable and the error term assumed to be normally distributed.

Specification of the Probit Model

µ

Where, is latent and observed level of participation in improved wheat production

respectively, β is a vector of parameters to be estimated and Xᵢ is a vector of variables
(demographic, Socio-economic, institutional and psychological factors) influencing the
households’ status of adoption in improved wheat varieties and µ is a vector of error terms.
Before running the model, the existence of multicollinearity problem among the hypothesized
independent variables was checked. Multicollinearity problem is the situation where there is
high correlation among explanatory variables. In order to check this, variance inflation factor
(VIF) and contingency coefficients (CC) test were used for continuous and discrete variables
respectively. As a rule of thumb, multicollinearity is believed to be problematic if VIF values
of any continuous variable exceed 10 or and correlation coefficient is above 0.75 for dummy
variables.

Impact analysis method

Finally, propensity score matching (PSM) method was used to evaluate the impact of
improved wheat varieties adoption on farm income of smallholder farmers. In this case,
estimating the effect of household’s status of adoption of improved wheat varieties on a given
outcome (Y) is specified as:

Where Ti is treatment effect, Y is the outcome, and Di is a dummy whether household i has
got the treatment or not. However, one should note that Y (Di= 1) and Y (Di=0) cannot be
observed for the same household at the same time. Depending on the position of the household
 32

in the treatment either Yi (Di=1) or Yi (Di=0) is unobserved outcome (counterfactual

outcome). Due to this fact, estimating individual treatment effect Ti is not possible and one has
to shift to estimate the average treatment effects of the population than the individual one.
Two treatment effects are most frequently estimated in empirical studies (Dillon, 2008). The
first one is the Average Treatment Effect (ATE), which is simply the difference of the
expected outcomes after using a technology or not:

However, Heckman et al. (1997) note that this estimate might not be important to policy
makers because it includes the effect for whom the intervention was never intended.
Therefore, the most important evaluation parameter is the so-called Average Treatment Effect
on the Treated (ATT), which concentrates solely on the effects on those who are producing
improved wheat varieties. ATT is given by:

ATT= E (Y1− Y0| D = 0, p(X)) =E (Y1|D=1, p(X)) −E (Y0| D = 0, p(X)).

Where p(x) is the propensity score computed on the covariates X and is explained as: the mean
difference in outcomes over the common support, appropriately weighted by the propensity
score distribution of participants.

In non-experimental studies, one has to introduce some identifying assumptions to solve the
selection problem, namely: the Conditional Independence Assumption (CIA) and the Common
Support Condition (CSC) (Becker and Ichino, 2002). CIA (also known as unconfoundedness
assumption) states that the potential outcomes are independent of the treatment status, given
X. In other words, after controlling for X, the treatment assignment is “as good as random”.
The CIA is crucial for correctly identifying the impact of the program, since it ensures that,
although adopter and non-adopter groups differ, these differences may be accounted for in
order to reduce the selection bias. This allows the non-adopter units to construct a
counterfactual for the treatment group. The common support condition entails the existence of
sufficient overlap in the characteristics of the adopter and non-adopter units to find adequate
matches (or a common support).
 33

3.5. Variables Definition, Measurement and Hypothesis

3.5.1. Dependent variables

Adoption decisions in improved wheat varieties: It is dummy variable that takes value of 1
for adopter and 0 for non- adopter. Adoption of improved wheat varieties by households is the
dependent variable. It refers variable of the model that is adoption or non-adoption of
improved wheat varieties.

3.5.2. Outcome variable

Farm income: It is a continuous variable measured in Birr, indicating the total annual
earnings of the household from sale of agricultural product such as sale of crop, livestock and
livestock product in 2018/19 year of production converted to Ethiopian Birr (ETB).

3.5.3. Explanatory variables

The independent variables of the study were those which are hypothesized to have an
association with farmer’s decision in adoption of improved wheat varieties. The findings of
past studies on adoption of improved agricultural technologies by smallholder farmers, the
existing theoretical explanations and the researcher’s preliminary knowledge of the farming
systems of farmers in the study area were used to select explanatory variables for hypotheses.
Hence, the potential explanatory variables, which were hypothesized to influence farmer’s
decision in adoption of improved wheat varieties, are presented. These include: demographic,
socio-economic, institutional and psychological variables which are briefly explained below.

1. Farming experience: It is a continuous variable measured in number of years since a

household head started wheat crop farming activities. It was one of the expected factors to
influence farmer’s decision in adoption of improved wheat varieties. That is, experienced
farmers are expected to have greater access to productive resources (such as land and
livestock) and be able to apply improved agricultural technologies, recommended agronomic
practices and expected to be faster in adopting improved wheat varieties than inexperienced
farmers (Kaleb and Workneh, 2016). Hence, experience of the household head in wheat crop
 34

farming activities was hypothesized to affect the adoption of improved wheat varieties by
smallholder farmers positively.

2. Sex of household head: It is a dummy variable which takes a value of 1 if the household
head is male and 0 otherwise. Sex of household has a significant influence on household’s
decision to adopt improved wheat varieties. Due to resources control, male-headed households
can adopt improved wheat varieties than their female counterparts. The study of Hassan
(2014) showed that, sex has a significant and positive relationship with the adoption of
improved agricultural technologies. In this study being a male headed household was expected
to positively influence adoption of improved wheat varieties by smallholder farmers.

3. Educational level of the household: It is a continuous variable measured in numbers of

years of schooling. Educated farmers are more aware of the benefits of modern technologies
and may have a greater ability to learn new information hence easily adopt new technologies
(Umeh and Chukwu, 2013; Tiamiyu et al., 2014). Literate households are expected to have
better skills; better access to information and ability to process information which enable them
to improve their productivity through adoption of improved agricultural technologies (Efa et
al., 2017). Therefore, education was expected to positively and significantly influence the
adoption of improved wheat varieties by smallholder farmers.

4. Land holding size: It is a continuous variable measured in hectares owned by the farmers.
Large land holding size is an indicator of wealth and social status within a rural community
(Ogutu and Obare, 2015). The land holding size returned a positive and significant relationship
with adoption of new technology (Onumadu and Osahon, 2014; Oyewole et al., 2014).
Farmers who own and cultivate larger farms are likely to use improved crop varieties and
allocate larger areas to improved maize varieties (Chilot and Dawit, 2016). This means that
farmers who have relatively large farm size will be more initiated to adopt new technologies
and the reverse is true for small size farmers. Therefore, it was expected to positively influence
the decision to adopt improved varieties by smallholder farmers.

5. Livestock holding size: It is a continuous variable measured in TLU. Livestock is an

important source of income in rural areas. A household with large livestock holding can obtain
more cash income from the sales of animal products. This income in turn helps smallholder
 35

farmers to purchase farm inputs. Leake and Adam (2015) reported that being owner of more
livestock increases the level of adoption of improved agricultural technology. Similar studies
by Victor (2016), and Myrick (2016) found a positive association between adoptions of
improved agricultural technologies with livestock ownership because livestock may serve as a
proxy for the availability of manure. Therefore, livestock ownership was hypothesized to
positively influence adoption of improved wheat varieties by smallholder farmers.

6. Family size: It is a continuous variable measured as a number of household members

available in each household head that was converted in adult equivalent ratio (AE). Larger
families are the major sources of labor for agricultural activities in rural area and positively
related with the adoption of improved agricultural technologies (Oyewole et al., 2014). A
larger household size has the capacity to relax the labor constraints required during
introduction of new technology (Mignouna et al., 2011, Chilot and Dawit, 2016). A household
with larger number of workers per unit of land area is more likely to be in a position to try and
continue using a potentially profitable innovation and it was expected to influence adoption
positively. On the other hand, the study conducted by Yemane (2014) revealed that there was
no significant difference in labor availability between adopters and non-adopters. Hence, it
was hypothesized that family size would influence the adoption of improved wheat varieties
by smallholder farmers.

7. Access to credit: It is a dummy variable, which takes the value 1 if the farm household uses
credit and 0 otherwise. Access to credit can relax the financial constraints of farmers and
allows farmers to buy inputs and hence increases the probability of adopting improved
agricultural technologies. The result of several studies indicated that credit availability
positively affects the adoption of improved technologies such as improved varieties and
chemical fertilizers (Tiamiyu et al., 2014; Leake and Adam, 2015; Ogutu and Obare, 2015).
Therefore, this variable was expected to influence the adoption of improved wheat technology
by smallholder farmers positively on the assumption that access to credit improves the
financial capacity of improved wheat varieties producing farmers to buy modern inputs,
thereby increasing production.

8. Frequency of extension contact: It is a continuous variable measured by number of days

that development agent made contacts with a household in a year. Empirical results revealed
 36

that extension services play important role in the implementation and diffusion of innovation
and has positive and significant influence on adoption of new agricultural technology (Biftu et
al., 2016). The effort to disseminate new agricultural technologies is within the field of
communication between the extension agent and the farmers at the grass root level. Here, the
frequency of contacts between the extension agent and the farmers is hypothesized to be the
potential force which accelerates the effective dissemination of adequate agricultural
information to the farmers, thereby enhancing farmers' decision to adopt new technologies.
Mignouna et al. (2011), Hassen (2014) and Victor (2016) explained that access to extension
services enhanced farmers’ exposure and familiarity to agricultural technologies. Following
this argument; in this study extension contact was hypothesized to positively influence
farmers’ decision to adopt improved wheat varieties.

