The Nexus Between Crop Productivity and Poverty in North Shewa: The Case of Lalo Midir Woreda

Abstract

This paper used the Multidimensional Poverty Index approach to examine rural poverty (incidence
and intensity) levels in Lalo Midir Woreda. OLS and Stochastic Cob-Douglass production frontier
methods have been used to evaluate the drivers of crop productivity and technical efficiency level
of the farmers respectively. Finally, the binary logit model has been used to examine the effect of
crop productivity and other factors on poverty. In order to achieve these objectives, the study has
used primary data collected from 151 rural household heads in four kebele's of Lalo Midir Woreda
by deploying structured interview questions with multi-stage sampling techniques. The incidence
of poverty or the percentage of people who are MPI poor was 63.4% and the average intensity of
MPI poverty across the poor among the sampled households was 55.3%. The Multidimensional
Poverty Index (MPI) for the sampled households was 0.351. The research also finds that
multidimensional poor households not only possess fewer resources but are also much less
productive (6.56 quintal per hectare) and less efficient (65%). The binary logistic regression result
reveals that crop productivity, technical efficiency, farm size, family size, dependency ratio,
educational level, livestock holding in TLU, number of oxen holding, and annual income are
significantly influenced by rural multidimensional poverty at the farm level. Finally, the study
suggests crop productivity and efficiency play a positive role in poverty reduction, policy makers
should design scaling-up strategies.