DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH

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1 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Orgnal scentfc paper Economcs of Agrculture 4/2016 UDC: :631.86/.862(63) DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Aemro T. Terefe 1, Musa H. Ahmed 2 Abstract The objectve of ths study was to dentfy the mportant factors that nfluence both adopton and level of use of organc fertlzer among smallholder farmers n the Central Rft Valley of Ethopa usng a prmary data collected from 161 sample respondents. An ndependent double hurdle model was used to address the objectves of the study on the assumpton that adopton and level of organc fertlzer use by are two ndependent decsons nfluenced by dfferent factors. Emprcal estmates of the frst hurdle reveals that lteracy status of the head, lvestock holdng, frequency of extenson contact, dstance to market and slope of the plot are statstcally sgnfcant decson varables that affect the probablty of adoptng organc fertlzer. Meanwhle, estmates of the second hurdle revealed that, the extent of use of organc fertlzer was determned by lvestock holdng, access to credt dstance to the market and slope of plot. Ths ndcates that factors that affect adopton are not necessarly the same as those that nfluence ntensty. Therefore, t s mportant to consder both stages n evaluatng strateges amed at promotng the adopton and use of organc fertlzer. Key words: Adopton, Level of use, Organc fertlzer, Double hurdle model, Ethopa JEL: Q16, M24 Introducton Half of the populaton of sub-saharan-afrca (SSA) lves n poverty (AfDB, 2011). Snce majorty of them reles on subsstence agrculture for ther own food and as a source of ncome (Larsen et al., 2014), mprovng the performance of the agrcultural sector s the man pathway out of poverty and to mprove the lvelhood of most of the people n ths regon (Dawson et al., 2016). However, the agrculture sector of most of the SSA countres has not been able to ensure food securty n both at the natonal and the household level (Bezu et al., 2014). Several bophyscal and socoeconomc factors have been dentfed as key 1 Aemro T. Terefe, Lecturer, Haramaya Unversty, School of Agrcultural Economcs and Agrbusness, P.O. Box no. 95, Dre Dawa, Ethopa, E-mal: aemrot@gmal.com 2 Musa H. Ahmed, Lecturer, Haramaya Unversty, School of Agrcultural Economcs and Agrbusness, P.O. Box no. 95, Dre Dawa, Ethopa, E-mal: musahasen@gmal.com EP 2016 (63) 4 ( ) 1265

2 Aemro T. Terefe, Musa H. Ahmed constrants lmtng productvty growth n agrculture n SSA (Msko and Ramsch 2007). Among others, sol fertlty depleton s consdered as the man bophyscal lmtng factor for ncreasng per capta food producton n SSA (Ajay et al., 2007; Beedy et al., 2010). The farmng of SSA s characterzed by poor sol fertlty and low levels of agrcultural technology use (Teklewold et al., 2013). Among countres n the SSA, Ethopa s known for ts structural food nsecurty, poverty, fast populaton growth and accelerated envronmental degradaton (Pender et al., 2007). Currently the agrcultural sector n Ethopa s regsterng remarkable gans; from 2006/07 to 2013/14 producton of cereals ncreased by 45% and productvty grew by 22% (ATA, 2014). Despte these staggerng achevements, there s stll more work to be done. The country remans to be one of the poorest countres n the world. In 2011 alone, Productve Safety Net Program supported 7.4 mllon people, whereas an addtonal 4.5 mllon people were requrng emergency humantaran assstance (FEWS NET, 2011). If the country contnues on ts current productvty path, food nsecurty could clmb to over 50 mllon people, reducng GDP per farmng household by nearly 20% by 2020 (ATA, 2010). Hence, beng an agrculturally dependent country wth a food defct, ncreasng crop producton and productvty s not a matter of choce rather t s a must to attan (Spelman et al., 2010). Agrcultural growth and development s not possble wthout yeld-enhancng technologcal optons snce expandng the area under cultvaton to meet the ncreasng food needs of growng populatons s no longer possble (Kasse et al., 2011).). Hence, Adopton of productvty enhancng technologes s crucal to ncrease agrcultural productvty and reduce poverty. (Becerrl & Abdula, 2010; Mnten & Barrett, 2007). Nevertheless, there s a rsk of a tradeoff between the attempts to ncrease the productvty through modernzaton packages that combne mproved seed varetes wth agrochemcals (such as chemcal fertlzers and pestcdes) and the resultng stress that these have on ecosystem servces. Otherwse not properly utlzed, agrochemcals can cause sgnfcant harm to the envronment and human health (Teklewold et al., 2013). Hence, farmers and polcy makers must turn ther attenton to an alternatve agrcultural technology that uses less agrochemcal. Organc fertlzaton systems can to ncrease crop productvty and ncrease the sustanablty of agro-ecosystems (García-Orenes et al., 2013; Macc et al., 2013). The applcaton of organc fertlzer ncreases sol organc matter content, and ths leads to mproved water nfltraton and water holdng capacty as well as an ncreased sol carbon content (Kasse et al., 2009; Manyong et al., 2006; Grmay et al., 2008). Notwthstandng ts benefts, the adopton rate of organc fertlzer s stll low n Ethopa. For nstance, n 2014/15 producton season only 10.96% of cultvated land was utlzng organc fertlzer (CSA, 2015), even though the country has great potental n ths regard because of surplus labor and huge lvestock potental. Therefore, t s essental to look n to the mportant factors that are affectng farmers decson to adopt organc fertlzer. Although there have been some economc studes on crop-lvestock farmng systems n the past (McIntre et al., 1992), not that many of the prevous studes have dentfed the causal of adoptng organc fertlzer on crop producton on smallholder farms EP 2016 (63) 4 ( )

