Rural development (English)

[2L05] Heterogeneous Effects of Horticulture Commercialization and Household Decision-making on Smallholder Farmers' Income: Evidence from a Quasi-Experimental Study in Jimma Zone, Ethiopia

*Asmiro Abeje FIKADU¹, *Hisako Nomura¹ (1. Kyushu University)

Keywords:Ethio-SHEP, Horticulture commercialization, Joint decision-making, Quantile regression, Quasi-experiment

Horticulture commercialization and gender-based decision-making significantly contribute to smallholder farmers' income improvement. While existing literature treats horticulture commercialization and gender-based decision-making as uniform or average effects across all farmers, a few studies indicate heterogeneous effects. Investigating its distributional effects can provide valuable insights for designing targeted interventions to support lower-income farmers. This study investigates the heterogeneous effects of horticulture commercialization on smallholder farmers' income in the Jimma zone. We use data collected through a quasi-experimental design from 610 farmers under the Smallholder Horticulture Empowerment and Promotion (Ethio-SHEP) project implemented by the Japan International Cooperation Agency (JICA).We analyze the heterogeneity of commercialization and gender-based decision-making effects using a quantile regression. The results show that commercialization alone and its interaction effect with treatment (Ethio-SHEP intervention) have a significant heterogeneous impact on horticulture income across all quantiles at a 5 percent significance level. The interaction effects of commercialization and treatment significantly improve the horticulture income of the farm households, ranging from 8,901 Ethiopian Birr (ETB) (159.4US$) to 22,186 ETB (397.3 US$) at 5 percent significance level. This suggests that commercialization contributes significantlys to income improvement of the farm households through Ethio-SHEP intervention. In line with this,the joint decision-makers in the treated group have a positive and significant association with horticulture income compared with men-alone decision-makers in the pure control groups at the 30th quantile, which confirms the hypothesis of the Ethio-SHEP intervention that elucidates farmers' adoption of joint decision-making practices in the context of horticultural product sales instead of men-alone or women-alone decision-making. We further find that the education level of the household head, access to training, cost of chemical fertilizer, pesticide, and herbicide, distance to agricultural cooperatives, horticulture farming experience, land size, and family labor are significant factors that influence the horticulture income. Thus,an effective market-driven extension approach such as Ethiop-SHEP with better infrastructure access is crucial for improving smallholder farmers' horticulture income, as policies addressing the needs of small-scale farming households, especially those actively involved in joint decision-making with low- income levels, are significant.