DETERMINANTS OF AGRICULTURAL PRODUCTIVITY AND RURAL HOUSEHOLD INCOME IN ETHIOPI A

Abstract

I improvements in the agricultural productivity and rural household’s income and identifying the factors contribute to its improvement is very critical for enhancing food security and poverty reduction strategy in Ethiopia. The aim of this paper isto investigate the factors contributing to agricultural productivity and rural households’ income differential in Ethiopia. The study used panel data of Ethiopian socio- economic survey collected by Central Statistical Agency of Ethiopian collaboration of World Bank in the three survey periods of 2012, 2014 and 2016production years. The study was used econometric models derived from Cob- Dogla sproduction function namely: Pooled ordinary least square (within- group) , fixed effects (FE) and random effects (RE) models for labor and land productivity and multiple regression models to identify contributing factors for rural household income differential across regions. And the model output indicated that, irrigation use, number of oxen, non- farm income, and education level of household head, cultivated area, age and amounts of fertilizer used were the significant variables that contribute to farm income differential in the study area. Therefore, the policy implication of the study is that, increasing and proper utilization of the aforementioned variable’s should have get due attention to speed up the enhancement of agricultural productivity and rural household income.