3 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH The purpose of ths study s, therefore, to dentfy the determnants of adopton and the extent of use of organc fertlzer applcaton on crop producton n Central Rft Valley of Ethopa. Research Methodology Study area, samplng procedure and source The study was conducted n Central Rft Valley of Ethopa specfcally n the Ars Negelle dstrct of Oroma. The sols of the area are lghtweght, frable loam and clay loam. The man crops grown n the area nclude wheat (Trtcum aestvum), maze (Zea mays), teff (Eragrosts tef), barley (Hordeum vulgare), sorghum (Sorghum bcolor) and onon (Allum cepa). Accordng to CSA (2011), Ars Negelle dstrct has a total populaton of 303,223 of whch 150,245 are male and 152,978 are females. The average famly sze for the dstrct was 5.2 (5.3 for urban and 5.1 for rural). The populaton densty of the dstrct was persons per km 2. The data for ths study was generated through prmary and secondary data. Prmary data were collected through a household survey conducted n three peasant assocatons of Ars Negelle dstrct. Then a total of 161 respondents were selected randomly from the three peasant assocatons proportonal to the sze of the populaton n each of them. EP 2016 (63) 4 ( ) Emprcal models Farmers adopton behavor especally n developng countres s nfluenced by a complex set of soco-economc, demographc, techncal and nsttutonal factors. Hence, modelng farmers response to organc fertlzer adopton has become mportant both theoretcally and emprcally. Our data shows that farm households n Ars Negelle dstrct dffer n the proporton of usng organc fertlzer. Some sample households are non-adopters of organc fertlzer; the dentfed use of organc fertlzer for such households s equal to zero. Zero adopton s one of the major problems for any modellng effort to address. As noted n Greene (2003), a dependent varable that has a zero value for a sgnfcant fracton of the observatons requres a censored regresson model because standard OLS results a based and nconsstent parameter estmates. Tobt model developed by Tobn (1958) has been wdely used to deal wth censored observatons. Ths model s employed by many researchers (ncludng Arslan et al., (2014) Kalnda et al., (2014) Obayelu et al., (2016) and Fkru, 2009) because; t has an advantage over other models such as (Lnear Probablty Models, Logt, and Probt) n that, t reveals both the probablty of wllngness to adopt and level of adopton. However, ths model s very restrctve. One reason s that, t attrbutes the censorng to a standard corner soluton. Secondly, Tobt model has been shown to be nadequate to characterze the two processes n adopton: the adopton process and extent of adopton process. Ths s because; any varable, whch ncreases the probablty of non-zero extent, s assumed to also ncrease the mean of the postve adopton, whch s not always reasonable. In prncple, the decsons on whether to adopt and how much to adopt can be made jontly 1267

4 Aemro T. Terefe, Musa H. Ahmed or separately (Berhanu and Swnton 2003). The double-hurdle model, Cragg (1971), can overcome ths shortfall. The double-hurdle model s appled n such a way that, both hurdles (the decson for adopton and extent of adopton) have equatons assocated wth them, ncorporatng the effects of farmer s characterstcs and crcumstances. Such explanatory varables may appear n both equatons or n ether of one. Most mportantly, a varable appearng n both equatons may have opposte effects n the two equatons (Teklewold et.al. 2006). The double-hurdle model s a parametrc generalzaton of the Tobt model, n whch two separate stochastc processes determne the decson to adopt and the extent of adopton of technology. The double-hurdle model has an adopton (D) equaton gven by: Where, * D = The latent varable that takes the value 1 f the farmer uses organc fertlzer and 0 otherwse; Z = Vector of ndependent varables affectng the adopton of organc fertlzer; α = vector of unknown parameters; u = resduals that are ndependently 2 and normally dstrbuted wth mean zero and a constant varance σ ; = 1,2, n. (n s the number of observaton). The second hurdle nvolves an outcome equaton, whch uses a truncated model to determne the level of adopton of an organc fertlzer n queston. Ths second hurdle uses observatons only from those respondents who ndcated a postve value of use of an organc fertlzer. The truncated model, whch closely resembles the Tobt model, s expressed as: Y Y * * * Y f Y > 0 and D > 0 = 0 otherwse = β + ε * X Where Y s the observed response on the extent of adopton of organc fertlzer, X s a vector of explanatory varables hypotheszed to nfluence ntensty of technology use, β s a vector of parameters and ε s the standard error term. The decson on whether or not to adopt organc fertlzer and how much of that organc fertlzer to use can be jontly modelled f they are made smultaneously by the household; ndependently modelled f they are made separately; or sequentally modelled f one s made frst and affects the other one as n the domnance model (John et al., 2009) EP 2016 (63) 4 ( ) (1) (3) (2)

