This working paper by the Livestock and Irrigation Value chains for Ethiopian Smallholders (LIVES) Project and the International Water Management Institute (IWMI) presents results from an analysis of the profitability of selected irrigated commodities and farmers’ risk perception in Ethiopia.
Findings from the study suggest that most commodities have high level of profitability for producers. This may assure the feasibility of investments on the respective commodities vis-a-vis other investment alternatives such as saving money in local banks to commercial saving interest rates.
The study found that provided that output prices are stable, yield enhancing interventions secure more profit to farmers and profit is more responsive to yield growth than to cost rise. The level of perceived business risk by farmers ranges from moderate to high with the most important business risk occurring at the production stage of the value chain, followed by the post-harvest and the input supply stages. The study recommends improving the entire value chain of irrigated agriculture by targeting interventions at all stages.
The data was collected from Amhara, Tigray, SNNP and Oromia in the 2013-14 production year.