Does Irrigation enhance and food deficits discourage fertilizer adoption in a risky environment? Evidence from Tigray, Ethiopia

The northern Ethiopian highland in general and the Tigray region in particular is a drought prone area where agricultural production risk is prevalent. Moisture stress is a limiting factor for improved agricultural input mainly fertilizer use. Lack of capital and consumption smoothing mechanisms limits households investment in production enhancing agricultural inputs, possibly leading into poverty trap. Using a Cragg (Double Hurdle) model, we analyzed how rainfall risks, access to irrigation and food deficits affect the probability that farm households use fertilizer and given that the probability is positive and significant, the amount (intensity) of fertilizer use. Accordingly, we found that households were more likely to use fertilizer and that they used significantly higher amounts of fertilizer on their irrigated plots than on rain-fed plots. Furthermore, households with access to irrigation were more likely to use fertilizer, but the intensity (amount) of fertilizer they used was not significantly different from those households without access to irrigation. In investigating the effect of rainfall risk on fertilizer use, we found that fertilizer use was significantly higher in areas with higher average rainfall and in areas with lower rainfall variability. In general, irrigation was found significantly important for fertilizer adoption mainly in areas with low rainfall and high rainfall variability. Finally, we investigate the effect of food deficit on fertilizer adoption and found that both food self-sufficient and food deficit households were less likely to use fertilizer as coping mechanism. However, among those who decided to adopt, the food deficit households used higher amount of fertilizer than the food self-sufficient.