9. Distance from market center: It is a continuous variable measured in kilometers. Market

distance is one of the determining factors in the adoption of agricultural technologies by
farmers. The distance to markets can influence farmers’ decision making in various ways.
Better access to the market can influence the use of output and input markets (Leake and
Adam, 2015). It is expected that farmers living nearer to the market would easily access
market for their farm produce hence readily adopt new technology. The closer the farmer to
the market, the more likely he/she receive valuable information, buy farm inputs and sale his/
her farm produces easily, and hence more likely to adopt improved technologies and
transaction cost decreases (Mantegeb, 2018). On the contrary to this finding, a study made by
Wenchi et al. (2015) shows there was no significant difference in distance to market among
adopters and non-adopters of improved rice varieties among rural farm households in central
Nepal. Therefore, market distance was expected to be negatively associated with adoption
decision of improved wheat varieties by smallholder farmers.

10. Perception on yield capacity: It is a dummy variable, represented by 1 if the farmer

perceived superiority of improved wheat variety over local variety in terms of yield, 0
otherwise. If farmers perception is positive towards the advantage of technology it will
enhances decision in favor of adoption of the technology (Bayissa, 2014). Farmers’ perception
on use of improved wheat varieties is generally attached with the advantage of improved
wheat varieties attributes. Farmers examine the advantages from the point view of yield
 37

advantage, resistance to diseases, early maturity and other necessity to adopt a technology
(Muktar, 2017 and Mantegeb, 2018). Therefore farmer’s perception on yield capacity of
improved wheat varieties compared to the local variety was hypothesized to influence
adoption of improved wheat varieties by smallholder farmers positively.

11. Membership to cooperative: It is a dummy variable represented by 1 if household head is

the member of farmers’ cooperatives in the village and 0 otherwise. Farmer’s membership to
cooperative has positive and significant influence on adoption behavior, implying that farmers
who are members of farmer’s cooperative are more likely to adopt improved technologies
(Ahmed, 2015; Kebede et al., 2017). Membership to an organization like cooperative is
important for information exchange and experience sharing among the farm households on the
use of improved agricultural technologies (Aman and Tewodros, 2016). A probable reason for
this result relates to the fact that farmer’s cooperatives provide information sharing platforms
between farmers about the price, profitability, status of the new technology for member
farmers. Therefore, this variable was expected to positively affect the adoption of improved
wheat varieties by smallholder farmers.

12. Access to market information: This variable was considered dummy with value of 1 if a
farmer got market information on output and input of improved wheat varieties and 0 if did
not. Farmers’ adoption decision in improved wheat varieties are based on sufficient market
price information that farmers have about improved wheat varieties and others inputs used in
wheat production. The study of Gutu (2016) revealed that, access to information on price
affected the proportion of crop sold at 1% significance level positively. This due to price
attracts farmers and can change farmers’ decision. Therefore; access to market information
was expected to positively influence the adoption of improved wheat varieties by smallholder
farmers.
 38

Table 2.Summary of description of variables and expected effect

Variable Description Variable Types and Measurement Expected Sign
Farming experience Continuous, years of farming +/-
Sex of household head Dummy; 1=Male, 0=Female +
Educational level Continuous, year of schooling +
Land holding size Continuous, measured in hectares +/-
Livestock holding size Continuous, measured in TLU +
Family size Continuous, family size number +/-
Access to credit Dummy; yes/no +
Frequency of extension contact Continuous; days +
Market distance Continuous, kilometers -/+
Perception on yield capacity Dummy. yes/no +
Membership to cooperative Dummy; yes/no. +/-
Access to market information Dummy; yes/no +
 39

4. RESULTS AND DISCUSSION

This chapter contains three main sections in which the main result and finding of the study is
presented and discussed. The first section deals with the result of descriptive statistics about
the demographic, socio-economic, institutional and psychological characteristics of farmers in
the study area. The results of econometric model on the factors influencing smallholder’s
improved wheat varieties adoption decision and the impact of adoption of improved wheat
varieties on the farm income of smallholder farmers are presented in the second and the third
section respectively. The qualitative data gathered from focus group discussants and key
informants is also interpreted to substantiate the quantitative data by merging them together.

4.1. Descriptive Results

This section presents the demographic, socioeconomic, institutional and psychological

characteristics of respondents in the study area. The characteristics of sample households were
summarized under each sub-section by descriptive (mean and percentage) and inferential
statistics (chi-square and t-test). For this study, the data was collected from both adopters 91
(45%) and non-adopters 111 (55%) of improved wheat varieties during the survey year.

4.1.1. Demographic characteristics of the sampled household

Sex of household head: Out of the total adopters, 94.26 % of them were male-headed
households, whereas only 5.74 % of them were female-headed households who adopted the
improved wheat varieties. The same is true for non-adopters where the majority of them
(94.33 %) were male-headed and the remaining 5.67% were female-headed households. The
result of chi-square test (χ2=0.732) shows that no significant percentage difference is
observable in the sex of household head since almost all of the respondents were male headed
households (Table 3).

Farming experience: The average farming experience of the sampled respondents was 20.03
years. The average farming experience of the adopter and non-adopter households were 20.33
and 19.79 years respectively (Table 3). The statistical value of the t-test result (t=1.163)
indicates insignificant mean difference between adopters and non-adopters in terms farming
experience the farmers have in wheat crop production.
 40

Family sizes: The average household size for sample farmers was 4.26 adult equivalents. The
mean household size of improved wheat varieties adopters was 4.17 while that of the non-
adopters was 4.35 adult equivalents (Table 3). But the statistical analysis result from t-test (t=-
0.180) showed that, there is no significant mean difference observed between adopter and non-
adopter households in terms of their family size converted adult equivalent ratio.

Educational level of household head: Education is important for household’s adoption of

improved agricultural technologies as literate households are expected to have better skills and
information on agricultural production. The average year of formal education of the sampled
respondent was 3.80 years. In this study adopters seem to significantly vary in terms of their
formal education level that is years of schooling and adopters have higher proportion of
household heads with more years stayed in education (Table 3). The average years of formal
education of adopters and non-adopters were estimated to be 4.34 and 3.36 years respectively.
The result of independent t-test (t=-1.66) shows a significant mean difference between adopter
and non-adopter households years of schooling at the 10% significance level, implying the
adopters of improved wheat varieties were more literate than non- adopters of improved wheat
varieties.

Table 3.Demographic characteristics of sample households

Variables Adopters Non adopters (n=111) Total t-value
(n=91) (N=202)
Sex of household Male 94.26 94.33 94.30 0.732
Female 5.74 5.67 5.70
Farming experiences (years) 20.33 19.79 20.03 1.163
Family size (AE) 4.17 4.35 4.26 -0.180
Educational level (years) 4.34 3.36 3.80 -1. 66*
* indicates significant at 10 % significance level
Source: Own survey, 2019

4.1.2. Socio-economic characteristics of the sampled households

Land holding size: land holding size is an indicator of wealth and social status within a rural
community. In Ethiopia the land holding size per household is decreasing from time to time
due to rapid population growth which the same holds true in the study area. In this study, the
average land holding of sample population was found to be 3.67 ha. The average land holding
for adopters was 4.2 ha while that of non-adopters was 3.14 ha. The result from t-test (t=4.8)
 41

indicated that, there is statistically significant mean difference in land holding size between
adopters and non-adopters household at the 1% significance level (Table 4).

Livestock ownership: Livestock supports the livelihoods of considerably larger proportion of

rural households in Ethiopia by serving as draught power, transportation and means of asset
saving in rural areas in addition to serving as a source of food and cash income (Gelan et al.,
2012). The same holds true in the study area. On average the total sample households have
about 6.91 tropical livestock unit. The adopters and non- adopters of improved wheat varieties
average livestock holding were 8.39 and 5.42 TLU respectively (Table 4). This discrepancy
infers that livestock are important for farmers’ adoption of improved wheat varieties through
serving as draught power, transportation and buying inputs by selling them. Statistical analysis
of t-test result (t=6.01) also confirms that there is a significant mean difference in livestock
owned by adopter and non-adopter households of improved wheat varieties at the 1% level of
significance.

Table 4 Socioeconomic characteristics of sample households

Variables Adopter Non adopter Total t-value
(n=91) (n=111) (N=202)
Land holding size (ha) 4.20 3.14 3.61 4.8***
livestock holding size (tlu) 8.39 5.42 6.75 6.01***
*** indicates significant at 1 % significance level.
Source: Own survey, 2019

4.1.3. Institutional characteristics of households

Distance from market center: Distance from market center where farmers often sale their
wheat product and buy farm input influences their adoption decision on improved wheat
varieties. On average, the sampled households are at a distance of about 5.92 kilometers from
farmer’s resident to the nearest market center that is Jara market. The average distance from
farmer’s resident to the nearest market center for adopters was 5.1 kilometers while the non-
adopters were 8.9 kilometers away from the market center (Table 5). The t-value (t=7.43) of
statistical result showed that, there was a significant mean difference in terms of distance
traveled by those who adopted improved wheat varieties and who did not adopt at the 1%
significance level.
 42

Access to credit: Both formal and informal lending institutions provide credit in the study
area. Oromia Credit and Savings Institution (OCSI) was the major source of formal credit
providers whilst friends, relatives and traders were among the informal sources of credit.
Credit received by farmers can solve their cash constraints and enables them to make timely
purchase of inputs to increase productivity of wheat. This would increase farmers’
participation in adoption of improved wheat varieties. Among the interviewed farmers;
69.47% of them received credit while the remaining 30.53% did not receive credit in the study
area. Out of the total adopters, 83.10% of them received credit. On the other hand, out of the
total non-adopters, 58.30% of them received credit. The statistical analysis of chi-square test
result (χ2=12.26) shows statistically significant at 1% level of significance (Table 5), implying
that, there was a significant percentage difference between improved wheat varieties adopters
and non-adopters in terms of credit receiving.

