Economic Returns of Vertisol Innovation: An Empirical Analysis of Smallholders Mixed Farming in the Highlands of Ethiopia

Abstract

Vertisols are significant soils, which support the majority of livestock and human population in the highlands of Ethiopia. Waterlogging of Vertisols and drainage problems are one of the major problem hindering the workability and the potential of the soils. Packages of Vertisol technology which includes the Broad Bed Maker (BBM), crop variety and dry planting was developed by the Joint Vertisol Project (JYP) team of Ethiopia to ammeliorate the problem. This study was conducted with the broad objective of assessing the profitability and the consequent economic returns from adopting the technology. Both on-farm and household level analysis indicated that the vertisol technology is cost-effective and economically sound. This was verified through marginal analysis and Policy analysis matrix (PAM) of Domestic resource cost comparison and other indicators. The results of the marginal analysis indicated that a marginal increment of close to 300% and 200% for an on-farm and household level respectively can be derived from the use of package of the technology. Although inter-farm variability due to many factors is inevitable, the ORC result confirms, that much more comparative advantages can be gained from the packages of vertisol technology than the traditional practices of the farmer. Apparently, there is an evidence of clear difference observed between on-farm and household level performance owing to mainly the difference in the level of management. The sensitivity result confirms also the performance of the technology can be improved if support policy measures are taken into consideration. In addition the environmental impact of soil conservation is another dimension of advantage that should be considered as positive attribute to the technology.