20^th International Conference of Ethiopian Studies (ICES20)
Mekelle University, Ethiopia

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THE ECONOMIC IMPACT OF KOGA DAM IRRIGATION WATER ON AGRICULTURE IN NORTHWEST ETHIOPIA: EVIDENCE FROM A STRUCTURAL EQUATION MODEL [Abstract ID: 0602-16]

MARKOSE Chekol Zewdie, Department of Engineering Management, University of Antwerp, Belgium; and Department of Economics, Bahir Dar University, Ethiopia
Steven VAN PASSEL, Department of Engineering Management, University of Antwerp, Belgium; Centre for Environmental Sciences, Hasselt University, Belgium.
Jan COOLS, Department of Engineering Management, University of Antwerp, Belgium and Institute of Environment and Sustainable Development, University of Antwerp, Belgium
Jan NYSSEN, Department of Geography, Ghent University, Belgium
ENYEW Adgo, Department of Natural Resource Management, Bahir Dar University, Ethiopia
AMARE Sewnet, Department of Geography Bahir Dar University, Ethiopia
DAREGOT Berihun, Department of Economics Bahir Dar University, Ethiopia
ZEMEN Ayalew, Bahir Dar University, Ethiopia
Sofie ANNYS, Department of Geography, Ghent University, Belgium

Ethiopia has, recently, constructed a number of multi-purpose dams and has plans to construct more dams in the near future with the goal of supplying energy and irrigation water. One of the constructed dams is the Koga dam, located in the Lake Tana catchment of northwest Ethiopia, supplies water for 7,000 hectares of small holder dry season irrigated land. Ethiopian government believes that dam construction has a positive economic impact on agriculture. However, from a global perspective, the construction of dams has become a controversial issue as a means to improve agricultural production. For instance, in contrary to others, some researchers warn that the dam may actually have cut agricultural production (Strobl, E. & Strobl, R.O., 2011; Duflo & Pande, 2007; and Richter et al. 2010). The aim of this study is, therefore, to examine the economic impact of the Koga dam irrigation scheme for small holder farmers. In this paper, we will present the results of a survey with 450 households in the Koga Dam irrigation scheme. Our approach, Structural Equation Model, is different from the previous research’s. Previous research on the economic impact of dam construction on agriculture is mainly based on simple and partial mappings of bi-variate associations between dam driven irrigation water and agricultural outcomes. To overcome this fragmentation and polarization, we need to provide and empirically test an integrative framework which is different from prior researchers in two ways: First, it simultaneously takes account of the two dependent variables (Household Farming Asset and Crop Revenue). Second, it considers both the direct and indirect effect of availability of dam driven irrigation water on agricultural production. That is, it simultaneously takes account of dam driven irrigation water and yield enhancing modern farm inputs in order to assess the extent to which yield enhancing modern farm inputs mediates the relationship between availability of dam driven irrigation water and crop revenue. This integrative approach will increase our insight into the impact of availability of dam driven irrigation water by revealing why some irrigation scheme achieves higher agricultural productivity performance than others.