Even though, for analysis, this variable was considered as dummy (credit users and non-users).
Fear to repay (10.2%), high interest rate of credit (10%), having own enough capital (6.3%)
and need of credit collateral (3.5%) were the major factors discouraging farmers borrowing
from the formal source of credit (Appendix Table 5). The focus group discussants also raised
procedural complication for obtaining credit and short payback periods as hinders of
borrowing from formal credit in addition to the problems obtained from respondents.

Frequency of extension contact: Extension agent’s contact with farmers is expected to

accelerate farmer’s adoption of improved wheat varieties. Improved wheat varieties adopters
made contact with extension agents and received advices about wheat production mainly at
land preparation and sowing season. On average, the total sample households made contact
with extension agents specifically on wheat production issues 12.90 times per year while the
improved wheat varieties adopters made more contact with development agents 16.48 times
per year compared to the non-adopters who made about 9.97 times per year on average (Table
5). The t-value (t=3.63) shows that, there is a statistically significant mean difference in the
frequency of extension contacts made between adopters and non- adopters of improved wheat
varieties at 1% significance level.

Access to market information: Having market information about season price variation of
wheat, demand and supply situation can affect farmers’ adoption decisions. Out of the total
 43

202 respondents, 68.60% of them reported they had market information regarding wheat price
related market information from different sources such as neighbors, traders, farmers union
and own source while the remaining 31.4% respondents did not have access to market
information. Among the total adopters, 87.36% of them were accessed wheat price related
market information from different sources while only 53.22% of non-adopters household were
accessed market information (Table 5). The chi-square value (χ2=13.622) shows significant
percentage difference between improved wheat varieties adopters and non- adopters household
in terms of access to wheat related market information at 1% level of significance.

Membership to cooperative: Membership to different farmer’s organizations is believed to

enhance the information exchange and experience sharing among farm households on the use
of improved agricultural technologies. Among the interviewed farmers; 95.40% of them were
membership in farmer’s cooperative. Out of the total adopters, 96.54% of them were
membership in farmer’s cooperative and the same is true for non-adopters where the majority
of them (94.26%) were membership in farmer’s cooperative (Table 5). The statistical analysis
result from the Chi-square test result (χ2=0.469) shows no significant percentage difference
between adopters and non-adopters household in terms of their membership to farmer’s
cooperative.

Table 5.Institutional characteristics of sample households

Variables Adopters Non adopters Total t-/ χ2-value
(n=91) (n=111) (N=202)
Access to market information (%) Yes 87.36 53.22 68.60 13.622***
No 12.64 46.78 31.40
Access to credit services (%) Yes 83.10 58.30 69.47 12.26***
No 16.9 41.70 30.53
Extension contact (days) 16.48 9.97 12.90 3.63***
Distance from market center (km) 5.30 8.60 7.11 7.23***
Membership to cooperative (%) Yes 96.54 94.26 95.28 0.469
No 3.44 5.74 4.72
*** indicates significant at 1 % significance level
Source: Own survey, 2019

4.1.4. Farmers’ perception on improved wheat varieties attributes

Farmers’ perception on a given technology is assumed to determine farmer’s decision to adopt

that technology. Perception was tested based on different wheat varietal attribute preferences
 44

of sample households. These attributes include yield capacity, disease resistance, better market
price, early maturity of improved wheat varieties compared to the local varieties. As
summaries in Table 6 shows, out of the total sample households 65% of the sample
respondents perceived that improved wheat varieties give higher yield advantage than local
varieties. About 84.7% of adopters reported higher in yielding capacity of improved wheat
varieties than local wheat varieties. On the other hand among the total non-adopters, only
42.7% of them perceived yield advantage of the improved wheat varieties compared with the
local varieties. The chi-square test (χ2=15.95) shows significant percentage difference
between adopters and non-adopters in perception of yield potential of the improved wheat
varieties than the local varieties at 1% significance level.

Disease resistance capacity of improved wheat varieties was also another comparison criterion
that farmers used to value the advantage of improved wheat varieties in the study area. From
the total sample households, 59.4% of them perceived that improved wheat varieties are better
than local varieties in terms of disease resistance capacity. Proportionally 67.1% of adopters
and 50.7% of non-adopters perceived that improved wheat varieties are better than the local
varieties in terms of disease resistance capacity. The chi-square value (χ2=12.83) shows
statistically significant percentage difference between the two groups in terms of perception on
disease resistance capacity of improved wheat variety at 1% significance level (Table 6).

The respondents were also asked about the early maturity of improved wheat variety as
compared to local variety. Accordingly, 62.25% of sample respondents reported improved
wheat varieties have shorter maturity period than local varieties. While 79.4% of the adopters
and 51.8% of the non-adopters perceived the improved varieties are better than the local
varieties by having shorter maturity period than local varieties. The chi-square value (χ2=9 89)
shows significant percentage difference between the two categories at 1% significance level
(Table 6).

Better market price is one of the most important attribute farmers use to compare improved
wheat varieties with local varieties. About 86.3% of adopters and 42.4% of non-adopters
perceived the improved wheat varieties have better market price than the local varieties. The
chi-square value (χ2=11.965) shows statistically significant percentage difference between the
 45

groups in perceiving better market price advantage of the improved varieties compared to the
local varieties at 1% significance level (Table 6).

Finally seed color was also perceived as critical by famers (Table 6). Therefore, taking into
consideration the range of attributes that farmer’s use when choosing improved wheat varieties
for adoption are need to be a prerequisite when developing wheat varieties in the study area.

Table 6.Perception of sample respondents about improved wheat varieties attributes

Attributes Adopters Non-adopters Total χ 2-value
Yes No Yes No Yes No
Better yield % 84.7 15.3 42.7 57.3 61.62 38.38 15.95***
Disease resistance% 77.1 22.9 50.7 49.3 62.59 37.41 12.83***
Color% 74.2 35.8 42.8 51.2 56.94 43.06 10.642***
Early maturity% 79.4 20.6 48.2 51.8 62.25 37.75 9 89***
Better market price% 86.3 13.7 42.4 57.6 62.17 37.83 11.965***

*** indicates significant at 1 % significance level.

Source: Own survey, 2019

4.2. Adoption of Improved Wheat Varieties

In this study, adoption decisions refer to use of improved wheat varieties. A farmer is defined
as an adopter if he/she uses at least one of the improved wheat varieties, otherwise is a non-
adopter. Based on their use of improved wheat varieties farmers were classified as adopters
and non-adopters. As a result shows, a farm household is adopter of improved wheat varieties
if he/she used at least one variety of improved wheat varieties during the cropping season.
Under normal conditions, improved wheat varieties are preferred by smallholder farmers in the
study area which have better yield potential, good market price and resistance to different crop
disease particularly wheat rust (Table 6). In the study area there are some wheat varieties in
use and tend to stay with farmers due to resisting crop diseases and other ecological
characteristics while some of them are discarded from production due to poor disease
resistance and environmental problems. Kubsa, Digalu, and Kakaba are among the out of date
and non-resistance wheat varieties in the area. The diseases resistant improved wheat varieties
such as Sannate (36.34%), Oborra (26.60%) and Ogolcho (16.40%) were widely demonstrated
to farmers and adopted with associated cultural practices in the study area (Table 7).
 46

Table 7.Improved wheat varieties adopted by smallholder farmers

Name of improved wheat varieties Frequencies Percent adopted
Sannate 33 36.34
Oborra 24 26.60
Hidase 17 18.57
Ogolcho 15 16.40
Others 2 2.09
Total 91 100
Source: Own survey, 2019

4.2.1. Reasons for the preferred improved wheat varieties

Farmers gave various reasons for choosing the wheat varieties they were using. High yielding
capacity of improved wheat varieties was mentioned as the most important reason given by
many respondents. Pests and diseases resistance was also reported as the most important
reason for the preferred wheat varieties. From economic point of view, the aspect of wheat
variety being pests and diseases resistant is important, as it cuts down on the cost of
production. Attractive seed and hard seed for market are the other traits farmers’ consider
while selecting improved wheat varieties in the study area. Pair wise ranking was used as a
tool to summarize farmers’ preference towards improved variety traits as it shown in the table
8 below.

