Smallholder Farmers Contract Farming As A Response To Climate Change And Variabilities In Ethiopia Empirical Analysis From Kofele And Adama Districts Of Oromia Regional State

This study aims to investigate CF as a response to climate change and climate viabilities inrnKofele and Adama Districts of Oromia Regional State. It specifically conducted to assess thernperception of SHFs’ on CF as climate change adaptation strategies (CCASs) and to assess thernimpacts of CF on net-income. It also examined the factors affecting adoption of CCASs,rnemployed and explored the challenges and opportunities of CF in the study areas. This studyrnemployed a concurrent or mixed research approach: quantitative and qualitative approach andrncollected data from 368 households who were selected purposively and proportionately throughrnrandom sampling. The study relied on household survey, FGDs, KIIs, field observations, casernhistories and secondary documents to collect data. The Likert Scale Measurement (LSM) wasrnused assess the perception of SHFs’ on CF as CCASs and employed Propensity Score Matchingrn(PSM) to assess the impacts of CF on net-income earned by SHFs’. Furthermore, the studyrnrelied on the Multinomial Logit Model (MNL) to examine the factors of adoption of CCASs. ThernPrincipal Component Analysis (PCA) was used to identify and examine the major challenges inrnCF. Further, analysis of opportunities, challenges of CF were qualitatively described, and casernhistories were used in the analysis. SPSS Version 20 Software, Stata Version 14 software,rnVenizim Software 6.3 were used to enter and organize data. Moreover, the study organized andrnanalyzed metrological data through Microsoft Excel and used Arc GIS 10.1 for mapping thernstudy locations. For the perception studies, 46.2% (63) of farmers involved in Malt Barley atrnGermama were belongs to average perception category followed by those 33.9% (46) and 19.9%rn(27) categorized under better and poor perception category, respectively. Regarding SHFsrninvolved in Sugarcane outgrower, 81.5% (189) and 18.5% (43) were in poor to averagernperception category, respectively. The Propensity Score Matching (PSM) and the averagerntreatment effect (ATT) techniques such as Nearest Neighbour Matching (NNM), RadiusrnMatching (RM), Kernel Matching (KM) and Stratification Matching (STM) revealed that thernsampled households’ heads that participated in CF arrangements experienced a decrease in netincome by 24.3%, 29.6%, 30.2% and 28.3% as measured by NNM, RM, KM and STM,rnrespectively. The overall impact of the treatment effect measurement on the net-income revealedrnthat the net-income of the participant SHFs CF faced a reduction of net-income by 28.1% onrnaverage. The MNLM results revealed that age of household head, educational status ofrnhousehold head, family size, livestock holding, access to credits, access to agriculturalrntechnologies and metrological information significantly affects the adoption of various CCASs.rnMoreover, the PCA results revealed that among all the variables in the five dimensions, lack ofrnstorage facilities for agricultural produce, poor market linkages, and shortage of trainings andrnother technical assistance, delay in financial services, poor pricing strategies and delay inrnpayments exhibited the factor loadings of 0.97, 0.92, 0.83, 0.82 and 0.72, respectively. Itrnexplained the variation by 61.4% of the total variance in the 14 observed constructs. Therefore,rnwe suggested that the policy practitioners should design a policy and legal framework on CFrnarrangement and scrutinize the overall CF processes. Consequently, the findings also impliedrnthat addressing the major factors challenging CF and maximize those opportunities in CF isrnessential. To this end, the concerned parties should work on strengthening the knowledge basernthrough education, field trainings, and proper implementation of agronomic practices andrnensuring sustainable livelihood.

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