Impact of Integrated Soil Fertility Management Practices on the Welfare of Smallholder Farmers in Ethiopia

Enhancing farm productivity in Ethiopia through the adoption of Integrated Soil Fertility Management (ISFM) is crucial for bridging the gap between food demand and supply, while also ensuring the sustainability of agro-ecosystems. However, the synergistic effects of different types of technologies within ISFM remain inadequately understood. This study analyzes individual and combined impacts of adopting ISFM practices, specifically inorganic fertilizer and Soil and Water Conservation (SWC) practices, on net crop value and per capita food consumption expenditure. Using primary data collected from 781 plots in eastern Ethiopia, the study employs Multinomial Endogenous Switching Regression (MESR) to identify those factors associated with the adoption of these practices and evaluate their impacts on households’ welfare, while accounting for both observable and unobservable biases. The average treatment effects of adopting inorganic fertilizer and SWC practices either separately or in combination show that these practices result in improved net crop value and per capita food consumption expenditure. Interestingly, the combined impact of inorganic fertilizer and SWC practices on net crop value and food consumption expenditure is more than double when compared to adopting these practices separately. Moreover, our finding shows that the age and educational level of the household, irrigation use, and cultivated area are positively and significantly associated with the likelihood of adopting the combination of inorganic fertilizer and SWC practices. Therefore, encouraging and supporting farmers to adopt a combination of inorganic fertilizer and SWC practices will result in significant welfare gains.