Table 8.Rank of the adopted improved wheat varieties based on farmers’ selection criteria
Name of varieties Rank Reasons for selection
Oborra 2nd Disease resistant (rusts), medium crop stand, attractive seed
colour and hard seed for market, good yield
Sannate 1st Disease resistant (rusts), very good crop stand, very good
yield, strong stem and good for black soil, poor seed colour
for market, shattering problem in case of off-season rain
rd
Hidase 3 Unsusceptible to diseases (rusts), medium crop stand, good
yield, soft seed for market,
Source: Own survey, 2019
 47

4.3. Wheat Production Constraints in the Study Area

Wheat production in the study area was constrained by different factors (Table 9). The results
show that timely availability of improved wheat seed with required quality, timely availability
of fertilizer and pesticides, access to credit to purchase farm inputs, and crop diseases such as
rust were indicated as the major hindrance of improved wheat varieties production in the study
area. The other constraints identified were high price of harvest cost by combiner, access to
market information, low price of wheat produce, and weed infestations which extensively
hamper the farmers not to fully adopt the available improved wheat varieties and in turn
resulted to low production and productivity. Furthermore, adopters and non-adopters have
statistically significant percentage difference in facing constraints for adoption of improved
wheat varieties in the study area.
Table 9 Constraints of improved wheat varieties production in the study area (%)
No Types of Constraints Adopter Non-adopter Total χ2
Yes No Yes No Yes No
1 Timely availability of IWV 60.9 39.1 31.1 68.9 44.52 55.48 15.652***
2 Quality of seed 55.18 44.82 39.08 60.92 46.33 53.67 4.621**
3 Harvesting cost by combiner 42.52 57.48 17.24 82.76 28.62 71.38 12.27***
4 Timely availability of inputs 63.22 36.78 31.04 68.96 45.53 54.47 16.083***
5 Market Information access 27.58 72.42 12.64 87.36 19.37 80.63 8.044**
6 Low price of output 70.12 29.88 14.94 86.06 39.79 60.21 16.585***
7 Crop diseases 57.48 42.52 18.40 81.6 36.06 63.94 11.935***
9 Weed infestation 73.56 26.44 13.80 86.20 40.72 59.28 14.328***
10 Soil fertility 20.68 79.32 11.14 88.86 15.43 84.57 2.82*
*, ** and *** indicates significant at 10 %, 5%, and 1 % significance levels, respectively
Source: Own survey 2019.

During FGDs, the discussants identified risk resulting from rainfall variability such as late on-
set, mid-season spells and early cessation as well as, high cost of input, shortage of input
supply and low output market price reported as the major bottleneck of wheat production.
From the biotic constraints, wheat rust disease is the most challenging wheat production in the
study area. Weeds, especially grass weed severely affects wheat production while insects are
relatively minor constraints of wheat production in the study area. The pair wise ranking
challenges of wheat production by focus group discussants in the study area was presented in
the following table 10.
 48

Table 10 Pair wise ranking challenges of wheat production in the study area
Wheat production constraint Score Rank
Shortage of rainfall 3/9 6
Change in season of rainfall 3/9 6
High cost of input price 5/9 3
Low market price of output 4/9 4
Shortage of input supply 4/9 4
Rust disease 9/9 1
Timely availabilityof input 6/9 2
Insect disease 0/9 9
Weed problem 2/9 8
Source: Own survey, 2019

4.4. Econometric Model Result

Before running the model, outliers were checked by box plot graph so that there was no
problem of outlier and no data were lost due to outliers. In addition, multicollinearity which is
a common problem of cross-sectional data was also checked. Multicollinearity indicates
whether there is linear relation between explanatory variables or not. To check the problem,
VIF and CC were used for continuous and dummy variables, respectively. As shown in
Appendix Table 1 and 2, there was no serious problem of multicollinearity. The test indicated
that, the largest VIFs value is 2.21 and that of CC is 0.5871 which are below the maximum
value of 10 and 0.75 respectively as the rule of thumb for the presence of multicollinearity

The probit model was employed to identify factors influencing adoption of improved wheat
varieties by smallholder farmers in the study area. The chi-square (χ2) distribution was used as
the measure of overall significance of a model in probit model estimation. Hence, the adoption
decision of improved wheat varieties by households is best explained by the probit model. The
specification of the model is significant for the estimation of determinants of adoption of
improved wheat varieties implying that the null hypothesis that all slope coefficients are zero
does not hold true at 1% statistical error.

The results of the model show that out of the twelve variables included in the model, nine
variables were found to be significantly affecting the likelihood of adoption of improved
wheat varieties in the study area. The binary probit model outputs showed that sex of
household head, land holding size, live stock holding size, frequency of extension contacts,
educational level of household head, access to credit, access to market information, Perception
 49

on yield capacity of improved wheat varieties, and farmers membership to cooperative are the
significant factors that affecting the probability of adoption of improved wheat varieties in the
study area (Table 11). They are discussed one by one as follows:

Sex of household head: As it was hypothesized, the result of probit regression showed that,
there was a positive and strong significant relationship between sex of the household head and
adoption of improved wheat varieties at 10 % significance level (Table11). Accordingly, male-
headed households were more probable to adopt improved wheat varieties by about 23.6%
higher than that of their female counterparts. This could be attributed to various reasons
related to the economic or social status of female-headed households, such as shortage of
labor, limited access to information and required inputs. Moreover, culturally reproductive
role, such as food preparation and child care are considered as duties of females in the rural
area that brought the work load on them. In congruent with the finding; Aman et al. (2014)
and Tesfaye et al. (2015) in Ethiopia concluded that there were gender gaps in land ownership,
family size, asset ownership and farm income in agricultural production.

Land holding size: The size of land holding was hypothesized to affect adoption of improved
wheat varieties positively. Similar to the expectation the model result showed positive and
significant influence of land holding size on adoption of improved varieties at 5% significance
level (Table11). Other variables held constant, an increase in total land holding by 1ha would
result in an increase in the probability of adoption of improved wheat varieties by 16.7%. This
result showed that farmers who have relatively more land holding are more likely to adopt
improved wheat varieties than farmers who have smaller land holding size. The probable
reason for this was a farmer with larger farm size means relatively harvest more thus more
money flow into the family. Moreover, larger farmers have more likely to be better informed,
allow their land for multiple crops, be able to take risks associated with adoption of new
technologies and practices and have more opportunity to experiment new technologies with
large size farms. This result is consistent with the findings of Chilot and Dawit (2016) and
Sisay (2016).

Education level: Education was expected to influence the adoption of improved wheat
technology by smallholder farmers positively on the assumption that household heads
education level is one of the most important indicators of human capital. The result shows that
 50

education has a positive and significant influence on adoption of improved wheat varieties at
5% significant level (Table11). The reason may be educated farmers may have relatively more
access to information and become aware to new technology and this awareness may enhances
the adoption of improved wheat varieties than illiterate farmers. Keeping other variables
constant, as farmers formal education increase in a year the probability of adoption of
improved wheat varieties would increase by 14.3%. The result of the model and qualitative
data were coincide each other in this study. The focus group discussants and key informants
indicated that, educated households are more eager for a change and understand information
and advises delivered by extension agents easily. According to them, literate households adopt
inputs and apply them according to the recommendation. Similar to this, studies by Sisay
(2016) and Mantegeb (2018) found a similar result in their research findings.

Access to credit: Farmer’s access to credit was expected to influence the adoption of
improved wheat technology by smallholder farmers positively on the assumption that access to
credit improves the financial capacity of improved wheat varieties producing farmers to buy
modern inputs, thereby increasing production. As expected the model result showed positive
and significant effect of credit access on farmer’s adoption of improved wheat varieties at 5%
significant level (Table11). Households, who have access to credit, are more likely to adopt
improved wheat varieties in the study area. From this result, it can be stated that those farmers
who have access to formal credit are more likely to adopt improved wheat varieties than those
who have no access to formal credit. This explanatory variable accounts for 12.9% of the
variation in adoption of improved wheat varieties keeping other factors constant. This might
be because the provision of agricultural credit from formal institution is supported by
awareness creation, training and have good communication with DAs in order to achieve the
credit-desired goals. Credit relaxes the financial burden of a farmer; it goes a long way
towards facilitating crop production and farm productivity by enabling the farmer to use
improved cultural practices and technologies and thereby improve household income.
Therefore, strengthening and expansion of credit institution in to rural area is a crucial
importance to address credit needs of farming community. A study by Hassen (2014), Negera
and Getachew (2014), Berihun et al. (2014) and Mantegeb (2018) found similar results.
 51

Livestock holding size (TLU): Livestock are important source of income, food and traction
power for crop cultivation generally in Ethiopia and particularly in the study area. The model
result showed positive and significant influence of livestock holding on adoption of improved
wheat varieties at 1% significant level (Table11). Results of marginal effect analysis show that
a unit increase in tropical livestock unit increases the decision of improved wheat varieties
adoption by 17.7% keeping the other factors constant. This is because farmers with relatively
more livestock unit make use of their income obtained from sale of livestock and their
byproducts for the purchase of improved seed and other inputs for cultivation of wheat grain.
In addition, livestock, particularly oxen, are used for draft for different farm operations. The
other most important livestock mentioned by group discussant was donkey. In the study area
farmers use donkey for transportation of different farm inputs like compost, cow dung and
other manures from their home to the farm at difference distances using cart. Especially during
off-season rain, farmers use this machine to collect their farm products and livestock feeds
within a short time to save it from unnecessary damage. This implies that being owner of more
livestock unit increase the probability of adoption of improved wheat varieties. The study is
supported by Hassen et al. (2012), Berihun et al. (2014), Tolesa (2014), Leake and Adam
(2015) and Sisay (2016) which confirmed the same results.

