The Impact of land holding size on farmer livelihoods in indigenous agricultural system of southern Ethiopia: evidence from a continuous treatment approach

Abstract

Indigenous food production systems are promising strategies to improve the livelihood of smallholder farmers while conserving the natural resource. However, there is a lack of information on the landholding size intensity in relation with farmers’ livelihood thus reach farmer expand their holding by illegal purchasing. Hence, the objectives of this study were to provide empirical evidence on the impact of landholding on the livelihood of farmer households. A multistage sampling technique was employed to take 270 sample respondents from 14 rural kebeles. Primary data were collected using a structured survey questionnaire, focus group discussion (FGD) and key informant interviews. The impact function was obtained by estimating the average annual expenditure at different levels of land holding. Both descriptive statistics and the Generalized Propensity score matching (GPSM) model were used for data analysis. The descriptive result revealed that the area can be categorized under a low level of household asset holding with 0.67 ha landholding and 1.56 TLU livestock holding. The econometric result shows that the land holding starting from minimum intensity (< 0.0312 ha) farmer livelihood increased as landholding size increased and the marginal effect of landholding size reached optimum level at 6 ha landholding and beyond which the intensify of landholding size resulted in a negative effect on farmers livelihood. The farmer households with minimum landholding intensity (< 0.0312 ha) were more dependent on off-farm activities, while formers with land holding > 6 ha also collected more land by the informal land market for no value. The results suggest that the concerned body has to support almost landless farmers through appropriate policy while discouraging farmers with more than optimum landholding size through various policy options including taxation.