Profitability of Maize and Common Bean Production among Smallholder Farmers in Rift Valley of Ethiopia

Abstract

Agriculture is a dominant economic sector and the engine of growth to promote the inclusive economic development in Ethiopia. Even though Ethiopia had sustained growth in maize and common production, their yields continue to be lower than the world’s average. The study analyzed the profitability of smallholders’ maize and common bean production in the Central Rift Valley of Ethiopia. A three-stage sampling technique was used to select 163 households (99 and 64 for maize and common bean, respectively). Plot level panel data generated annually from 163 observations using a well-structured questionnaire in three rounds. Descriptive statistics and gross margin analysis were used for the data analysis. Results of the gross margin analysis showed that the net-farm income for maize and common bean growers were found to be 20654 and 10317.7 Birr/ha, respectively. The average production cost of maize and common bean was 17857.7 and 15247.6 Birr/ha, respectively. The input-output ratios were 1:2.2 and 1:1.67 for maize and common beans, respectively. The result indicated that the lowland yield potential of maize in the area was 12.5 t/ha, implying that farmers realize only around 32.3% of that potential. Similarly, the national yield of common bean increased from 0.7 tons/ha in 2000 to 1.7 tons/ha in 2020. By reducing this prevailing yield gap, smallholders could increase their income approximately from 26,873 ETB (USD 770) to 83,167 ETB (USD 2383) per hectare. As productivity-enhancing understanding are introduced farmers attempts to increase farm productivity, which will lead to the increase of their farm income in the rift valley of Ethiopia.