Frequency of extension contact: An extension advice is an important tool for building the
managerial capability of household head. Households which receive frequent extension advice
related to wheat production were hypothesized to adopt improved wheat varieties than those
who made less extension contact. As it was hypothesized, the result showed that frequency of
extension contacts positively and significantly affected adoption of improved wheat varieties
at 1%significant level (Table11). Keeping other variables constant, for each additional day a
farmer made contact with extension agent, will increase the probability of adopting the
improved wheat varieties by 24.4%. The result indicated that farmers who have more contact
with extension agent have more probability of adopting this technology compared to those
who have less contact. This is due to the fact that, frequency of contacts with extension agents
increases the probability of acquiring up-to-date information on improved wheat varieties and
build their knowledge for using these varieties. This result is cohesive with what focus group
discussants said that, farmers who have more frequency of extension contacts with
development agents update themselves on the availability and arrival of improved wheat
 52

varieties and aware of its application techniques than those less visited by development
workers. This result is consistent with Teklemariam (2014), Victor (2016) and Mantegeb
(2018).

Access to market information: Market information access from different sources on price of
farm input and output of improved wheat varieties was expected to influence farmer’s
adoption decision in improved wheat varieties. Similar to the expectation the model result
showed positive and significant effect of market information access on farmer’s adoption of
improved wheat varieties at 1% significant level (Table11). This variable accounts for a
variation in adoption of improved wheat varieties by 16.6% keeping other factors constant.
This is due to the fact that price attracts farmers and can change farmers’ decision and also
Smallholder farmers require proper and adequate market information in order to plan their
activities, make choice of the inputs and use technologies and eventually decide when and
where to sell their products. This result goes along with the study done Negera and Getachew
(2014).

Increasing production and productivity wheat crop through promoting improved wheat
varieties to smallholder farmers alone cannot benefit farmers unless they incentified through
better market price for the increased wheat products from adoption of improved wheat
varieties. This depends on the relevant market information the farmers had from different
sources. In relation to this variable, the information collected through in-depth discussion with
one of the model farmer as a key informant was presented as follow: I have been producing
improved wheat varieties for the last 15 years. Every year I use improved seeds and other
farm inputs according to the instruction given from development agents. Always I produce
wheat and other crops depending on the market information I had from direct market
observation and listening Medias transmitted from local and national level on program
related to agriculture. This information enabled me to buy inputs like improved seed,
fertilizers and other chemicals timely before it become scarce in the market and similarly I sell
my product at better prices by storing it for some months after harvesting. From this narration,
one could understand the power of having relevant and timely information on inputs and
outputs of improved agricultural technologies in enhancing farmer’s adoption decision for
those technologies.
 53

Perception on yield capacity: Farmer’s perception on yield capacity of improved wheat

variety was positively and significantly influenced adoption decision of improved wheat
varieties at 1% significance level (Table11). Keeping other variables constant, a farmer who
perceives yield capacity of improved wheat varieties is higher than that of local varieties have
a chance to make a decision to adopt the improved wheat varieties by 25.5%. Concerning with
the perception of farmers towards certain attributes of improved wheat varieties the focus
group discussants result also revealed that farmers in the study area seek specific varietal
attributes, such as yield potential, tolerance to disease, better wheat grain price and short
maturity period. This result is consistent with the findings of Ermias (2013), Bayissa (2014)
and Mantegeb (2018).

Membership to cooperative: farmer’s membership to organizations like cooperative was

expected to positively influence farmer’s adoption of improved wheat varieties. Similar to the
expectation the model result showed positive and significant effect of cooperatives
membership on farmer’s adoption of improved wheat varieties at 1% significant level.
Keeping other variables constant, being member of cooperative increases the probability of
adopting improved wheat varieties by 22.7 % (Table11) .A probable reason for this result
relates to the fact that farmer’s cooperatives provide information sharing platforms between
farmers about the price, profitability, status of the new technology for member farmers and
members can easily access to credit and essential agricultural inputs such as improved seeds,
chemicals, and fertilizer. This result is consistent with the findings of Aman and Tewodros
(2016), Mengistu et al. (2016).and Mantegeb (2018).
 54

Table 11.Estimated results of probit model likelihood of adoption of improved wheat varieties
Variables Coefficient Robust.Std.Err P>z Marginal effects
Sex of household head (1=male) 0.533* 0.377 0.087 0.263
Farming experience(year) 0.008 0.015 0.136 0.007
Educational level(year) 0.275** 0.136 0.028 0.143
Distance to market center(km) -0.0513 0.038 0.129 -0.0201
Family size (AE) -0.0097 0.045 0.942 -0.007
Land holding size(ha) 0.423** 0.292 0.025 0.167
Livestock holding size t (tlu) 0.193*** 0.058 0.007 0.177
Access to credit(1=yes) 0.892** 0.443 0.032 0.129
Frequency of extension contact(day) 0.6221*** 0.160 0.008 0.245
Access to information (1=yes) 0.971*** 0.321 0.004 0.166
Perception on wheat variety(1=yes) 1.438*** 0.318 0.000 0.255
Membership to cooperative(1=yes) 1.146*** 0.286 0.006 0.227
Constant -2.674*** 0.832 0.005
Number of observation 202
Wald chi2 (12) 52.15***
Prob> chi2 0.0000
Pseudo R2 0.3047
Log pseudo likelihood -87.10
*, ** and *** indicates significant at 10 %, 5%, and 1 % significance levels, respectively
Source: Own survey 2019.

4.5. Impact of Adoption of Improved Wheat Varieties on Farm Income

By employing the binary probit regression model, the important variables explaining
propensity of participation in improved wheat varieties adoption were identified. The results
showed that important explanatory variables which were hypothesized to affect in improved
wheat varieties adoption was computed from propensity of adoption. The contributing of those
variables on the dependent variable and could be those that sex of household, land holding
size, education level, livestock holding size, frequency of extension contacts, access to credit,
access to market information, Perception on yield capacity of improved wheat varieties and
membership to cooperatives would ease participation in the adoption of improved wheat
varieties.
 55

4.5.1. Matching adopters and non-adopters

Before launching the matching task, there are certain main tasks that should be accomplished.
The estimation of predicted values of improved wheat varieties adoption participation
(propensity scores) for all participant and non-participant households would be accomplished
from the propensity of adoption. A common support condition should be imposed on the
propensity score distributions of the households with and without the program (improved
wheat varieties). After this, discarded observations whose predicted propensity scores fall
outside the range of the common support region would be accomplished and at last sensitivity
analysis should be done in order to check whether the hidden bias affects the estimated ATT
or not.

Matching of treated and control households was carried out to determine the common support
region. The basic criterion for determining the common support region is to discard all
observations whose propensity score is smaller than the minimum propensity scores of
adopters (treated) and larger than the maximum of the (control group) non-adopters (Caliendo
and Kopeining, 2008). That is, excluding all observations out of the overlapping region.

As shown in Table 11, the estimated propensity scores vary between 0.0687 and 0.9898 with
mean of 0.6568 for treated sample households and between 0.0011 and 0.9688 with mean of
0.3269 for control sample households. Thus, the common support assumption is satisfied in
the region of [0.0687-0.9688] for sample households. This means that households with
estimated propensity scores less than 0.0687 and greater than 0.9688 are not considered in the
matching undertakings. As a result of this restriction, 27 sample households (2 treated and 25
untreated households) were discarded and 175 sample households were identified to be
considered in the estimation process (Table 12).

Table 12.Distribution of estimated propensity scores for sample households

Group Mean STD Min Max
Treated households 0.6568 0.2411 0.0687 0.9898
Untreated households 0.3269 0.2335 0.0011 0.9688
Total households 0.4755 0.2369 0.0011 0.9898
Source: Own survey, 2019
 56

4.5.2. Choice of matching algorithm

Choice of matching algorithm was carried out from kernel bandwidth, nearest neighbor
matching, radius caliper methods. The choice of estimator based on three criteria; a matching
estimator, which balances more independent variables, has low pseudo R2 value and results in
large matched sample size, was chosen as being the best estimator of the data. Accordingly,
nearest neighbor matching method was found to be the best estimator for the data at hand on
the farm income of sample households. Relatively, this estimator (NNM 3) resulted in lowest
pseudo R2 (0.031) value, well balanced covariates, and large number of matched sample size
that were 89 treated and 86 untreated with a total of 175 sample households by discarding only
27 unmatched households (Table 13).

Table 13.Performance of matching estimators

Matching Algorithm Performance
2
Pseudo R No. of matched observation Balancing test*
Nearest neighbor(3) 0.031 175 12
Radius matching (0.1) 0.036 175 12
Kernel matching(0.25) 0.039 175 12
*Number of explanatory variables with no statistically significant mean differences between
the matched groups of adopter and non-adopter households after matching.
Source: own survey, 2019

After choosing, the best performing matching algorithm (NN) the next task is to check the
balancing of propensity score and covariates. The t-test suggests that differences in household
characteristics between the treatment and control groups are jointly significant before
matching. The main purpose of the estimation of propensity score is to balance the
distributions of relevant variables in both treatment and control groups but not to obtain a
precise prediction of selection into treatment.