5 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH The error terms, are dstrbuted as follows: µ N(0,1) 2 ε N(0, δ ) The model s sad to be a dependent model f there s a relatonshp between the decson to adopt and the extent of adopton. Ths relatonshp can be expressed as follows: (4) Cov( µ ε ) ρ = (5) Var( µ ) Var( ε ) If ρ = 0 and there s domnance (the zeros are only assocated to non-adopton, not standard corner solutons) then the model decomposes nto a Probt for adopton decson and truncated for the ntensty of adopton on organc fertlzer (John et al., (2009)). Followng Smth (2003) we assume that the error terms µ and ε are ndependently and normally dstrbuted. Fnally, the observed varable n a double-hurdle model s Y = D Y * The Log lkelhood functon for the double hurdle model s gven by (6) (7) Where φ denotes the standard normal CDF (Unvarate or Multvarate) and ϕ s the unvarate standard normal PDF. Z, X β, α, σ as defned earler. Under the assumpton of ndependent between the error terms µ andε, the model (as orgnally proposed by Cragg, (1971) s equvalent to a combnaton of a truncated regresson model and a unvarate β probt model. The Tobt model arses f λ = and Z=X σ A smple test for the Double hurdle modal aganst the Tobt model can be examned. It can be shown that the tobt log- lkelhood s the sum of the log-lkelhood of the truncated as well as the probt models. Therefore, one smply has to estmate the truncated regresson model, the tobt model and the probt model separately and use a lkelhood rato (LR) test. The LR statstc can be computed usng (Green, 2003). EP 2016 (63) 4 ( ) (8) 1269

6 Aemro T. Terefe, Musa H. Ahmed Where LT = Lkelhood for the tobt model; L P = lkelhood for the probt model; L TR = lkelhood for the truncated model; and k s the number of ndependent varables n the equatons. β β If the test statstcs s wrtten as H 0 : λ = and λ. H σ σ 0 wll be rejected on a specfed level of sgnfcance level, f 2 Γ > c k. Results and Dscusson Descrptve statstcs From annex table the t-test and ch-square statstcs have made for selected varables about adopton status of the surveyed households. From the 161 farm households, 47.32% sample respondents were adopters of organc fertlzers. Average age of sample household head s about 40 and 45 years wth non-adopters and adopters, respectvely. The analyss of the data shows that there s a sgnfcant mean dfference between age of adopters and nonadopters. Famly sze s about fve persons for non-adopters and sx for adopters. Ths smple comparson of the two groups of households s explctly artculated as follows. Table 1. Descrptve statstcs of contnuous varables ncluded n the double hurdle model Varables Non adopter(0) Adopter(1) Total t-test Age of household 39.67(1.42) 45.03(1.69) 43.34(0.87) -2.93*** Famly sze 4.92(0.31) 6.2(0.19) 5.8(0.17) -3.55*** Experence 17.24(1.12) 22.9(1.07) 21.11(0.84) -3.24*** Off/no farm ncome (229.61) (162.24) (132.37) 0.67 Cultvated land 1.27(0.1) 2.27(0.15) 1.95(0.11) -4.36*** Lvestock holdng 4.45(0.64) 11.87(1.41) 9.52(1.02) -3.51*** Extenson contact 34.06(2.4) 46.61(1.2) 42.63(1.21) -5.23*** Dstance to nearest market 4.27(0.32) 3.4(0.15) 3.67(0.14) 2.79 Dstance of plot from home 0.96(0.15) 1.17(0.08) 1.11(0.07) -1.33* Note: Numbers out & n parenthess represent Mean and Standard error, respectvely; *, ** and *** statstcally sgnfcant at 10%, 5% and 1 % probablty level, respectvely. Source: model output based on survey data, 2012/13, N = EP 2016 (63) 4 ( )

