Abstract

Kinfe Asayehegn

Ethiopia is endowed with three major resources (Land, Water and Human Labor), an opportunity for intensive agriculture such as irrigation farming. Although small-scale irrigation provides wider benefits for the livelihood improvement of rural farm households, some of them owned irrigation while others not yet, due to different reasons. This irrigation ownership difference leads to household income disparity. To this end, this paper is aimed to analyze the effect of small-scale irrigation on households’ income. A two-stage sampling procedure was used to first select peasant associations and then sample respondents. Descriptive statistics and Heckman’s two-stage estimation were used to estimate the effects of small-scale irrigation on households’ income. The results of the study indicated that in addition to land and livestock, access and utilization to working capital is determinant for irrigation utilization decision that leads to better income. Irrigation users comparatively participate in social positions and owned comfortable residence homes than non-users. Formation of self-help cooperatives and saving-credit associations in rural areas bridges producers with their clientele solving the working capital deficiencies.