Table 14 displays results of balancing test of the covariate by comparing the before and after
matching algorithm significant differences. Before matching, there were some variables,
which were significantly different for the two groups of respondents. However, after matching
some of these significant covariates were conditioned to be insignificant which indicates that
the balance was made in terms of the covariates between treatments and untreated.
 57

Table 14.Propensity score and covariate balance between adopters and non adopters
Variables Before matching (N=202) After matching(N=175)
Treated Control(n=111) T-value Treated Control T-
(n=91) (n=89) (n=86) value
Sex of households head 0.95 0.94 0.35 0.93 0.96 0.36
Farming experiences 20.33 19.79 -1.15 20.86 20.51 0.83
Educational level 4.34 3.36 -1.65* 3.87 3.71 0.75
market distance 5.3 8.6 7.23*** 5.75 5.23 0.25
Family size 4.17 4.35 -0.18 7.54 7.46 0.63
Land holding size 4.20 3.14 4.8*** 3.61 3.54 0.81
livestock holding size unit 8.39 5.42 6.01*** 5.55 5.82 0.67
Access to credit 0.07 0.06 0.31 0.08 0.05 0.53
Extension contacts 20.48 12.97 3.63*** 18.92 18.78 0.72
Access market information 0.87 0.63 3.82*** 0.87 0.90 0.46
Perception on yield capacity 1.21 1.79 7.22*** 0.93 0.97 0.80
Membership to cooperative 0.96 0.94 -0.72 0.97 0.95 0.78
*, ** and *** indicates significant at 10 %, 5 % and 1% significance levels, respectively.
Source: own survey, 2019
The low pseudo-R2 and the insignificant likelihood ratio tests support the hypothesis that both
groups have the same distribution in covariates after matching (Table 15). The results clearly
show that the matching technique is capable to balance the characteristics in the treated and
control group’s comparison. It was used to evaluate the effect of the adoption of improved
wheat varieties among groups of households having similar observed characteristics that
compare observed outcome for treatments with those of a comparison group sharing a
common support.

Table 15.Tests for the joint significance

Sample Pseudo R2 Wald/LR chi2 Prob> chi2
Unmatched 0.34 52.15 0.0000
Matched 0.031 3.08 0.128
Source: own survey, 2019
All of the above tests suggest that the matching algorithm chosen is relatively the best for the
data at hand. Thus, this study has chosen NN (3) matching method as the best estimator and
then proceed to run the ATT estimation with this best choice estimator.
 58

4.5.3. Treatment effect on the treated (ATT)

The study focused on impact of improved wheat varieties adoption on the annual farm income
of household. Results from AAT analysis on farm income of smallholder wheat producers
showed positive annual farm income differences between the adopters and non-adopters of
improved wheat varieties. The annual farm income of adopter households is Birr 62298.47
while those non-adopters earned Birr 50189.17 on average basis. There is also positive and
significant mean difference in annual wheat crop income between the two groups. The annual
wheat income that earned from sales of wheat grains is Birr 23478.12 for adopters while it is
Birr 15294.67 for non adopters. The impact analysis of the PSM result, after controlling for
pre-intervention differences of the adopter and non-adopters of improved varieties, showed
that the total farm income of adopters has been increased by 24.12% (Birr 12110.3) and that of
wheat crop income of adopters has increased by 34.8% (Birr 8183.45) on average basis. The
independent t-test result (t=2.81) shows that there is statistically significant mean difference
annual farm income between the two groups at 1% significance level, implying that the
adoption decision of households for improved wheat varieties has resulted in an increase in
farm income of treated households over control group (Table 16). This result is in agreement
with the findings of other researchers on the farm income impacts of improved agricultural
technology adoption by Hagos (2016), Moti et al (2016), Zenaye (2016) and Yitbarek (2017).

Table 16.Treatment effect on farm income (ETB)

Outcome Sample Treated Controls Difference S.E T-stat
Annual farm income Unmatched 64296.2 48652.83 15643.37 4273.20 3.66***
(birr) ATT 62298.47 50189.17 12110.3 4309.71 2.81***
Annual wheat crop Unmatche 26748.53 18291.65 8456.88 3132.17 2.7***
income ATT 23478.12 15294.67 8183.45 3088.09 2.65***
*** indicates significant at 1% significance levels.
Source: own survey, 2019

4.5.4. Sensitivity analysis of the estimated ATT

There may be hidden biases against the result of matching estimators and hence testing
robustness of the result is recommended. As it is not possible to estimate the magnitude of the
selection bias with non-experimental data, the problem can be addressed through using
sensitivity test. The basic issue in testing sensitivity is to check whether the treatment effect is
due to unobserved factor or not. Table 17 revealed the sensitivity analysis of the outcome ATT
 59

values of farm income to the confounders. As it clearly realized from the table, the
significance level is unaffected even if the gamma values are relaxed in any desirable level,
shows that ATT is insensitive to external change. Thus, it can be concluded that the impact
estimates (ATT) are insensitive to unobserved selection bias.

Table17.Sensitivity analysis of the estimated ATT

Gamma sig+ sig-
1 0 0
1.25 0 0
1.5 1.3e-12 0
1.75 8.9e-14 0
2 2.2e-10 0
2.25 2.6e-11 0
2.5 1.8e-09 0
2.75 9.3e-09 0
3 3.7e-08 0
Source: Own survey, 2019
 60

5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1. Summary and Conclusions

This study was initiated to fill the gap of information on what factors influence adoption of
improved wheat varieties, and adoption impact on the farm income of smallholder households
in Gololch district. Cross-sectional data were collected from sample of 202 farmers selected
through multistage sampling method following probability proportional to sample size
techniques. Descriptive statistics and econometric data analysis methods were employed. The
survey result showed that 45% of sample household heads were adopters of improved wheat
varieties in 2018/19 production year. The study identified the key factors that influencing
farmer’s adoption process in the study area. The prominent variables were categorized as
household personal and demographic, socio-economic, institutional and psychological factors.

Comparisons of the main features of farmers from descriptive statistics results revealed that
adopter sample households relatively more educated than non-adopters; have more frequency
of extension contacts, owning more land holding, tropical livestock unit, and slightly less
family size in the study area. In addition, adopters have better accessibility to market
information, and good perceptions towards certain attributes of improved wheat varieties (high
yield per unit area, better market price, short maturity, resistance to diseases) as compared to
no adopters groups.

The probit model results showed that the contributing factors on the probability of adoption of
improved wheat varieties were sex of households head, land holding size, tropical livestock
unit, frequency of extension contacts, access to to market information, perception of farmers’
towards attributes of improved wheat varieties, and farmers’ membership to cooperatives
found to be the most pertinent in the study area. The results revealed that factors such as
educational level, land holding size, and, access to credit service influenced the decision to
adopt improved wheat varieties positively and significantly at 5 % significance level whereas
variables like tropical livestock unit, frequency of extension contacts, access to market
information, perception of farmers toward improved wheat varieties attributes and
membership to cooperative have more influence on farmer’s decision in adoption of improved
 61

wheat varieties positively and significantly at 1 % significance level. Whereas deviated from
most of previous studies, variables like family size, farming experiences of household head
and distance from market center did not have effects on adoption of improved wheat varieties
by smallholder farmers in the study area.

The impact of adoption of improved wheat varieties on farm income of smallholders’ was
analyzed based on sample of matched treated and control groups. A propensity score matching
approach was used to compare adopter households with non-adopters in terms of their farm
income. From the nearest neighbor matching method, the estimated ATT found that adoption
of improved wheat varieties had positive impact on the farm income of treated farmers. The
treated sample households were found to have a better farm income than the untreated
(control) sample households. Therefore, the adoption of improved wheat varieties was found
to have a positive impact on the adopter’s farm income. Hence, encouraging farmers towards
improved wheat varieties adoption is necessary.

5.2. Recommendations

Based on results of descriptive statistics and the econometrics models, recommendations are
suggested for future research, policy and development intervention activities to promote
adoption of improved wheat varieties so as to improve farmers’ income from farm activities.
Therefore, the following recommendations were generalized based on results of this study:

Sex of the household head affected adoption of improved wheat varieties positively; entailing
male headed households adopted more than female-headed households. This is due to the fact
that male-headed households had more access to resources such as land, capital and
information than their female counterparts. Therefore, the policies should aim at supporting
the female-headed households through creating awareness for the community on the gender
division of labor to share partly the domestic work laid on the shoulder of females. Enabling
them to have equal right to control over resource, thereby, increase women’s access to asset
and enhancing their knowledge in wheat production through training so as to improve their
participation in improved wheat variety production.
 62

Land is a limiting factor of production in agriculture. Farmers with more land are more likely
to adopt and allocate a relatively higher share of their land for improved wheat varieties. Thus,
adoption becomes more difficult in the farms with relatively small land size. However,
increasing the size of landholding cannot be an option to increase improved wheat varieties
adoption since land is a finite resource. But in Gololcha district there are some households
who have large farm size without using it for production of improved wheat varieties and other
related high yielding crop varieties. On the other hand there are some farmers who constrained
by lack of enough farm land to expand their production in improved wheat varieties. The
results from both focus group discussants and key informants revealed the absence of strong
legal procedure that facilitates land rent between the farmers, therefore, the policy should
improve farmers’ access to land through encouraging farmers’ participation in land renting
markets by setting rule and regulation as it can allow the transfer of land from less efficient
farmers to better efficient farmers. But on top of all, intervention aims to increase productivity
of wheat per unit area of land by proper utilization of land resource and promoting
technologies that would increase productivity of wheat is a better alternative solution to
enhance smallholder adoption of improved wheat varieties.

