A bio-economic analysis of the benefits of conservation agriculture: The case of smallholder farmers in Adami Tulu district, Ethiopia

This study analyses the potential impact of conservation agriculture (CA) and its binding constraints for adoption in smallholder farming systems in a drought-prone district of central Ethiopia. We develop a dynamic household bio-economic model by taking into account the existing farming system, resource constraints and market imperfections. Climate-induced production risk is introduced into the model by estimating a weather-specific production function using data generated from a crop simulation model. It is found that the full package of CA, which consists of minimum tillage, mulching and crop diversification, does not appear to be in the best interest of smallholder farmers. However, loosely defined CA practises such as sole maize production with conservation tillage and maize-bean intercropping with conventional tillage, which are not currently practised in the study area, are likely to be adopted by the farmers. The results further demonstrate that time preference, risk aversion, limited credit and market access are key constraints to CA uptake. However, merely addressing these constraints may be insufficient incentives for smallholder farmers to fully adopt CA practises. It is important to identify conditions under which the full package CA can be effectively adopted before it is widely promoted.