WACHEMO UNIVERSITY(DURAME CAMPUS)

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

THE EFFECTS OF AGRICULTURAL PRACTICES ON LOCAL

ECONOMIC DEVELOPMENT IN HADERO TUNTO ZURIA WOREDA

BY

Tesfatsion Tagesse(I'd _5754)

ADVISOR: Melese Girma(MSc)

THE RESEARCH PROPOSAL SUBMITTED TO WACHEMO UNIVERSITY,

COLLEGE OF BUSINESS AND ECONOMICS, DEPARTMENT OF ECONOMICS

IN PARTIAL FULFILLMENT FOR THE REQUIREMENT FOR THE DEGREE OF

BACHELOR OF ART IN ECONOMICS

DECEMBER ,2024

DURAME, ETHIOPIA

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 Acknowledgement

Thank you God for your unobservable and effective protection.you are the
Shepherd of my soul and my present form is the result of your
protection.

I would like to express my sincere thanks to my advisor Melese

Girma(MSC ) for his guidance,assistance and supervision.

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 Acronyms

GDP-Gross Domestic Product

FGD-Focusing Group Discussion

ETB-Ethiopian Birr

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 List of tables

Table-1:work plan time schedules.

Table-2:budget breakdown table.

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 Table of contents
Acknowledgement ..................................................................................................................¡

Acronyms.................................................................................................................................¡¡

List of tables.............................................................................................................................¡¡¡

Table of contents....................................................................................................................¡¡¡¡

CHAPTER ONE: INTRODUCTION..............................................................................................2

1.1 Background of the Study.......................................................................................................2

1.2. Statement of the problem......................................................................................................3

1.3. Research questions................................................................................................................4

1.4 Objective Of The Study

1.4.1. General objective...........................................................................................................4

1.4.2. Specific objectives.........................................................................................................5

1.5 Significance Of The Study

1.6 Scope Of The Study

1.7 Limitation Of The study

1.8 Organization Of The Study Paper

CHAPTER 2: LITERATURE REVIEW.........................................................................................7

2.1 Theoretical Review

2.1.1The Role of Agriculture in Economic Development...........................................................7

2.1.2 Agricultural Practices in Ethiopia.......................................................................................7

2.1.3 Economic Impact of Agricultural Practices........................................................................8

2.1.4 The Role of Market Access and Infrastructure...................................................................8

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 2.1.5 The Role of Agricultural Extension Services.....................................................................9

2.1.6 Challenges in Agricultural Development in Rural Ethiopia...............................................9

2.2Empirical Review ...............................................................................................................10

CHAPTER THREE: RESEARCH METHODOLOGY................................................................11

3.1 Description Of The Study Area

3.2 Research Design..................................................................................................................11

3.3. Population of this study......................................................................................................11

3.4 Sampling Procedure.............................................................................................................12

3.5 Data Collection Methods.....................................................................................................12

3.6 Data Analysis.......................................................................................................................13

3.6.1. Quantitative Data Analysis..........................................................................................13

3.6.2. Qualitative Data Analysis............................................................................................14

3.7Ethical Considerations..........................................................................................................14

CHAPTER FOUR: WORK PLAN AND BUDGET BREAK......................................................16

4.1. Work plan...........................................................................................................................16

4.2. Budget breakdown..............................................................................................................16

REFERENCES..............................................................................................................................18

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 CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Agriculture plays a crucial role in the economic development of many countries, particularly in
sub-Saharan Africa, where the sector is the main source of income and employment for rural
populations. In Ethiopia, agriculture is central to the economy, contributing around 40% of the
Gross Domestic Product (GDP) and employing approximately 70% of the population, mostly in
rural areas (World Bank, 2020). The agricultural sector in Ethiopia is primarily composed of
smallholder farmers who rely on subsistence farming, with limited access to modern agricultural
techniques, infrastructure, and markets. This results in relatively low productivity, which in turn
affects household income levels, poverty reduction efforts, and the overall economic
development of rural areas (Tadesse & Alemu, 2017).

