The dynamic effects of irrigated land allocation on wheat production in Ethiopia

Although previous studies in developing countries like Ethiopia have extensively documented the benefits of irrigation, these studies rely primarily on cross-sectional data. Consequently, analysis of the effects of irrigated land allocation on national crop production from a longitudinal perspective remains limited. This study examines the dynamic effects of irrigated land allocation on wheat production in Ethiopia, using World Bank and FAOSTAT data from 2000 to 2021. We employed an autoregressive distributed lag (ARDL) model to estimate long-run and short-run cointegration. The empirical results revealed that irrigated land allocation has a statistically significant positive impact on wheat production in both the long and short term. Notably, the long-term elasticity shows that a one-hectare increase in irrigated land is associated with a 36% rise in wheat production. Moreover, livestock manure, agriculture water use efficiency, and chemical fertilizer consumption positively influence wheat production in both the short and long term, while agricultural credit has a negative effect. The result further shows that despite steady growth in wheat production during the study period, domestic supply has continually lagged behind demand, forcing the country to rely on commercial imports. Irrigation development has also lagged behind potential capacity throughout the entire study period. To address Ethiopia's wheat supply shortfall and growing food demand, this study recommends expanding irrigation into underutilized areas, modernizing existing infrastructure, and increasing access in both lowland and highland regions. It is also critical to enhance monitoring of agricultural loans to prevent misallocation.