Next Article in Journal
The Impact of Russia’s Import Embargo on the EU Countries’ Exports
Next Article in Special Issue
Revisiting the Environmental Kuznets Curve: The Spatial Interaction between Economy and Territory
Previous Article in Journal
Pandemic Preparedness and Public Health Expenditure
Previous Article in Special Issue
Herbal-Based Cosmeceuticals and Economic Sustainability among Women in South African Rural Communities
Open AccessArticle

New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia

by 1,2
1
School of Economics and Business, Norwegian University of Life Sciences, 1430 Ås, Norway
2
Department of Agricultural Economics, Hawassa University, Hawassa 05, Ethiopia
Economies 2020, 8(3), 61; https://doi.org/10.3390/economies8030061
Received: 15 May 2020 / Revised: 22 July 2020 / Accepted: 24 July 2020 / Published: 30 July 2020
(This article belongs to the Special Issue Current Issues in Natural Resource and Environmental Economics)
Increasing agricultural production is essential to improving food availability and farm household incomes in developing economies. This study investigated the dynamic supply responses of major cereal crops to price and nonprice factors in Ethiopia using the Ethiopian Rural Household Survey (ERHS) panel dataset from 1994 to 2009. According to the Nerlovian expectation and adjustment approach in conjunction with the system GMM (generalized method of moments) estimator, both the planted areas and produced yields of major crops (teff, wheat, and barley) are influenced by price and nonprice factors in Ethiopia. The supply of major cereal crops is affected positively by their own prices and negatively by the prices of substitute crops. Nonprice factors such as education, farm size, fertilizer, land quality, and precipitation also affect supply of major cereals. Both the short-term and long-term acreage and yield response elasticities of teff and barley are positive. Moreover, the adjustment coefficients are positive for teff, barley, and wheat. The results suggest that Ethiopian farmers are capable of analyzing market signals and responding positively to price increases of staple crops. The findings also imply that the Ethiopian agricultural sector has been responsive to the cereal price increases observed since 2006. The remarkable growth of Ethiopian agriculture over recent decades is partly explained by the increase in agricultural prices. This study recommends that a fine-tuned balance between government interventions and market solutions is important, in addition to improving farmers’ agronomic practices, for increasing agricultural production. View Full-Text
Keywords: system GMM; acreage response; yield response; supply elasticity; dynamic panel data approach; major cereals; Ethiopia system GMM; acreage response; yield response; supply elasticity; dynamic panel data approach; major cereals; Ethiopia
Show Figures

Figure 1

MDPI and ACS Style

Tenaye, A. New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia. Economies 2020, 8, 61.

AMA Style

Tenaye A. New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia. Economies. 2020; 8(3):61.

Chicago/Turabian Style

Tenaye, Anbes. 2020. "New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia" Economies 8, no. 3: 61.

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Search more from Scilit
 
Search
Back to TopTop