Hadero Tunto Zuria Woreda, located in the Central Ethiopia Regional state, is predominantly
rural, with the local economy largely based on agriculture. The woreda is characterized by
diverse farming systems, including crop production, livestock farming, and agro-pastoral
activities. However, the agricultural practices in the area are largely traditional, with limited use
of modern farming technologies and low access to market opportunities. As such, there are
significant challenges to enhancing agricultural productivity and improving the livelihoods of
local communities (Baye, 2019).

Agricultural practices have the potential to influence local economic development in various
ways. Improved farming techniques can lead to higher yields, increased household income, and
better food security (Asrat & Alemu, 2017). Furthermore, the availability of agricultural
extension services and access to markets plays a vital role in helping farmers adopt modern
technologies and participate in the broader economy. In contrast, the lack of infrastructure, poor
market access, and limited agricultural knowledge often hinder the economic potential of rural
communities (Haggblade et al., 2018).

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Thus, understanding the effect of agricultural practices on local economic development in
Hadero Tunto Zuria Woreda is crucial for identifying effective strategies that can enhance
agricultural productivity and, ultimately, improve the well-being of rural households. This study
aims to fill the gap in knowledge regarding the direct and indirect effects of agricultural practices
on economic development in this region.

1.2. Statement of the problem

Agriculture remains the primary livelihood for most rural communities in Ethiopia, and its
influence on economic development is undeniable. In regions like Hadero Tunto Zuria Woreda,
agriculture not only supports the local economy but also shapes the social and economic
landscape. However, despite its central role, agricultural practices in many rural areas, including
Hadero Tunto Zuria woreda, often remain traditional, characterized by low productivity and
limited technological advancement (Baye, 2019). This hampers the sector’s potential to drive
substantial local economic growth and improve the welfare of rural households.

In Hadero Tunto Zuria Woreda, farmers largely rely on subsistence farming, with most
practicing rain-fed agriculture, which is highly vulnerable to climatic variations and market
fluctuations (Tadesse & Alemu, 2017). Although there have been government and NGO efforts
to introduce modern agricultural techniques, many farmers continue to face significant barriers,
including limited access to quality inputs, poor infrastructure, and inadequate access to markets
(Haggblade et al., 2018). As a result, agricultural practices often fail to generate sufficient
income to lift households out of poverty or contribute effectively to local economic development.

Moreover, there is limited empirical research on how different agricultural practices specifically
affect economic outcomes in rural Ethiopian communities, such as income generation,
employment, and poverty alleviation. While several studies have focused on general agricultural
development in Ethiopia (Kimenyi, 2015), very few have analyzed the specific dynamics in
smaller, less studied regions like Hadero Tunto Zuria Woreda. This lack of region-specific data
creates a gap in understanding how agricultural practices interact with broader economic factors,
such as market access, infrastructure, and social capital, in driving local economic development.

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The problem, therefore, is twofold: (1) the limited adoption of modern agricultural practices in
Hadero Tunto Zuria Woreda, and (2) the lack of comprehensive analysis on how these practices
influence the local economic development of the area. Without this understanding, it is
challenging for policymakers and development organizations to design effective interventions
that support the growth of the agricultural sector in ways that benefit local communities
economically and sustainably.

This study seeks to fill this gap by assessing the impact of agricultural practices on the local
economic development of Hadero Tunto Zuria Woreda, specifically focusing on household
income, employment generation, market access, and poverty reduction.

1.3. Research questions

1. What are the key agricultural practices in Hadero Tunto Zuria Woreda, and how do they
influence local economic activities?

2. How do agricultural practices in Hadero Tunto Zuria Woreda affect household income,
employment opportunities, and poverty levels within the local community?

3. What role do market access, agricultural extension services, and infrastructure play in
enhancing the economic outcomes of agricultural practices in Hadero Tunto Zuria Woreda?