7 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Table 2. Descrptve statstcs of dummy varables ncluded n the double hurdle model Varables Adopton decson Total Non adopter(0) Adopter(1) Sex of household Female 2(1.26) 7(4.34) 9(5.6) Male 49(30.42) 103(63.98) 152(94.4) Educatonal status of household Illterate 20(12.42) 46(28.57) 66(40.99) Lterate 31(19.26) 64(39.75) 95(59.01) Credt access χ2(chsquare) No 36(22.36) 74(45.96) 110(68.32) 0.75 Yes 15(9.32) 36(22.36) 51(31.68) Slope of plot Flatter 31(19.25) 92(57.14) 123(76.39) Steeper 17(10.56) 21(13.04) 38(23.61) 0.72 Note: Numbers out and n parenthess represent frequency and percents, respectvely Source: model output based on survey data, 2012/13, N = 161 Econometrc results Independent double hurdle model estmaton assumes that the two error terms from the two hurdles are normally dstrbuted and uncorrelated. Ths mples that the two-stage decson of adopton and optmum organc fertlzer use ntensty are done ndependently by respondents. The result of the model revealed that the error terms were uncorrelated. Ths mples that factors that nfluence farmng households decson to adopt organc fertlzer were unassocated wth the decson varables n the second hurdle nvolvng optmal use of organc fertlzer technology. Ths result confrmed the relevance of the double hurdle model used n ths study. In here, we only dscussed statstcally sgnfcant varables; the rest s annexed n the appendx. EP 2016 (63) 4 ( ) 1271

8 Aemro T. Terefe, Musa H. Ahmed Table 3. Parameter estmates of Cragg s double hurdle model for use of adopton of organc fertlzer use and organc fertlzer use ntensty. Adopton decson (Probt output) Varables Coef. Std. Err. Margnal Effect Organc fertlzer use ntensty (Truncated )output Coef. Std. Err. Margnal Effect Age of the head Educaton 0.100* Famly sze Experence Off/nonfarm ncome Sze of cultvated land Sze of lvestock (TLU) 0.125*** *** Extenson contact 0.058*** *** Tranng Credt * Dstance to the market * *** Plot sze *** Sol fertlty Slope of the plot ** _Cons /sgma ***, ** and * ndcate sgnfcance at 1%, 5% and 10% levels, respectvely. Source: model output based on survey data, 2012/13, N = 161 Educatonal status: As expected, beng lterate household head was postvely and sgnfcantly related to the adopton decson of organc fertlzer at 10%. Ths result s plausble, snce educaton ncreases the capacty of farm households to acqure nformaton and knowledge of organc fertlzer and promote the decson to use t on hs/her farm. The probt model result ndcated that beng lterate farm households head wll ncrease adopton decson of organc fertlzer n crop producton by 17.6 %. Ths mght be due to the fact that an educated farmer would know the advantages of organc fertlzer and would want to enjoy them. Ths result s n lne wth the earler fndngs of Och and Malumfash (2005), Ofuoku et al. (2008). Total Lvestock holdng: Consstent wth a pror expectaton, lvestock holdngs found to affect both the probablty of partcpaton and the extent of organc fertlzer use postvely and sgnfcant at less than 1%. Ths s due to the fact that the man source of organc fertlzer s lvestock manure and households who have lvestock could apply organc fertlzer more 1272 EP 2016 (63) 4 ( )

9 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH than those wthout lvestock. Ths s n lne wth the fndngs of Chlot (2007). Our Double hurdle model estmaton ndcates that a one unt ncrease n total lvestock holdngs ncrease the probablty of partcpaton by 12.57% and ncreases the level of applcaton of organc fertlzer by 5.63 % among the partcpants. Extenson contact: Extenson contact had the expected postve and sgnfcant effect at less than 1% on probablty of adopton and the ntensty of organc fertlzer technology. Ths mples that organc fertlzer adopton by the small-scale farmers n the study area would depend sgnfcantly on the nformaton they get through the extenson agents and the frequency of contact. Ths assumes that extenson agent creates more mpact on technology adopton as the frequency of contact wth farmer ncreases. Ths s smlar to the fndngs of Ofuoku et al. (2005). Access to credt: Havng access to credt had the expected postve and sgnfcant effect at less than 10% on ntensty of adoptng organc fertlzer. Access to affordable credt ncreases fnancal resources of farmers and ther ablty to meet transacton costs assocated wth varous organc fertlzers to solve fnancal constrants, whch s smlar to the results of Abay and Assefa (2004). If farmers can get access to credt, they can purchase lvestock for the purpose ndrect use of organc fertlzer (manure). Accordng to the results of the model, farmers who get credt were about 460.7% more lkely to adopt organc fertlzer technology than those who face credt constrant. Dstance from the market: The average dstance from the market was also one of the varables hypotheszed to affect the decson to use and the extent use of organc fertlzer. Dstance from market turned out to be postvely and statstcally sgnfcant at 10% and 1% assocated wth the decson of partcpaton and the level of adopton of organc fertlzer respectvely. However, t had a negatve effect on adopton and the extent of applcaton of organc fertlzer, as expected. Proxmty to market s an mportant determnant, presumably because the market serves as a means of exchangng nformaton wth other farmers. When farmers are far from the market, the transacton cost for acqurng nput and output wll be hgh and ths wll, n turn, reduce the relatve advantage of organc fertlzer use. Our results ndcated that, a one-klometer ncrease n dstance of market reduces the probablty to adopton and ntensty by 13.9 % and 68.7% respectvely. Plot sze: The postve relatonshp between plot sze and organc fertlzer adopton decson that was evdent n the model mples that n the study area, small-scale farmers are more lkely to choose farm yard manure adopton as ther farm sze ncreases though t s nsgnfcant. Thus plot sze turned out to be a major determnant of farm yard manure adopton level. Ths supports the vews of Ofuoku et al. (2008) on plot sze. Slope of plot: The other mportant factor n terms of decsons to adopt organc fertlzer was average slope of plot. The varable was negatvely sgnfcant at less than 5% level on the decson of adopton. The possble reason could be as slopper plots are susceptble for sol eroson; the return from them wll be smaller as compared to the land whch s flatter. As the result farmers mght prefer to nvest on flatter plot than slopper plots snce t provdes them EP 2016 (63) 4 ( ) 1273

