Pattern, Trend and Determinants of Crop Diversification: Empirical Evidence from Smallholders in Eastern Ethiopia

Abstract

Crop diversification is the most important risk management strategies. The study investigated the pattern, trend and covariates of crop diversification in eastern Ethiopia based on data collected from 167 households randomly and proportionately selected. In order to manage risks of drought, pests and diseases, soil fertility decline and input prices variations, farmers in the study areas employ crop diversification as a self-insuring strategy. The farmers are becoming risk-averse which has implications on technology adoption. Tobit model result indicated that farmers with more extension contacts and larger livestock size are likely to specialize whereas those who have access to market information and irrigation, those who own machinery and more number of farm plots are more likely to diversify. In order to promote crop diversification, providing farm machinery through easy loans and improving access to market information and irrigation should be given attention. The extension system should include risk-minimization as a strategy.

Keywords: crop diversification, risk, risk management strategies, risk-averse, Ethiopia.