1.4. Objectives of the study

1.4.1. General objective

 To analyze the effects of agricultural practices on local economic development in Hadero

Tunto Zuria Woreda

1.4.2. Specific objectives

 To identify and analyze the primary agricultural practices in Hadero Tunto Zuria Woreda
and their contribution to local economic activities
 To examine the relationship between agricultural practices and household income,
employment generation, and poverty reduction in the woreda

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  To evaluate the role of market access, agricultural extension services, and infrastructure
in enhancing the effectiveness of agricultural practices for economic development in
Hadero Tunto Zuria Woreda

1.5. Significance of this study

This study is significant because it will provide valuable insights into how agricultural practices
influence local economic development in Hadero Tunto Zuria Woreda. By understanding the
relationship between farming methods, income generation, and poverty reduction, the research
can inform policymakers and development organizations about effective strategies to enhance
agricultural productivity and improve rural livelihoods. The findings will also contribute to the
broader understanding of agricultural development in Ethiopia, particularly in less-studied
regions, and may guide future interventions aimed at promoting sustainable economic growth in
rural communities.

1.6. Scope of this study

This study focuses on Hadero Tunto Zuria Woreda, located in the Kembata zone, part of the
Central Ethiopia Regional State. Hadero Tunto Zuria Woreda is primarily an agricultural area,
with a diverse range of farming activities, including both crop production and livestock farming.
The research will investigate how local agricultural practices contribute to economic
development in the region, specifically focusing on household income, employment
opportunities, and poverty alleviation.

Key areas of analysis include:

 The predominant agricultural practices in the woreda (e.g., crop cultivation, livestock
farming)
 The role of agricultural extension services, market access, and infrastructure in improving
agricultural productivity

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  The economic impacts of agriculture on local communities, such as income generation,
employment, and poverty reduction

The study will involve fieldwork in Hadero Tunto Zuria Woreda, collecting data from local
farmers, government officials, and agricultural experts to understand the dynamics between
agriculture and economic development in this specific context.

1.7Limitations of this study:

Geographical Limitation: The study is limited to Hadero Tunto Zuria Woreda in Central
Ethiopia, and the findings may not be directly applicable to other regions within Ethiopia or sub-
Saharan Africa that have different agricultural practices, environmental conditions, or economic
circumstances. Therefore, the results may not be generalizable to other rural areas in the country.

Data Availability: Limited availability of reliable and recent data on agricultural practices and
economic outcomes may pose a challenge to the study. Some information may not be easily
accessible, particularly in rural areas where data collection systems may not be well-established.

Time and Resource Constraints: Due to limited time and resources, the study will focus on a
relatively small sample of households in the woreda. This may limit the ability to capture the full
diversity of agricultural practices and economic outcomes within the community, affecting the
depth of the analysis.

Despite these limitations, the study aims to provide critical insights into the role of agriculture in
driving local economic development in Hadero Tunto Zuria Woreda, contributing valuable
knowledge to the broader discourse on rural development in Ethiopia.

1.8 Organization Of The Study

This study include the four chapters.

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 CHAPTER TWO

REVIEW OF LITERATURE

2.1 Theoretical Literature Review

This chapter reviews the existing literature on the relationship between agricultural practices and
economic development in rural areas, with a specific focus on Ethiopia. The literature review
examines various dimensions of agricultural development, including productivity, income

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generation, market access, and the role of government services. It also explores the importance
of infrastructure and agricultural innovation in rural economic growth, drawing from global and
Ethiopian-specific studies.

2.1.1 The Role of Agriculture in Economic Development

Agriculture has long been recognized as a key driver of economic development, especially in
developing countries. In Ethiopia, agriculture is the backbone of the economy, contributing
significantly to GDP and employing the majority of the population in rural areas (World Bank,
2020). Studies show that improving agricultural productivity can lead to better economic
outcomes for rural communities, including increased income, enhanced food security, and
poverty reduction (Tadesse & Alemu, 2017). The Ethiopian economy is heavily dependent on
agriculture, with smallholder farmers accounting for the majority of agricultural output (Baye,
2019).

In rural areas like Hadero Tunto Zuria Woreda, agricultural productivity is often constrained by
traditional farming practices, limited access to modern inputs, and vulnerability to climate
change (Haggblade et al., 2018). However, targeted interventions in agriculture, such as
improved seeds, fertilizers, and modern irrigation techniques, have been shown to enhance
productivity and stimulate local economic development (Kimenyi, 2015).

