Energy options for irrigated agriculture and their impacts on returns: Evidence from Ethiopia

Irrigated agriculture often relies on modern energy technologies, but farmers must choose between options with different costs, benefits, and long-term returns. This study employs a mixed-methods approach combining a comprehensive household- and plot-level survey conducted in Ethiopia during 2016/17 with qualitative evidence from focus group discussions and key informant interviews, as well as bio-physical and climatic data linked to geo-referenced household and plot locations. The quantitative dataset includes 464 rural households and 1,037 irrigated plots across four regions and ten districts of Ethiopia. Because farmers self-select into different irrigation energy technologies, simple comparisons of returns across users may produce biased estimates. To address this issue and strengthen causal inference, the study applies a multivalued treatment effects framework using the Inverse Probability Weighted Regression Adjustment (IPWRA) estimator to construct counterfactual outcomes and compare net returns across irrigation energy systems. Results show that while diesel pumps yield the highest total value of production per hectare, the estimated mean net returns are higher with electric pumps and manual systems. Increased fuel and maintenance costs are the main reasons for the low net return of diesel pump systems. These findings underscore the importance of promoting affordable, reliable, and sustainable irrigation energy technologies to address high energy costs, a significant constraint on improving agricultural productivity and farm net returns in smallholder irrigation systems, while supporting rural electrification, climate-resilient agriculture, and sustainable irrigation development in Ethiopia.