Essays on Contracts, Risk Coping and Technology Adoption in Ethiopia Essays om kontrakter for ...

193 Pages·2010·1.51 MB·English

Essays on Contracts, Risk Coping and Technology Adoption in Ethiopia

Essays om kontrakter for risikohåndtering og teknologiopptak i Etiopia

Philosophiae Doctor (PhD) Thesis
Million Tadesse
Department of Economics and Resource Management
Norwegian University of Life Sciences

Ås 2010

Thesis number: 2010: 18
ISSN: 1503-1667
ISBN: 978-82-575-0893-7

ACKNOWLEDGEMENT
I would like to express my gratitude to all those who gave me the possibility to complete
this PhD study without whom its completion would not have been possible. First and
foremost, I am deeply indebted to my main supervisor Ragnar A. Øygard whose help,
stimulating suggestions and encouragement helped me in all the time of research for and
writing of this dissertation. He has provided me the freedom to pursue and explore new
topics of my own interest.

My co-supervisor, Stein T.Holden was the first who inspired me to pursue my PhD study
at the Department of Economics and Resource Management, Norwegian University of
Life Sciences (UMB). His door has been open for discussions. I am grateful to Stein for
his guidance and encouragement throughout my study period. I would like to thank the
academic and administrative staffs of the department for the friendly environment and
stimulating discussions. I thank Arild Angelsen for his technical comments. We had a
wonderful interaction especially with my office neighbor, Stig Danielsen (IT), his help
has been numerous. I would like to thank Reidun Aasheim for her administraive support
and guides throughout the study period. I thank Carl Brønn (UMB) and Karen (Equinox,
USA) for English style and grammar, correcting both and offering suggestions for
improvement, each in one of my papers.

The Norwegian Government PhD Quota Scholarship program is gratefully acknowledged
for providing such opportunity. I am thankful to the Research Education Committee
(FUFU) for among other things providing financial support to present some of my papers
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in this dissertation at international conferences. I also acknowledge the financial support
of Goteborg University, Environmental Economics Units, Sweden for PhD course works
in spring 2005. My friends, Hussein Hamda and Jema Haji made my PhD course works
more interesting in Uppsala University, Sweden in spring 2004.

The Southern Agricultural Research Institute, Ethiopia provided logistical support during
my field research in Wolaita and Sidama Zones. I want to thank many colleagues in the
institute without their help the two years intensive field work may not have been
accomplished. Especially I am obliged to thank Daniel Dauro , Agedew Bekele, Genene
Tegaye, Zerihun Yemataw, Waga Mazengia, Demise Zewdu, Yehiyese Rezene and
Fiseha Negash. Special thanks go to the enumerators, drivers and farmers. I would like
also to thank Ethiopian Students and community in Ås for their lovely culture of
cooperation and brother-sisterhood relationship. My friend Borgar Auslund has been
instrumental for the off campus interactions and family support.

Last but not least, my wife Sinework Geberemariam and my sons, Fitsum and Yesha
deserve special thanks for their patient, love and generosity. I have no words to express,
there presence with me in Ås helped a lot to work hard even in a very difficult conditions.
All my relatives in Ethiopia (mother, sisters and brothers) highly encouraged me.
Especially, my sister Lemlem and my brothers, Ameha and Ayele played key roles in
many aspects.

Ås, May 2010
Million Tadesse
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In memory of my father, Tadesse Aytenfisu Desta

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Contents
Abstract
Introduction
PAPER I Million Tadesse, Stein T.Holden and Ragnar Øygard, 2009. Contract choice
and poverty in southern highlands of Ethiopia. In Holden,S.T., Otsuka,K.,
and Place,F.M. (eds) The Emergence of Land Markets in Africa. Impacts on
Poverty, Equity and Efficiency, pp.159-178. RFF Press. Washington, DC.
USA.
PAPER II Million Tadesse and Stein T.Holden, 2010. Livestock rental contracts,
incentives and impact on poverty: Panel data evidence from Ethiopia
PAPER III Million Tadesse, 2010. Risk coping startegies, public works and fertilizer
use in southern highlands of Ethiopia
PAPER IV Million Tadesse and Belay Kassa, 2004. Factors influencing adoption
of soil conservation measures in southern Ethiopia: The case of Gununo
area. Journal of Agriculture and Rural Development in the
Tropics and Subtropics, 105(1):49-62.
Appendix: Household Questionnaire Appendix A and B.
Administrative map of Ethiopia.
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Abstract
This dissertation consists of an introduction and four independent papers. The first two
papers examine land and livestock rental contractual arrangements. The first paper
provides detailed analysis of cost sharing contract choices in share cropping contracts and
shows that such arrangements are rational adjustments to the missing credit and insurance
markets. Building on the idea of land rental contracts, the second paper provides an
empirical evidence for the existence of livestock contract choices in an agrarian economy
for the first time. In the third paper, I estimate the role of ex-ante and ex-post risk coping
strategies of households’on fertilizer adoption. The final paper examines households’ soil
conservation technology adoption behavior. Hence, this dissertation aims at providing
empirical evidence on applied contracts in land and livestock, the effect of informal risk
coping strategies on fertilizer use, household soil conservation technology adoption
behavior in southern highlands of Ethiopia. We used an original data set (cross-sectional
and panel) to answer the research questions and test alternative hypotheses. The first two
papers use same data set with additional survey round for the second paper that makes
panel data. Paper 3 and paper 4 utilize data collected in 2000. The findings from this
dissertation provide new insights into applied contracts in land and livestock. While the
literature in land rental contract choices is abundent, no previous study examine the
contribution of livestock contract choices in agrarian economy. The diversity of livestock
contract choices identified in this study is refutation of the claim that livestock rental
contracts are impossible (Binswanger and Rosenzweig, 1986). We showed that contracts
are found to be an important household adaptation to risk and resource sharing strategies
of the poor in Ethiopia. We find that tenants are relatively poor in livestock rental
contracts but they are rich in land rental contracts compared to their counterpart.
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Abstract
Denne avhandlingen består av en introduksjon og fire uavhengige artikler. De to første
artiklene omhandler uformelle kontrakter i landbruket. Den første artikkelen gir en
detaljert analyse av valg av kontrakter for kostnadsdeling i leilendingskontrakter og viser
at slike arrangementer er rasjonelle tilpassinger til manglende kreditt- og
forsikringsmarkeder. Artikkel to bygger på teorier fra leilendingskontrakter i analyse av
leiekontrakter for husdyr, og viser hvordan leiekontrakter for husdyr kan eksistere. Den
tredje artikkelen analyseres hvordan ex-ante og ex-post strategier for risikohåndtering
påvirker husholdenes bruk av kunstgjødsel.I den siste artikkelen undersøkes husholdenes
valg av teknologi for jordkonservering. Denne avhandlingen gir empiri og analyse av
kontrakter for leie av jord og husdyr, effekten på gjødselbruk av uformelle tiltak for
risikohåndtering, husholdenes adopsjon av jordbevaringsteknologi i høylandet i Sør-
Etiopia. Vi har samlet og anvendt et unikt datasett (tverrsnitt og panel) for å svare på våre
problemstillinger og teste alternative hypoteser. De to første artiklene bruker samme
datasett, men artikkel 2 bruker en ekstra runde med datainnsamling, slik at artikkelen kan
bruke panel data metoder. Artikkel 3 og 4 anvender data samlet inn i 2000. Avhandlingen
viser at kontraktene er en viktig tiltak for husholdning tilpasning til risiko og
ressursdelingsstrategier for de fattige i Etiopia.
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Introduction