2.1.2 Agricultural Practices in Ethiopia

Agricultural practices in Ethiopia vary greatly across regions due to differences in climate,
geography, and cultural practices. In areas like Hadero Tunto Zuria, agriculture is mainly rain-
fed and dominated by smallholder farmers. Common practices include mixed crop-livestock
farming systems, with crops like teff, maize, and wheat grown alongside livestock such as cattle,
sheep, and goats (Baye, 2019).

Despite these practices, challenges persist, such as low yields, inefficient use of resources, and
limited access to markets. The introduction of modern agricultural techniques, including
mechanization, irrigation, and the use of chemical inputs, has the potential to increase
productivity, but adoption has been slow due to lack of information, high costs, and resistance to

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change (Tadesse & Alemu, 2017). The role of agricultural extension services in promoting these
modern practices is critical, as it helps farmers gain access to new technologies and learn best
practices for improving productivity (Getachew & Mohammed, 2020).

2.1.3 Economic Impact of Agricultural Practices

Agriculture directly impacts rural economic development through income generation and job
creation. Studies have shown that agricultural productivity has a significant positive effect on
rural incomes and poverty reduction. In Ethiopia, increasing agricultural output has been linked
to improved household income and enhanced food security (Asrat & Alemu, 2017). Farmers who
adopt modern techniques and diversify their agricultural activities often experience higher
returns, which can lead to a reduction in rural poverty (Haggblade et al., 2018).

In the context of Hadero Tunto Zuria, increased agricultural productivity could provide a
pathway for lifting households out of poverty by improving income levels and creating
employment opportunities. Moreover, improved agricultural practices can enhance the local
economy by promoting trade and increasing access to markets, thus stimulating local commerce
and development (Baye, 2019).

2.1.4 The Role of Market Access and Infrastructure

Market access and infrastructure play a crucial role in determining the success of agricultural
practices. For smallholder farmers in rural Ethiopia, access to markets is often limited by poor
roads, inadequate transportation systems, and high transaction costs (Haggblade et al., 2018). In
many rural areas, including Hadero Tunto Zuria, the lack of market access results in low prices
for agricultural products and limited economic opportunities for farmers.

Studies have shown that improving infrastructure—such as roads, storage facilities, and
irrigation systems—can significantly enhance agricultural productivity and rural economic
growth (Kimenyi, 2015). When farmers have access to reliable markets, they are able to sell their
products at higher a price, which boosts their income and contributes to economic development.
Furthermore, improved transportation and storage systems reduce post-harvest losses, allowing
farmers to maximize the value of their crops (Haggblade et al., 2018).

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2.1.5 The Role of Agricultural Extension Services

Agricultural extension services are essential for the adoption of new farming techniques,
providing farmers with the knowledge and skills needed to increase productivity. These services
offer training, technical advice, and access to inputs such as improved seeds and fertilizers. In
Ethiopia, agricultural extension services have been a key policy tool for increasing agricultural
productivity and fostering economic development in rural areas (Getachew & Mohammed,
2020).

In Hadero Tunto Zuria, agricultural extension services could help overcome barriers to the
adoption of modern farming methods. By providing farmers with technical support and access to
new technologies, these services can increase crop yields, improve soil fertility, and enhance
overall agricultural output. Additionally, extension workers can help farmers adopt sustainable
agricultural practices that mitigate the effects of climate change, thus promoting long-term
economic stability (Baye, 2019).

2.1.6 Challenges in Agricultural Development in Rural Ethiopia

While agriculture offers significant potential for economic development, various challenges
hinder its growth. In rural Ethiopia, these challenges include land degradation, limited access to
finance, inadequate infrastructure, and climate change (Tadesse & Alemu, 2017). In regions like
Haderon Tunto Zuria, farmers often lack the capital to invest in modern farming equipment and
inputs, which limits their ability to increase productivity. Furthermore, climate change has led to
erratic rainfall patterns, reducing the reliability of rain-fed agriculture and exacerbating food
insecurity (Baye, 2019).

