Impact of Cluster Farming on Smallholder Wheat Farmers Productivity: The Case of Lemu-Bilbilo and Hetosa Districts of Arsi Zone, Ethiopia

Despite, increasing the agricultural sector's productivity is seen as the main path out of poverty in the country; Ethiopia has not yet realized its full agricultural potential as farming practices are still subsistence-oriented. In this regard, Cluster Farming (CF) is practiced more recently as an effort to transform subsistence farming. However, little is known about CF in the study areas. To this end, this study aimed at identifying the determinants of cluster farming participation and impact of cluster farming on the smallholder wheat farmer’s productivity in the two districts of Arsi Zone, Ethiopia. The study utilized cross-sectional data and multistage stratified sampling procedure to select a total of 381 respondents from the two districts. The study employed both descriptive and endogenous switching regression model. The study result indicates that sex, education level and social responsibility of the household head, farm size, access to training, access to information from government extension, membership in farmer’s cooperative were affect CF participation positively and significantly whereas, distance to the nearest market has a negative and significant effect. Furthermore, the study shows that, if participants had decided not to practice CF, their wheat yield and net wheat value would have decreased by 33.57% and 40.08% respectively. Similarly, had non participants decided to participated, their wheat yield and net wheat value would have been increased by 46.79% and 102.49% respectively. The study recommends, policymakers and development organizations should consider cluster farming as a main strategy to increase smallholder farmer’s productivity. This study also argues that, institutional and government assistance in the areas of education, extension service, training, infrastructure development (particularly access to markets), and cooperatives is critical. Moreover, Policy and development interventions should address the issue of gender disparities in CF participation.