Livestock holding is also an important determinant of adoption of improved wheat varieties.

Therefore, appropriate livestock packages need to be introduced and promoted in the study
area in order to make farmers accumulate capital as a cattle and design household assets
building mechanisms. This may be, for instance, through improved veterinary service, feed
and water development as deemed necessary.

It was also learned that, within the study area education was positively and significantly
related to adoption. This indicates that literacy campaigns and adult education strategies must
be designed and implemented to improve the households’ literacy level.

Membership to farmer’s cooperatives has a significant positive influence on the adoption of

improved wheat varieties. Thus, it is important to strengthen the existing farmer cooperatives
to reinforce farmer-to-farmer knowledge sharing through providing awareness creation,
incentives and providing various facilities such as offices and stores by the regional and local
government. Institutions like cooperatives play an enormous role in disseminating
technologies such as improved seeds and fertilizers, and in providing information for farmers
 63

in order to disseminate technologies and further attempts to address farmers through

cooperatives, therefore, play great roles in enhancing adoptions of technologies.

As revealed by focus group discussants and key informants market related problems like high
cost of farm inputs and low price of farm outputs and timely availability of farm inputs with
the required quality are the major bottleneck of improved wheat varieties production in the
study area. Similarly, from the model result, market information accessibility is one of the
major factors influencing farmer’s decision in adopting improved wheat varieties in the study
area is found to be one of the key areas of intervention to enhance farmer’s adoption of
improved wheat varieties. This can be achieved through developing wheat marketing channels
in which the farmers can participate in both the input and output sides of wheat production as
cooperative/union is very important. Therefore, it recommended that different stakeholders at
zonal and woreda level in general and Gololcha distict office of agriculture, development
agents and farmers institutions/organizations in the district in particular, should take measures
for the initiation and development of effective wheat marketing channels to enhance farmers
adoption of improved wheat varieties in the study area.

Frequency of extension contact is found to be an important determinant of the adoption of

improved wheat varieties by households. Contact of extension agent with farmer was limited
in the study area. This is because of development agents spending more time in non-
agricultural activities. Therefore, it is recommended that providing non-overlapping and
congruent responsibilities to extension workers. Effective and efficient evaluation mechanism
should be launched to monitor and evaluate the activities of development agents and their
performance in order to advance adoption of improved wheat varieties in the study area

Credit access had significant and positive impact on adoption of improved wheat varieties in
the study area. Thus, the credit facility should be accessible and target poor farmers especially
those who were not adopting the technologies due to lack of operating capital. This may
encourage farmers to do commercial farming practice in which they can build their asset to
implement adoption of improved wheat varieties in their farms. Therefore it is recommended
credit organizations should provide credit service to farmers at an affordable rate of interest
and credit collateral condition to increase adoption of improved wheat varieties.
 64

Perception on yield capacity significantly and positively affected adoption of improved wheat
varieties, implying that it is important to take farmers’ preferences into consideration in the
design of a research and development program. Thus, research centers and extension system
has to give more attention to participatory research which considers farmers’ priorities and
needs

Adoption of improved wheat varieties was found to have a positive impact on household
income for the target group as investigated in this study. Hence, encouraging farmers towards
improved wheat varieties adoption is necessary. Thus, all stakeholders, especially the
agricultural extension service need to carry out more promotion of the improved wheat
varieties for visible impacts through the development of appropriate mechanism in input
delivery, processing facilities and creating market opportunities.
 65

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7. APPENDICES
 76

7.1. Appendix I. List of Tables in the Appendices

Appendix Table 1.Variance of inflation factor (VIF) for continuous variable
Variable VIF 1/VIF
Farming experience 1.32 0.755190
Total land holding 2.21 0.454544
Frequency of extension contact 1.92 0.520866
Market distance 1.80 0.555668
Family size 1.25 0.798049
Livestock ownership 1.73 0.579079
Educational level 1.14 0.874088
Mean VIF 1.62
Source: Own survey, 2019
Appendix Table 2.Contingency coefficient test for dummy variables
Variables SEX CRED ACCMI COOPM PERYCP
SEX 1.0000
CRED 0.4310 1.0000
ACCMI 0.5871 0.1842 1.0000
COOPM 0.3351 0.4507 0.1206 1.0000
PERYCP 0.4177 0.0194 0.3906 0.2089 1.0000
Where, CRED = Access to credit, ACCMI = Access to market information, COOPM =
Membership to cooperative institution, PERYCPT= Perception on yield capacity by sample
households.
Source: Own survey, 2019
Appendix Table 3.Conversion factor of number of household members in to adult equivalent
Age group (years) Male Female
< 10 0.6 0.6
10 –13 0.9 0.8
14 –16 1 0.75
17 –50 1 0.75
> 50 1 0.75
Source: Adopted from Samuel and Sharp, 2008
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Appendix Table 4.Conversion factor used to estimate tropical livestock unit (TLU)
Animal category Conversion factor
Calf 0.25
Weaned Calf 0.34
Donkey (Young 0.35
Donkey (adult) 0.70
Camel 1.25
Heifer 0.75
Sheep and Goat (adult) 0.13
Caw and Ox 1.00
Sheep and Goat young 0.06
Horse 1.10
Chicken 0.013
Source: Storck et al. (1991)
Appendix Table 5.Reasons why households not received credit
Reasons Percent
Fear of ability to repay 10.2
High interest rate 6.3
Have enough own capital 4.3
Lack of collateral 3.5
Religious case 3.2
Enough money is not given 1.5
Grouping lending/Not given individually 2.5
No credit facility 3.2
Total 29.3
Source: Own survey, 2019
Appendix Table 6.Yield capacity of different improved wheat varieties in the study
Local variety Mean yield of local variety (qt/ha
Hidase 53.2
Improved wheat varieties Mean yield of of Yield advantage of improved wheat
improved wheat varieties varieties over the local variety (%)
(qt/ha
Sannate 64.5 20.56
Oborra 61 14.02
Ogolcho 54.5 1.3
Source: Own survey, 2019
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7.2. Appendix II. List of Figures in the Appendices

Appendix Figure 1.Seed colours of some improved wheat varieties

Source: Gololcha District Office of Agriculture.

Common support region

psmatch2: Propensity Score

Pscore after matching

All sample households
Treated households
Control households

Appendix Figure 2.Kernel density of propensity score distribution for sample households
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7.2. Appendix II. Farm households interview schedule

Code______________ Date of interview_______________

Adoption of Improved Wheat Varieties and Its Impact on Farm Income of Smallholder
Wheat Producers in Gololcha District of Bale Zone
The purpose of this questionnaire is to collect data for the master thesis research entitled
above. Your response to this questionnaire will be an input for the success of the study. The
investigator wants to make sure that your participation is totally voluntary and information
collected through this questionnaire will be used only for academic purpose and will be kept
confidential. Therefore, you are kindly requested to give genuine response freely.

Thank you in advance for your cooperation

PART I. General information

1.1. Woreda: Gololcha: Kebele _______________________________
1.2. Interviewer’s Name_________________________, signature ______________________
PART II. Household demographic characteristics (encircle for multiple choices).
2.1. Sex of household head; 1) Male 2) Female
2.2. Age of household head _____________year
2.2. Wheat Farming experience of the household head _____________year
2.5. Literacy status of household head in years of schooling _________, write 0 for
illiterate____ and 1, for those who can read and write________
2.6. Household size: male_____, Female______, Total __________
2.7. On the following table please tell me the number and age of your family member based on
the question in 2088/19
Questions Male Female Total
Number of children under 10 years
Number of children [10- 13]
Members between [14 - 16]
Members between [17- 50]
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Members above 50
The symbol [ ] indicate the lower and upper limit number in each category should be included

PART III. Household asset (resource) ownership

3.1. Did you have your own land? 1) Yes. 2) No
3.2. If your answer is yes for question #3.1. How many hectare it is? -------ha
3.6. Did you own livestock? 1) Yes 2) No
3.7. If your answer for question #’3.6’ is yes please fill the requested information here below
Animal category Number Number you Unit price Total TLU Total
you owned sold in (on average) value TLU
2017/18
Oxen
Cow
Weaned calf
Bull
Heifer
Sheep young
adult
Goat young

adult
Donkey young
adult
Mule
Horse
Average chickens
HHs rise

3.8. If your answer for question #’3.1’ is yes please fill the requested information here below
on different crop production and annual income generated from the land you owned.
Crop type Production Amount Amount Amount Amount Unit Total
Participation land produced consumed sold kg price/kg income
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in 2017/18 allocated in kg (kg)

1=Yes in (ha)
2= No
wheat
Barely
Maize
Lentil
Pea
Chick pea
Teff
Abish
Faba bean
Emmer
wheat
Vegetables
Fruits

