Impact of Technology on Smallholder Wheat Production in Bale Highlands of Ethiopia: Application of Output Decomposition Model

Abstract

In Ethiopia, the national agricultural research system has been generating and disseminating different agricultural technologies since its establishment in 1966. Although these technologies are meant to increase agricultural productivity, they have to be evaluated for their impact on production and for the benefit that the farmers get out of them. Hence, the main objectives of this study were to examine the impact of technological innovations on wheat production and to decompose the total change in wheat output resulting from the introduction of new technologies into its constituent parts. Cobb-Douglas production function was employed to estimate the regression coefficients under old variety growers, new variety growers, and pooled data cases. Output decomposition model was applied to decompose the total change in output into its constituent parts. The econometric results of this study indicated that, out of 55% of the observed productivity difference between old and new variety grown plots, technological change and change in associated input levels contributed about 24% and 31%, respectively. Of the 31% increment attributed to input use levels, an increased use of herbicides and fertilizers caused the biggest jump in the productivity of improved wheat varieties (15.5% and 11% respectively). The major implications included the need to exploit the full potential of new varieties using recommended input levels, strengthening the research system, fostering coordinated efforts among various actors in agricultural development, and strengthening the technology instrument in rural development and poverty reduction strategies of the country.