Financial Analysis of Small Scale Irrigation Based Vegetable Production in Wondo Genet District of Sidama Zone, Southern Ethiopia

Abstract

Agriculture in Ethiopia is a prime economic sector from which more than 85% of thecitizens earn their livelihoods. In this connection, small scale irrigation basedagriculture contributes at large to movements to higher productivity and sustaineddevelopment farming system. To meet the objectives, the study used data that camefrom 120 vegetable producers. The data were collected from November 2014-March30, 2015. This study was aimed at analyzing the profitability of vegetableproduction, identifying the major determinants of gross annual income andidentifying the major farm and market level constraints of small scale irrigationbased vegetable production. The study used the distractive statistics (gross margin,benefit-cost ratio and net benefit-cost ratio) and the econometric model (the multiplelinear regression model) approaches to address the study objectives.. About 80% ofthe respondents were engaged in irrigation based vegetable production. Theaverage age of the respondents was 39 years with minimum and maximum age of18 and 70 years, respectively. The minimum and maximum gross income perhectare was 1200 and 52600 Birr with average gross income of 12093.77 Birr. Theaverage production and marketing cost accounted for 93.9% and 6.1%, respectively;whereas, irrigation cost and labour cost respectively accounted for 25% and 24%.The mean operating ratio and benefit cost ratio was accordingly 0.48 and 2.1. On theother hands, among 13 variables used in multiple regression analysis, number ofvegetables grown, size of irrigated land, education, costs of seed, fertilizer, andirrigation correlated positively and significantly with annual gross income.. Thus,considering the important variables according to the study report is key in effortsdone to improve agricultural productivity and sustainability in the study areas inparticular.