The paper investigates the effects of modern farm technology adoption
such as improved seed, fertilizer, pesticide and herbicide on both crop yield
and downside risk exposure in Ethiopia. This study employed a two-stage
approach to estimate a production function, and computed the mean and the
production risk factors (both variance and skewness) from a production function
using Antle’s moment-based approach. The empirical results indicated that
adoption of improved seed, family labor, agriculture capital and manure had a
positive and significant effect on crop yield. On another hand, parcel size and
chemical inputs (pesticide and herbicide) have negative and significant effect on
crop yield. All these factors of production affect the crop yield variation and
downside risk exposures (skewness of output) in differently ways: for instance,
improved seed and chemical inputs positively and significantly affect the
downside risk exposure (risk increasing), and fertilizer and parcel size significantly
affect downside risk exposure but negatively (risk decreasing).
Cite this paper
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