Welfare effects of small-scale farmers' participation in apple and mango value chains in Ethiopia

ABSTRACT This study examines the effects of participation in the fruit value chain on small-scale farmers' economic welfare in Ethiopia's Upper-Blue Nile Basin, focusing on apple and mango crops. This household economic welfare is measured by the consumption expenditure approach. Primary data were collected from a random sample of 384 households, 211 of which are fruit value chain participants and the rest are non-participants. The endogenous switching regression model was used to control for selection bias and unobserved heterogeneity. The study finds that the more apple and mango farmers join the value chain, the higher their consumption expenditure becomes. On average, the apple and mango value chain participation increased household consumption expenditure by about 17% and 18.5%, respectively. Overall, the results indicate a positive economic welfare effect of small-scale farmer participation. Hence, supporting small-scale farmers is imperative and a reasonable policy approach to improve their economic welfare in rural Ethiopia.