10 Aemro T. Terefe, Musa H. Ahmed hgher return. In addton to ths, f the plot becomes sloppy farmers do not apply manure due to the fear that t wll be washed out and affect the neghbors plots and the envronment. Concluson and Polcy Implcatons The objectve of ths paper was to understand the determnants of adopton and ntensty of organc fertlzer n Central Rft Valley of Ethopa. Ths s acheved usng an ndependent double hurdle model. About 47% of the farmers adopt organc fertlzer, whch s a low adopton level. Our research ndcates that more efforts to concentrate on ths category of farmers by creaton extenson contact and promotng lteracy status could ncrease adopton. The level of adopton was determned by lvestock holdng, access to credt, dstance from the market and slope of plot, and plot sze. Ths ndcates emphass should be gven on adoptng lvestock-crop based farmng system by the farmers due to the complementary effects on each other. Extenson agents should ncrease contacts wth farmers and ther famles, and ntegrate demonstratons of methods wth results. Our results ndcate that n general there s no correlaton between probablty of adopton and ntensty of organc fertlzer applcaton whch ndcates that factors that affect adopton are not necessarly the same as those that nfluence the level. Therefore, t s mportant to consder both stages n evaluatng strateges amed at promotng the adopton and use of organc fertlzer. In general terms, a wde range of factors, polces, nsttutons and organzatons should be organzed and coordnated n order to work collaboratvely to develop an effectve approach to addressng low productvty of crop producton. References 1. AfDB, (2011): Malaw nterm country strategy paper Afrcan Development Bank, Tuns 2. Ajay, O. C. (2007): User acceptablty of sustanable sol fertlty technologes: Lessons from farmers knowledge, atttude and practce n southern Afrca. Journal of sustanable agrculture, vol. 30, no. 3, pp Arslan, A., McCarthy, N., Lpper, L., Asfaw, S., Cattaneo, A. (2014): Adopton and ntensty of adopton of conservaton farmng practces n Zamba. Agrculture, Ecosystems & Envronment, Vol. 187, pp Asfaw, A., Admasse, A. (2004): The role of educaton on the adopton of chemcal fertlser under dfferent socoeconomc envronments n Ethopa. Agrcultural Economcs, vol. 30, no. 3, pp ATA (Agrcultural transformng agency), 2010.Acceleratng Ethopan Agrculture Development for Growth, Food Securty, and Equty Synthess of fndngs and recommendatons for the mplementaton of dagnostc studes n extenson, rrgaton, sol health/fertlzer, rural fnance, seed systems, and output markets (maze, pulses, and lvestock), Adds Ababa, Ethopa 6. Batono, A., Hartemnk, A., Lungu, O., Nam, M., Okoth, P. L., Smalng, E., 1274 EP 2016 (63) 4 ( )