PART V. Institutional Support services related questions

5.1. Have you received credit during 2018/19 cropping season? 1) Yes 2) No
5.2. Did you get credit on time when you want credit? 1) Yes 2) No
5.3. If your answer is yes on Q# 5.1 what are the sources? 1) Bank 2) OCSI 3) private money
lender 4) relatives and friends 5) specify if others___________________________
5. 4. How much was the credit you received in 2018/19 production year? ______birr
1) From bank ______birr 2) fromOCSI_______birr3) from private money lender_____birr
4) from friends and relatives_______birr5) specify if others________birr
5.5. If you haven’t taken credit why? 1) Fear of ability to pay 2) lack of collateral 3) Interest
rate was high 4) Religious case 5) enough amount of credit is not available 6) No credit
facilities 7) If others (specify)_________________
5.6. If your answer is yes on Q# 5.1 for what purposes you took the credit? (Multiple answers
are possible) 1) Purchase of seeds and fertilizer 2) For renting-in land/ hiring oxen 3)
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Starting- up capital for petty trade 4) Purchase of chemicals 5) Purchase of farm equipment 6)
others/ specify__________________
5.7. How did you see the cost of getting credit (In terms of interest and other charges)?
1) Expensive 2) Affordable 3) Cheap
5.8. In 2010/11 did you get agricultural extension service? 1) Yes 2) No
5.9. If yes; how often the development agent has visited your farm in the year 2010/11?
1) Weekly 2) Monthly 3) Quarterly 4) Two times in a year 5) others
specify____________________________________
5.10. How many days you received extension services about wheat production system?
__________day (during sowing and harvesting time) which includes both on-farm visit and
office call
5.11. If yes for Q#5.8, how can the development agent help you for the effective application
offarm inputs?
1) Practical assistance at farm. 2).Demonstration. 3) Training at FTC.4)other (please specify)
_______________
5.12. If yes for Q#5.8, how do you evalatue the assistance given by the development agnetsfor
the successful adoption of farm inputs (improved seed, fertilizer, pesticides, and herbicides,
farming techniques etc)?
1) Excellent. 2) Very good. 3).Good. 4) Poor
5.13. How far is your home from the nearest market that you buy farm inputs (improved wheat
Seed and other inputs) and sell outputs? In distance __________________km
5.14 Are you a member of any social organization? 1) Yes 2) No
5.15 If your answer is yes for Q#5.14, which of the community association do you involve?
Fill your response as requested here below
Social participation 1- if participated, 2 - if not *Service you
get
Equip
Idir
Farming cooperatives/unions
Trade unions
Religious associations
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Females associations
*Service you get1. Loans/credit. 2. Seeds 3 Fertilizer 4 Labour 5 Others (specify
5.16. Do you have access to market information during 2018/19 cropping season regarding
improved wheat varieties? 1. Yes 2. No
5.17 If your answer is yes for Q#5.16, fill your response as requested here below
Issue Accessed information during Main source for 2018/19.
2018/19. (Codes A) (codes B)

Rank1 Rank2 Rank3

1. New varieties of
wheat crops
Output markets and
prices
Input markets and prices
Codes A Codes B.
1. Yes 1. Government extension service.
2. No 2. Farmer Coop or groups

PART VI Detail information on wheat crop

Wheat production related questions
1. Have you ever used improved seed varieties of wheat grain in your farm operation?
Yes No
2. Have you applied fertilizer for wheat production? Yes No
3. Have you ever been utilized chemical inputs like herbicides, pesticides, and fungicides in
production of improved wheat? Yes No
4. If yes for Q#1, 2, 3 why you use these improved farm inputs?
a. Improving yield performance b. increasing income
c. Reducing cost of Production d. improving soil fertility
e. Offsetting environmental effect f. Food security
II. Socioeconomic characteristics
SN Off-Farm Status of engagement() If engaged in, amount of
Activity Engaged in (1) Not engaged in (2) income in Birr / year
1 Shopping
2 Grain trading
3 livestock trading
4 Casual labor
5 Charcoal making
6 Salary employment
8 Brewing
9 Pottery
11 Remittance
13 Other, specify
 84

1. Which type of agricultural inputs did you used for wheat production & what were their
sources in 2018/19?
Type of input Specific Source (√) Do
name Market MoA Research NGO Others not
centers (Specify) Use
Improved Bulala
Varieties Ogolcho
Oborra
Sannate
Hidase
Fertilizers DAP
Urea
Chemicals Fungicide
herbicides
Insecticide

2. Quantity of inputs purchased /used for wheat production and their price in2018/19?
Type of input Specific name Amount purchased/used Unit Total cost
(kg/Lit)(kg price(Birr

Wheat variety 1.
2.
3.
Fertilizers DAP
Urea
Chemicals Fungicide
herbicides
Insecticide
Grand total
2. Which of the following problems do you think are there with inputs used for wheat
production?
Type of input Problems (√) Remarks
Not Available Not Timely Quality problem Expensive
Available
Wheat variety

Fertilizers

Chemicals

Other(specify)
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3. Have you faced marketing problem in selling of your product that produced using improved
farm inputs? 1. Yes. 2. No
4. If your answer is yes for the above question, what is the challenge you faced in selling of
your harvested wheat crops?
1. No surplus product for sale 2. No potential Buyer 3. Distance of market. 4. Poor price
offered 5. Other (please specify)
3. What was the average market price of the wheat price in 2018/19?
Variety of wheat Price at *To whom you
Farm gate market Sell the product
Improved Varieties
Ogolcho53
Oborra
Hidase
Local

*To whom 1) to whole seller 2) to retailer 3) to direct consumers 4)cooperative

5/farmers

4. Do you think the improved wheat varieties are better than local improved wheat varieties in
terms of the following traits (mark <X>)

Attributes of technologies Improved VS local varieties

Superior Same Inferior
Yield potential
Colour
Taste
Drought resistance
Maturity period
Disease resistance
Storability

5. What is your current state in utilizing farm inputs (improved seeds, fertilizers, and
chemicals.) in your wheat production? Put
1-if you started adoption recently; 2-If you continued adoption with increasing rate
3- If you adopting with decreasing rate4- If you terminated adoption
Farm inputs Adoption status *Reasons for stopping
Improved seed
Fertlizer
Chemical (pesticides, herbicides)
Farming techniques (spacing, raw planting, )
* 1) Availability of better variety 2) Unavailability of seeds 3) High seed purchase price
 86

1 What is your level of adoption of the following improved wheat production package
practices by 2018/19?
Subject Name of Area coverage Seed rate(kg)/ha
wheat in ha. Recommended Applied rate by
variety rate farmers
grown
Total land allocated for 1.
improved wheat 2.
3.
4.
Total land allocated for
local wheat

Package practices Recommended Applied *Reasons for not

No rate per ha rateby implementing according to
farmers the recommendation
1 Fertilizer DAP
rate
UREA

2 Chemicals Fungicide
 herbicide
Insecticide
* Reasons 1) I do not know the recommended rate,
2) The recommended rate does not fit with my financial capacity
3) The recommended rate is not superior than our own practice
4) It is labor intensive
5) It does not fit with physical environment (soil, RF pattern)
6) It consumes more time and requires skill
7) Others (specify)-------------------------------------------

Key Production and Marketing Constraints for Wheat Production

1. What are the major problems related to wheat production in your area? (Rank them by
giving one for the most severe
Production constraints Wheat Rank its importance (only those
Constraint? with Yes in column 2)
1. Yes 0. No
Socioeconomic
1. Timely availability of improved seed
2. High price of improved seed
3. Quality of seed
4. Availability of credit to buy seed
5. Timely availability of fertilizer
 87

6. High price of fertilizer

7. Access to markets and information
9. Reasonable grain prices
9. Low price of output
Biological
1. Drough
2 Pests
3. Crop diseases (rusts…
4. Weed infestation

Thank you for your support!!!!!!

Check list for focus group discussion

1. What is the wheat production trend in this district looks like? Explain the major challenges
and opportunities in adopting improved wheat varieties by smallholder wheat producers? Do
you think that both male and female farmers face the same challenges? .If not who? Why?
2. What Farmers understanding about improved wheat varieties and agricultural inputs
utilization looks like in this district? What are challenges in this regard?
3. What kinds of services farmers need from the government body to adopt improved wheat
varieties and produce competitive wheat product in the future?
4. In your view how do you see the prices of inputs used for improved wheat production in
relation to the income generated by wheat produced/sale?
4. What are the major constraints of wheat production in your area? Rank the following
production constraints in pair wise comparisons
S/N Production constraints 1 2 3 4 5 6 7 8 9 10 Score Rank
1 Shortage of rainfall 1 /9
2 change in season of rainfall 1 /9
3 High cost of input price 1 /9
4 Low market price of output 1 /9
5 Shortage of input supply 1 /9
6 Rust disease 1 /9
7 Timely availability input 1 /9
8 Insect disease 1 /9
9 Weed problem 1 /9
10 Soil fertility problem 1 /9

Check lists for key informant interview

1. What are the main food and cash crops grown in this district?
 88

2. What services and assistance do the farmers get from agriculture office?
3. What efforts are done to show the farmers practical experience to facilitate adoption? What
are the challenges and opportunities in this regard?
5. What need to done to solve the problems farmers face in improved wheat varieties
adoption?