This article examines the characteristics of and choice among two production technologies in Ethiopian agriculture, one with fertilizer and the other without, using 1989-90 farm-level data. For northwest and central Ethiopia, fertilizer usage determinants are estimated simultaneously with technology-specific production functions. For southern Ethiopia, where fertilizer is rarely used, a single production function is estimated. Three conclusions emerge. First, fertilizer use is not significantly affected by a farm's stocks of capital or land. This is consistent with the fact that fertilizer allocation decisions under the deposed Mengistu regime were politicized to the point where farmers had little control over use. Second, fertilizer is associated with a smaller factor share for cattle and a larger share for land, meaning that those who control land may gain relative to the individual farmers who own cattle as the country develops agriculturally. Third, farms without fertilizer in northwest and central Ethiopia tend to be too small, a problem due to population pressures on the land and communal methods of land allocation. This suggests that land allocation institutions should adjust by distributing land to a smaller but more economically viable number of farmers.
All Science Journal Classification (ASJC) codes
- Agronomy and Crop Science
- Economics and Econometrics