Using a nationally representative dataset, and information on why farmers did not purchase fertilizer, the authors estimate a double-hurdle fertilizer adoption model for Ethiopia. Access is an overriding constraint in four zones. Credit is shown to be a major supply-side constraint, suggesting that household cash resources are generally insufficient to cover fertilizer purchases. On the demand side, household size, formal education of the farmer, and the value-to-cost ratio have the largest impact on adoption and intensity of fertilizer use. The results underline the importance of increasing the availability of credit, developing labor markets, and reducing the procurement, marketing and distribution costs of fertilizer. The authors conclude that current large-scale transport, health, and education investment programs will positively impact smallholder productivity and household welfare. The price sensitivity of farmers suggests that an urea subsidy could be useful in redressing the nutrient imbalance currently observed in Ethiopia.

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In this paper we use a fixed-random coefficients regression model to analyse data for cereal growing small-scale farmers in efficiency. Results show that land size is a major constraint and only small changes in cultivated area and land quality yield relatively high increments to output. Larger farms are relatively less productive, everything else being equal. Human capital in the form of literacy and experience are found to affect productivity positively. Our findings show a high degree of farm-specific technical inefficiency. With regard to the inputs we find high degrees of input-specific technical inefficiency, especially so for labour and fertilizer. The age structure of the household, environmental factors and education are found to be weakly correlated with efficiency. Furthermore, sharecropping is found to be positively correlated with technical efficiency.