The paper employs the computable general equilibrium (CGE) model of the Oromia region of Ethiopia to assess the macroeconomic impacts of agricultural policy on agricultural growth and rural households’ social welfare. The analysis is based on social accounting matrix (SAM) of Oromia region. This Oromia SAM is employed as a framework to estimate the effects of policy shocks on rural households’ social welfare. This SAM provides base year data needed for policy simulation in CGE model of Oromia region. This study develops two simulations based on economic assumptions and tests their effects on agricultural production, and social welfare. The first set of experiment focuses on the irrigation policies that change the factor intensities in the production of agricultural commodities, and the second one focuses on the precision agriculture that raises agricultural productivity in the use of technologies. The analysis identifies that irrigation scaling up has a positive effect on agricultural production, and social welfare. The application of precision agriculture generates a significant and positive effect on agricultural productivity and production, and rural households’ income and consumption. This finding suggests that price support policy should be implemented simultaneously with suggested policies.
Empirical studies on the effects of governance structures on incentives have still received little attention in the wheat value chain research of developing countries. The purpose of this paper is to investigate the effects of governance structures on actors’ incentives in different functional nodes of the wheat value chain. This study used personal interviews to collect primary data from input suppliers, wheat producers, wholesalers, wheat processors and co-operatives. Mixed sampling techniques (i.e. random, census and purposive) were applied to select sampling units. Descriptive statistics and the ordered logit model were used to analyse the data. This paper found that governance structures, opportunistic behaviour, asymmetric information and trust influence actors’ incentives in each functional node of the wheat value chain. Specifically, extension services, governance structures, power relations and price information have significant and positive effects on producers’ price incentives. The study provides pioneering evidence of the effects of governance structures on incentives in each functional node of the value chain. The study adds new knowledge to the existing empirical knowledge. The results recommend government to use effective policy interventions to reduce opportunistic behaviours and asymmetric information, and to adopt incentive strategies to encourage investment, and increase productivity and profitability.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.