11 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Thombano, L. (2006): Afrcan sols: ther productvty and proftablty of fertlzer use. Proceedngs of the Afrcan fertlzer Summt. 7. Beedy, T. L., Snapp, S. S., Aknnfes, F. K. and Slesh, G. W. Impact of glrcda sepum ntercroppng on sol organc matter fractons n a maze-based croppng system, Agrculture, Ecosystems & Envronment, vol. 138, pp Bezu, S., Kasse, G. T., Shferaw, B., Rcker-Glbert, J. (2014): Impact of mproved maze adopton on welfare of farm households n Malaw: a panel data analyss. World Development, vol. 59, pp Chlot, Y. (2007): The dynamcs of sol degradaton and ncentves for optmal management n the Central Hghlands of Ethopa (Doctoral dssertaton, Unversty of Pretora). 10. Cragg, J. G. (1971): Some statstcal models for lmted dependent varables wth applcaton to the demand for durable goods. Econometrca: Journal of the Econometrc Socety, pp CSA (Central Statstcal Agency) (2011): Statstcal Report on Area and Crop Producton Adds Ababa, Ethopa. 12. CSA (Central Statstcal Agency), (2015): Agrcultural Sample Survey: Report On Farm Management Practces. Adds Ababa, Ethopa 13. Dawson, N., Martn, A., Skor, T. (2016):Green Revoluton n Sub-Saharan Afrca: Implcatons of Imposed Innovaton for the Wellbeng of Rural Smallholders. World Development, vol. 78, pp FEWS NET (Famne Early Warnng Systems Network), Ethopa Food Securty Outlook. fnal_ext.pdf 15. Fkru A (2009): Assessment of Adopton Behavour of Sol and Water Conservaton Practces n the Koga Watershed, Hghlands of Ethopa. MSc. Thess, Cornell Unversty. 16. García-Orenes, F., Morugán-Coronado, A., Zornoza, R., Cerdà, A., Scow, K. (2016): Correcton: Changes n Sol Mcrobal Communty Structure Influenced by Agrcultural Management Practces n a Medterranean Agro-Ecosystem. PLoS ONE, vol. 11, no. 3, e Gebremedhn, B., Swnton, S. M. (2003): Investment n sol conservaton n northern Ethopa: the role of land tenure securty and publc programs. Agrcultural economcs, vol. 29, no. 1, pp Gesseler, D., Horwath, W. R., Joergensen, R. G., Ludwg, B. (2010): Pathways of ntrogen utlzaton by sol mcroorgansms a revew. Sol Bology and Bochemstry, vol. 42, no. 12, pp Greene W (2003): Econometrc analyss. 5 th Edton. Macmllan, New York, USA. 20. John O, Geophrey S, Mary M (2009): Agrcultural technology adopton: A panel analyss of smallholder farmers fertlzer use n Kenya. Center of Evaluaton for EP 2016 (63) 4 ( ) 1275

12 Aemro T. Terefe, Musa H. Ahmed Global Acton. Contrbuted paper prepared for presentaton at the Afrcan Economc Research Consortum Conference on Agrculture for Development, May 28th and 29th, Mombasa, Kenya. 21. Kalnda, T., Tembo, G., Kuntashula, E., Lusaka, Z. (2014): Adopton of mproved maze seed varetes n Southern Zamba. Asan Journal of Agrcultural Scences, vol. 6, no. 1, pp Kasse, M., Shferaw, B., Murcho, G. (2011): Agrcultural technology, crop ncome, and poverty allevaton n Uganda. World Development, vol. 39, no. 10, pp Larsen, A. F., Llleør, H. B. (2014): Beyond the feld: The mpact of farmer feld schools on food securty and poverty allevaton. World Development, 64, pp Macc, C., Don, S., Peruzz, E., Mennone, C., Mascandaro, G. (2013): Bostmulaton of sol mcrobal actvty through organc fertlzer and almond tree assocaton. Land Degradaton & Development. vol. 27, pp McIntre, J., Bourzat, D., Prabhu, P. (2016): Crop-lvestock nteracton n sub- Saharan Afrca. Washngton, DC: World Bank. 26. Msko, M. (2013): Dlemma n partcpatory selecton of varetes. Agrcultural Systems, vol. 119, pp Obayelu, A. E., Okuneye, P. A., Shttu, A. M., Afolam, C. A., Dpeolu, A. O. (2016): Determnants and the perceved effects of adopton of sustanable mproved food crop technologes by smallholder farmers along the value chan n Ngera. Journal of Agrculture and Envronment for Internatonal Development (JAEID), vol. 110, no. 1, pp Och, J. E., Malumfash, A. J. (2005): Adopton of Selected technologes to Fadama Farmng n Bauch State. In Proceedng of the 9th Annual Conference of Farm Management Assocaton of Ngera held n Delta State Unversty, Asaba Campus, Asaba Ngera between pp Ofuoku U, Emuh N and Osuagwu N (2005): Adopton of mproved varetes of soybean (Glycne max) among rural female farmers n Ndokwa West and Ukwuan Local Government Areas of Delta State, Ngera. Proceedng of the 9th Annual conference of Farm management Assocaton of Ngera held between th October 2005 at Delta State Unversty, Asaba Campus, Asaba, Ngera., pp Ofuoku, A. U., Olele, N. F., Emah, G. N. (2008): Determnants of adopton of mproved fsh producton technologes among fsh farmers n Delta State, Ngera. Journal of agrcultural educaton and extenson, vol. 14, no. 4, pp Otsuka, K., Yamano, T. (2005): The possblty of a green revoluton n sub- Saharan Afrca: Evdence from Kenya. Journal of Agrcultural and Development Economcs, vol. 2, no. 1, pp EP 2016 (63) 4 ( )

