IMPACT OF SMALL-SCALE IRRIGATION ON SMALLHOLDER FARMER INCOME: THE CASE OF MELKA BELO DISTRICT EAST HARARGHE ZONE OF OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Irrigation increases productivity by reducing crop failure associated with erratic rainfed agriculture and ensuring smallholder farmers income through improving their production. This study was conducted to identify factors affecting participation decision on small-scale irrigation practices and to estimate the impact of small-scale irrigation on smallholder farm income. Primary data were obtained directly through interview, Focus Group Discussion and key informant interview. Various documents were reviewed to collect the secondary data. Multi stage sampling procedures were applied to select 246 sample households (114 participants and 132 non-participants) from three randomly selected kebeles from 9 kebeles with irrigation access out of 22 kebeles of the district. Both descriptive statistics and econometric model (Propensity Score Matching) were employed to analyze the data. The result revealed that participation in the small-scale irrigation scheme was significantly and positively affected by educational level of the household head, active labor force, cultivated land holding and livestock ownership. But significantly and negatively affected by distance to the nearest market and distance of farm from water source. Average treatment on treated results obtained from the PSM model showed that the average income of participants and non-participants were 14,495.68 ETB/year and 9,291.83 ETB/year respectively. This indicates that participation in small-scale irrigation scheme has increased the household’s farm income by 5203.90 ETB on average, which is higher than that of non-participants. So the study recommends that government and other concerned body should work in expansion and technological development of small-scale irrigation and attempt must made to solve or at least to mitigate the problems faced by smallholder farmers to enhance their participation in small-scale irrigation hence improve their annual income.