# Impact of Cluster Farming on Wheat Productivity and Welfare Among Smallholder Farmers in Ethiopia

## TL;DR

This study shows that cluster farming improves wheat productivity and food consumption for smallholder farmers in Ethiopia.

## Contribution

The study introduces a novel application of the endogenous switching regression model to evaluate cluster farming's impact in Ethiopia.

## Key findings

- Adopting cluster farming significantly increases wheat yields for smallholder farmers.
- Cluster farming adoption leads to higher household food consumption expenditure.
- Nonadopters could benefit from higher productivity and consumption if they adopt cluster farming.

## Abstract

This study was conducted with the objective of investigating the impact of adopting cluster farming on wheat productivity and the welfare of smallholder households in the North Shewa zone of the Amhara region in Ethiopia. The study used primary data collected from 394 households sampled using a multistage sampling technique. The data was collected using structured questionnaires and key informant interviews. In order to investigate the impact of adopting cluster farming on households′ wheat productivity measured by their production per hectare and welfare indicated by their food consumption expenditure, the study has used an endogenous switching regression (ESR) model. The result of the analysis indicates that factors such as the household head′s age, education level, perception of cluster farming, household size, farming experience, farm size allocated to wheat production, participation in farmers′ unions, access to irrigation and information about cluster farming, soil quality, training, and proximity to resources have a significant influence on farm households′ decision to adopt cluster farming. The results confirm that the adoption of cluster farming significantly increases wheat yields and directly enhances household per capita food consumption expenditure compared to nonadopters. Furthermore, the findings suggest that nonadopters could have achieved higher wheat productivity and improved food consumption levels had they adopted the practice. Based on these results, the study recommends that the government and relevant stakeholders collaborate with rural farming households to promote cluster farming in the study area, thereby improving smallholder farmers′ wheat productivity and overall welfare.