Analyzing the Impact of Climate-Smart Agriculture on Household Welfare in Subsistence Mixed Farming System: Evidence from Geshy Watershed, Southwest Ethiopia

This study assesses the effect of climate-smart agriculture (CSA) technology adoption on the welfare status of households in a subsistence mixed farming system in the Geshy watershed, South West Ethiopia. Due to the changing climate, characterized by changes in patterns of rainfall and rising temperature, the livelihoods of smallholder rural farmers in the Geshy watershed are highly threatened. For these households that are highly dependent on rain-fed agriculture, coping mechanisms, proper adaptation, and mitigation measures are hence important steps to secure household incomes and livelihoods. CSA offers this opportunity. A survey data collected from 384 households cross-sectionally was used to analyze the impact of CSA on food security and household income. The research model used in this study was the endogenous switching regression model which controls unobserved heterogeneity and selection bias, a method used commonly in analyzing adoption impacts. The study comes up with various socioeconomic and agricultural factors influencing food security and CSA adoption. The econometric analysis result shows that the variables that had a significant impact on farmers' decisions for CSA adoption were field soil fertility status, distance to market, asset ownership, and livestock ownership. The average values of the treatment effects of the untreated (ATU) and treated (ATT) result in a positive and significant impact on farmers' welfare. Factors such as household head education, size of labor, livestock size, and asset index significantly affected household income. The level of education, the size of irrigable land, and livestock size influenced food security. This study concludes that households that adopted more CSA practices experience better welfare. Access to inputs, encouraging investments in assets, irrigation, and livestock production, providing incentives to input dealers for rural areas decentralization, and access to weather forecasts need to be improved to exploit the full potential of climate-smart agriculture technologies as policy recommendations.