Impact of Participation in Vegetables’ Contract Farming on Household’s Income in the Central Rift Valley of Ethiopia

Gemechu Mulatu^1, , Jema Haji¹, Belaineh Legesse¹ and Mengistu Ketema¹

¹School of Agricultural Economics, Haramaya University, Dire Dawa, Ethiopia

Cite this paper:
Gemechu Mulatu, Jema Haji, Belaineh Legesse and Mengistu Ketema. Impact of Participation in Vegetables’ Contract Farming on Household’s Income in the Central Rift Valley of Ethiopia. American Journal of Rural Development. 2017; 5(4):90-96. doi: 10.12691/ajrd-5-4-1

Abstract

This study analyzed the impact of vegetables’ contract farming on the household’s income using data collected from 423 smallholder vegetable farmers from four districts of the East Shewa zone, central rift valley of Ethiopia. The study combines both quantitative and qualitative data obtained from desk review, an in-depth household interview, and focus group discussions. The propensity score-matching technique was employed for data analysis due to lack of baseline data and non-randomness of participation in contract farming. First, a probit regression model was used to estimate the propensity for matching participants and non-participants. Then, their incomes were compared. Results show that contract farming has a significant positive effect on the incomes of participating households. Given the vegetable production opportunities available in the study area, it is important to address the challenges of vegetable producers to benefit from contract farming and increase their incomes.

Keywords:
vegetables’ contract farming propensity score matching central rift valley Ethiopia

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