THE IMPACT OF SELECTED SMALL-SCALE IRRIGATION SCHEMES ON HOUSEHOLD INCOME AND THE LIKELIHOOD OF POVERTY IN THE LAKE TANA BASIN OF ETHIOPIA A Project Paper Presented to the Faculty of the Graduate School of Cornell University in Partial Fulfillment of the Requirements for the Degree of Master of Professional Studies By Getaneh Kebede Ayele July 2011 © 2011 Getaneh Kebede Ayele ABSTRACT Poverty reduction has been largely a result of economic growth. The economic growth and extent of poverty in Ethiopia are determined primarily by the growth of agriculture because agriculture is the largest component of the economy. One of the major factors behind the weak performance of Ethiopian agriculture is lack of adequate rainfall, combined with variability in the onset and duration of rainfall. Irrigation development is one approach to address this problem, and it has been given significant attention in economic development programs in the country. This study examines the impact of selected small-scale irrigation schemes on crops grown, total income, and the likelihood of poverty at household level for a particular region. A survey of 180 randomly-selected household heads, semi-structured interviews and focus group discussions were undertaken in Fogera District, Tana basin, Ethiopia to assess irrigation impacts. Descriptive statistics and econometric modeling were used to assess the impacts of irrigation on household income and the likelihood of a household being classified as poor. The research reported herein had five major objectives. The first objective was to identify the major field crops and vegetables grown using small-scale irrigation in the study area. The main field crops grown using small-scale irrigation schemes in the study region are maize, oat, rice and vetch and the dominant vegetables are onion, tomato, potato and pepper. Onion production was the most important source of income from crops grown with irrigation. The second objective was to compare the relative advantages of four types of small-scale irrigation system, with emphasis on household gross income. Farmers using concrete canal river/spring diversion had higher mean cropping income per household on average than other irrigation types. Statistically significant differences were found between the household concrete canal river/spring diversion and traditional river diversion and pedal pump irrigation systems, but no significant difference exists between concrete river/spring diversion and motor pump, nor between traditional river diversion and pedal pump. Households using any of the four irrigation systems had statistically significantly higher mean gross household income than households not using irrigation. A third objective was to estimate the marginal impact of small-scale irrigation on gross household income controlling for other important factors that affect income. A censored regression model developed for this objective indicated that access to small–scale irrigation increased mean annual household income significantly (about ETB 3,353 per year, or a 27 % increase over non-irrigating households). The fourth objective of this research was to assess the impact of irrigation access on the likelihood of poverty. Descriptive analysis suggested that irrigating households had a lower probability of being poor than non-irrigating households: of households in the lowest quartile of income, only 12% were irrigating households and the remaining 88 % did not irrigate. A Logit regression model developed to assess the impact of irrigation on the likelihood of poverty controlling for other factors indicated that access to irrigation significantly reduced the odds that a household would be in the lowest quartile of household income, the key poverty threshold used in this study. A final objective was to examine the major problems encountered in the use of the small-scale irrigation systems. These were identified by farmers and development agents as: lack of access to surface water, loss of water through seepage, problem of irrigation water distribution, lack of spare parts for water pumps, high cost of fuel for water pumps, lack of market transparency and marketing facilities, crop disease, and the perceived high cost of inputs. BIOGRAPHICAL SKETCH Getaneh Kebede Ayele was born in the Quarit District in Western Gojjam Administrative Zone, Amhara Region, Ethiopia to his father Kebede Ayele, and his mother, Workie Gessesse Ayele, on January 21, 1980 GC. He attended his primary and junior secondary schools at Quarit District in Gebeze Mariam School, and his secondary education at Damot Senior Secondary School in Fenoteselam town. He graduated from Alemaya University with a BSC degree in Agriculture majoring in Animal Science on 3 July 2002 and a BA degree from Bahir Dar University in Economics on 12 July 2008. He was employed by the Ministry of Agriculture and worked at the Werota Agricultural College until starting this MPS program conducted by Cornell University at Bahir Dar University. His opportunity of sharing knowledge and skill from enormously experienced Cornell University professors inspired him to continue his study further to PhD. iii ACKNOWLEDGEMENTS First and for most, I would like to extend my unshared thanks to the almighty God for providing me the opportunity for what I have achieved. I am highly indebted to my research advisors Professor Tammo S. Steenhuis and Professor Chuck F. Nicholson for their generous devotion in encouragement, insight, guidance, and professional expertise from the early design of the research proposal to the final write-up of the thesis. No words can suffice to express my honored thank and gratitude to Dr. Amy S. Collick, Seifu Tilahun and Essayas Kaba for their generous assistance and helpful encouragement during my study with all their kindness through sharing the ups and downs. Great appreciation and special thanks to Dr. Angela Neilan, Dr. Bowman and all other professors who taught me for their unreserved help. I am also grateful to Cornell University for funding this research. A special word of thanks goes for all staff members of the Fogera Woreda Office of Agriculture and Rural Development who provide me technical assistance and transport service. My special and particular thanks go to my friend Hailesysus Ambaw, who lived in USA, for his materials support and encouragement throughout my study. My wholeheartedly thanks should go to Habitamu Addis, Meseret Belachew and all my classmates. I would like to forward my warm appreciation and great thanks to my friend Zemenu Yayeh for his support and encouragement throughout my study. Finally, I am extremely grateful to my father Kebede Ayele for his dedicated partnership in the success of my life. iv I dedicate this thesis manuscript to all participants in Cornell-Bahir Dar Universities MPS program, especially for Professor Tammo S. Steenhuis and Dr. Amy S. Collick v TABLE OF CONTENTS BIOGRAPHICAL SKETCH ......................................................................................... iii ACKNOWLEDGEMENTS .......................................................................................... iv TABLE OF CONTENTS .............................................................................................. vi LIST OF FIGURES ....................................................................................................... ix LIST OF TABLES ......................................................................................................... x ABBREVIATIONS AND ACRONYMS ...................................................................... xi CHAPTER ONE ............................................................................................................. 1 1 INTRODUCTION ................................................................................................ 1 1.1 Background and justification ........................................................................... 3 1.2 Statement of the problem ................................................................................. 5 1.3 The Goal of the research .................................................................................. 7 1.4 The specific objectives ..................................................................................... 7 1.5 Hypotheses ....................................................................................................... 8 CHAPTER TWO ............................................................................................................ 9 2 REVIEW OF RELATED LITRATURE .............................................................. 9 2.1 Poverty ............................................................................................................. 9 2.2 Water and agriculture ..................................................................................... 10 2.3 Irrigation development ................................................................................... 11 2.4 Irrigation methods .......................................................................................... 13 2.4.1 Surface irrigation .................................................................................... 13 2.4.1.1 Basin irrigation ................................................................................ 14 2.4.1.2 Furrow irrigation ............................................................................. 14 2.4.2 Flood irrigation ....................................................................................... 14 2.4.3 Border