13 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH 32. Pender, J., Gebremedhn, B. (2008): Determnants of agrcultural and land management practces and mpacts on crop producton and household ncome n the hghlands of Tgray, Ethopa. Journal of Afrcan Economes,vol. 17, no. 3, pp Rufno, M. C., Rowe, E. C., Delve, R. J., Gller, K. E. (2006): Ntrogen cyclng effcences through resource-poor Afrcan crop lvestock systems. Agrculture, ecosystems envronment, vol. 112, no. 4, pp Smalng M, Nandwa A and Jansen M (1997): Replenshment sol fertlty n Afrca. Sol Scence Socety of Amerca specal publcaton, 5151, pp Spelman, D. J., Byerlee, D., Alemu, D., Kelemework, D. (2010): Polces to promote cereal ntensfcaton n Ethopa the search for approprate publc and prvate roles. Food Polcy, vol. 35, no. 3, pp Storck, H., Doppler, W. (1991): Farmng systems and farm management practces of smallholders n the Hararghe Hghlands. Wssenschaftsverlag Vauk Kel, Germany 37. Teklewold H, Dad L, Yam A and Dana N 2006: Determnants of adopton of poultry technology: a double-hurdle approach. Lvestock Research for Rural Development. Volume 18, Artcle #40. Retreved October 5, 2016, from lrrd18/3/tekl18040.htm) 38. Teklewold, H., Kasse, M., Shferaw, B. (2013): Adopton of multple sustanable agrcultural practces n rural Ethopa. Journal of Agrcultural Economcs, vol. 64, no. 3, pp Teklewold, H., Kasse, M., Shferaw, B., Köhln, G. (2013): Croppng system dversfcaton, conservaton tllage and modern seed adopton n Ethopa: Impacts on household ncome, agrochemcal use and demand for labor. Ecologcal Economcs, vol. 93, pp Tobn, J. (1958): Estmaton of relatonshps for lmted dependent varables. Econometrca: journal of the Econometrc Socety, vol. 26, pp WFP (World Food Program), 2010.The State of Food Insecurty n the World, ValedelleTerme D Caracalla, Rome, Italy. 42. World Bank, Indcators Appendces Appendx Table 1. Summary of hypothetcal explanatory varables that affect probablty of adopton and ntensty use of organc fertlzer. Varable defnton Type of varables Measurement Dependent varables Expected sgn Adopton of organc fertlzer ( Dummy Non-adopter = 0, adopter= 1 EP 2016 (63) 4 ( ) 1277

14 Aemro T. Terefe, Musa H. Ahmed Level of adopton of organc fertlzer ( Contnuous Quntal Independent Varables Sex of household Dummy Female=0, Male=1 +,- Age of household Contnuous Number of years + Educatonal status Dummy Illterate=0,Ltrate=1 + Famly sze Contnuous Number +,- Experence Contnuous Number of years + Off/non farm ncome Contnuous Ethopan Brr - Cultvated land Contnuous Hectare + Lvestock holdng Contnuous TLU + Extenson contact Contnuous Number +,- Access to credt Dummy No=0,yes=1 +,- Dstance to nearest market Contnuous Klometre +,+ Plot sze Contnuous Hectare +,- Average plot dstance from home Contnuous Klometre -,- Plot slope Dummy Flatter =0, steeper =1 -,- Cost of norganc fertlzer Contnuous Ethopan Brr +,+ Appendx Table 2. Estmaton assumng ndependence maxmum lkelhood estmates of double hurdle model Varables Below Above Hurdle coef SE P Age of the head lower CI upper CI coeffcent SE p lower CI upper CI Educaton Famly sze Experence Off/nonfarm ncome Sze of cultvated land Sze of lvestock (TLU) Extenson contact Tranng EP 2016 (63) 4 ( )

15 DRIVING FORCE OF ORGANIC FERTILIZER USE IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Credt Dstance to the market Plot sze Home to plot dstance Sol fertlty Slop of the plot Constant Sgma Source: Double Hurdle Output, 2016 Appendx Table 3. Converson factors used to calculate Tropcal Lvestock Unts (TLU) Anmals Calf 0.25 Hefer and Bull 0.75 Cows and Oxen 1 Camel 1.6 Donkey young 0.35 Donkey adult 0.7 Sheep and Goat 0.13 Chcken/poultry Source: Storck et al., (1991) TLU-equvalent EP 2016 (63) 4 ( ) 1279

