Impact of cluster farming on wheat commercialisation in Ethiopia

Hassen Nurhussen Ahmed, Dawit Alemu, Lemma Zemedu, & Kedir Jemal

Abstract
In Ethiopia, wheat cluster farming has gained popularity in recent years due to its potential to transform the agricultural sector and improve the livelihoods of wheat producers. This study aimed to evaluate the impact of cluster farming on the wheat output and input commercialisation level. The study was conducted in the Amhara region of Ethiopia, using household-level survey data collected from 383 wheat-producing farm households selected through multistage sampling during the 2022/2023 production year. Descriptive statistics and the endogenous switching regression (ESR) model, supported by propensity score matching (PSM), were employed for data analysis. The results of the model show that the education status of the farm household head, access to formal credit services, frequency of extension contacts, distance from rural all-weather roads, wheat farm size, land fragmentation (index), livestock size (TLU), cluster farming awareness and distance of the farm to the nearby wheat cluster farms significantly influence farm household participation in wheat cluster farming. In addition, producing wheat in a cluster farming approach has a positive effect on wheat output and input commercialisation levels, and the PSM result ensures that the results are robust. The estimated average treatment effect on the treated (ATT) for wheat output and input commercialisation was 5.0% and 3.1%, respectively, while the average treatment effect on the untreated (ATU) was 1.9% and 0.4%, and the transitional heterogeneity (TH) 3.1% and 2.6%, respectively. All effects were positive and statistically significant, confirming the positive effect of the cluster farming approach on both wheat output and input commercialisation. Therefore, government and non-government policies and interventions should focus on enhancing smallholder farmers’ participation in wheat cluster farming to improve their livelihoods through increased wheat output and input commercialisation.