Impact of Small Scale Irrigation on Household Farm Income and Asset Holding: Evidence from Shebedino District, Southern Ethiopia

Abstract

Irrigation as an agricultural intensification method plays dominant role in increasing agricultural production and productivity. The main objective of this study was to assess impact of small scale irrigation use on household farm income and asset holding. Relevant primary and secondary data were collected to respond to the objectives of the study. The primary data were collected from randomly selected 93 irrigation user households and 103 non-user households drawn based on proportion to population size. Secondary data were collected from review of relevant related literatures. Both descriptive statistics and econometric model were used for analyzing quantitative data of the study. Twelve variables were hypothesized that determine households’ probability of participation in irrigation use and seven of them were found significant. The study has found that age, educational level, contact frequency with agricultural development agent, credit access, access to mass media,  participation in irrigation  related training and livestock ownership were the variables that significantly influence households’ use of small scale irrigation. The result of PSM analysis indicate that participation in irrigation use has increased annual household farm income by 19,474.8 ETB for participant households than non-participant households which is significant at 1% level. Similarly, it has increased their physical asset holding which is measured in Ethiopian birr valued 27,502 ETB at 1% statistically significance level. The sensitivity analysis result showed that the impact results estimated by this study were in sensitive to unobserved selection bias. It was concluded that irrigation has positive and significant impact on annual farm income and asset holding of the rural farming households. Therefore, governmental and nongovernmental organizations working on irrigation should promote irrigation in livelihood improvement procedure.

Keywords: Key Words: Asset holding, Farm income, Small scale irrigation