16 UDC :63 ISSN ECONOMICS OF AGRICULTURE CONTENT 1. Solomon Abayom Olakojo SEASONAL LABOUR MARKET RIGIDITIES: IMPACT ON FARM EMPLOYMENT AND WAGES IN NIGERIA Ivana Ilć, Sonja Jovanovć, Vesna Jankovć Mlć FORECASTING CORN PRODUCTION IN SERBIA USING ARIMA MODEL Dragan Ilć, Aleksandra Tešć THE RELATIONSHIP BETWEEN SUPPLY CHAIN MANAGEMENT STRATEGY, MARKETING, LOGISTICS AND COMPANY PERFORMANCE FOR BREWERIES IN SERBIA Mlan Ivkov, Ivana Blešć, Karolna Smat, Dunja Demrovć, Sanja Božć, Vdoje Stefanovć INNOVATIONS IN THE RESTAURANT INDUSTRY AN EXPLORATORY STUDY Dragan Mlć, Danca Glavaš-Trbć, Mrela Tomaš-Smn, Dejan Jankovć, Vladslav Zekć ECONOMIC CHARACTERISTICS OF GRAPE PRODUCTION IN SOUTH BANAT Ivan Mlojevć, Svetlana Ignjatjevć, Dragomr Đorđevć INVESTMENT ANALYSIS FACTORS OF ECONOMIC GROWTH FOR THE REPUBLIC OF SERBIA Otlja Sedlak, Slobodanka Jovn, Radovan Pejanovć, Zoran Ćrć, Jelca Eremć Đođć ACCESS TO FINANCE FOR MICRO, SMALL AND MEDIUM BUSINESS UNITS IN SERBIAN AGRIBUSINESS Dejan Sekulć, Marja Mandarć, Vesna Mlovanovć MOTIVATION OF TRAVELERS FOR PARTICIPATION IN WINE TOURISM IN SERBIA Predrag Stamenkovć, Lukrecja Djer FOOD AS A TOURISM COMPETITIVENESS FACTOR OF JABLANICA DISTRICT IN SERBIA 1253 Economcs of Agrculture, Year 63, No. 4 ( ) 2016, Belgrade

17 10. Aemro T. Terefe, Musa H. Ahmed DRIVING FORCE OF ORGANIC FARMING IN CENTRAL RIFT VALLEY OF ETHIOPIA: INDEPENDENT DOUBLE HURDLE APPROACH Mlena Trgovčevć Prokć, Mlan Počuča ACQUISITION OF AGRICULTURAL LAND Nebojša Žarkovć, Jova Mloradć, Slobodan Samardžć THE RISK OF DROUGHT IN CROP PRODUCTION INSURANCE Mljana Barjaktarovć, Bors Kuzman, Sonja Žarkovć FAMILY HOLDINGS PROFITABILITY IN THE ORGANIC FOOD PRODUCTION IN THE REPUBLIC OF SERBIA Ivan Bulatovć, Sanja Škorć, Vladmr Jovanovć BRANDING A BUSINESS NAME Sonja Đurčn, Slađana Savć, Duško Bodroža, Gorca Cvjanovć, Slavša Đorđevć CLIMATE CHANGE IMPACTS ON AGRICULTURAL WATER MANAGEMENT: CHALLENGE FOR INCREASING CROP PRODUCTIVITY IN SERBIA Goran Jevć, Jelena Jevć, Stevan Barovć THE ROLE OF BELGADE WINE FAIR BEOWINE ON DEVELOPMENT OF WINE TOURISM IN SERBIA Vladmr Kostć, Zoran Smonovć, Aleksandar Kostć ADVANTAGES AND CONTROVERSY OF COMMON AGRICULTURAL AND COHESION POLICY IN THE EU Aleksandar Majstorovć, Jova Mloradć, Slobodan Andžć, Rosa Andžć, Goran Dvac, Anđelka Ančć, Zoran Mrkovć LEGAL ASPECTS OF FINANCIAL ANALYSIS IN AGRIBUSINESS COMPANIES IN SERBIA Dušan Mlć, Mrjana Lukač-Bulatovć, Branka Kalanovć-Bulatovć, Zoran Mlovančevć RAW MATERIAL REQUIREMENTS PLANNING IN FRUIT JUICE PRODUCTION Vladmr Njegomr, RajkoTepavac, Tamara Bkck RISK MANAGEMENT IN AGRICULTURE UNDER CLIMATE CHANGES 1403 Economcs of Agrculture, Year 63, No. 4 ( ) 2016, Belgrade

18 21. Vesna Paraušć, Ivana Smeunovć MARKET ANALYSIS OF SERBIA S RASPBERRY SECTOR AND CLUSTER DEVELOPMENT INITIATIVES Pero Petrovć, Danca Vukovć FINANCIAL SOURCES OF SMALL AND MEDIUM ENTERPRISES FOR AGRIBUSINESS AND ECO-TOURISM IN SERBIA Zoran Rajć, Nada Vgnjevć-Đorđevć, StevanČanak PRODUCTION AND ECONOMIC RESULTS OF INTENSIVE CARP (CyprnusCarpo) FARMING IN SERBIA Aleksandra Vujko, Marko D. Petrovć, Mloš Dragosavac, Tamara Gajć DIFFERENCES AND SIMILARITIES AMONG RURAL TOURISM IN SLOVENIA AND SERBIA - PERCEPTIONS OF LOCAL TOURISM WORKERS 1459 Economcs of Agrculture, Year 63, No. 4 ( ) 2016, Belgrade