Despite these challenges, targeted interventions, including climate-smart agriculture, better

access to credit, and improved extension services, can help mitigate the risks and promote
sustainable agricultural development. Research suggests that by focusing on smallholder farmers
and addressing the systemic issues that limit agricultural growth, it is possible to achieve long-
term economic development in rural Ethiopia (Haggblade et al., 2018).

2.2 Empirical Review

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2.3 Conceptual Frame

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 CHAPTER THREE:

RESEARCH METHODOLOGY

3.1 Description Of The Study Area

This chapter outlines the research methodology used to analyze the effect of agricultural
practices on local economic development in Hadero Tunto Zuria Woreda. It describes the
research design, study area, sampling procedure, data collection methods, and data analysis
techniques. The methodology is designed to ensure that the research objectives are addressed
systematically and that the findings will provide valuable insights into the agricultural economy
of the region.

3.2 Research Design

The study employs a descriptive research design to analyze the effect of agricultural practices on
local economic development in Hadero Tunto Zuria Woreda. This design is appropriate because
it allows for the collection of detailed data on the characteristics of agricultural practices and
their direct and indirect effects on household income, employment, and local economic
development. Additionally, the study adopts a mixed-methods approach, combining both
qualitative and quantitative data to gain a comprehensive understanding of the issues at hand.

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3.3Population of this study

The study is conducted in Hadero Tunto Zuria Woreda, located in the Central Ethiopia. The
woreda is predominantly rural, with agriculture as the main source of livelihood for most
households. Hadero Tunto Zuria is divided into 13 rural kebeles (administrative units), each with
its own distinct agricultural practices and socio-economic conditions.

For the purpose of this study, three kebeles have been selected as the focus areas for data
collection: Sodicho Kebele, Mandoye Kebele and Ameleka Kebele.

These kebeles are chosen for their distinct agricultural practices and diverse socio-economic
characteristics, which will provide a representative sample of the agricultural landscape in
Hadero Tunto Zuria Woreda. They also vary in terms of access to infrastructure, market access,
and agricultural extension services, which are key variables in this study.

3.4 Sampling Procedure

Given that Hadero Tunto Zuria Woreda has 13 rural kebeles, it was not feasible to include all of
them in the study due to time and resource constraints. Therefore, three kebeles (Sodicho,
Mandoye, and Ameleka) were selected purposively based on the following criteria:

Agricultural diversity: The kebeles have varying agricultural practices, including crop
cultivation and livestock farming, which is important for capturing different economic dynamics.

Accessibility: These kebeles are geographically representative of different areas within the
woreda, ensuring that data collected reflects diverse local conditions.

Socio-economic variation: These kebeles have different levels of access to agricultural

extension services, infrastructure, and market access, allowing for a more comprehensive
understanding of the factors influencing agricultural development.

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From each kebele, a random sampling technique will be used to select individual households.
The sample will be drawn from the list of registered farmers provided by the local
administration, ensuring that all households have an equal chance of being included in the study.

A total of 120 households (40 from each kebele) will be randomly selected to participate in the
survey, with a focus on farmers engaged in both crop and livestock farming. This sample size is
deemed sufficient for generating meaningful data on the economic impacts of agricultural
practices.

3.5 Data Collection Methods

To achieve the research objectives, the study will use both primary and secondary data sources:

Primary Data Collection:

Household Surveys: A structured questionnaire will be administered to the selected households

in the three kebeles. The survey will collect data on agricultural practices, household income,
employment generation, access to markets, and infrastructure. The questionnaire will include
both closed and open-ended questions to capture both quantitative and qualitative data.

Key Informant Interviews: Interviews will be conducted with local agricultural experts,
government officials, and agricultural extension workers. These interviews will provide
additional insights into the challenges and opportunities related to agricultural practices in the
woreda, as well as the role of government programs and services in fostering agricultural
development.

Focus Group Discussions: A focus group discussion (FGD) will be held with a group of
farmers from each kebele. The discussions will provide deeper qualitative insights into the
experiences, perceptions, and challenges of local farmers regarding agricultural practices and
economic development.

Secondary Data Collection:

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Literature Review: Relevant reports, publications, and documents from government agencies,
development organizations, and academic studies will be reviewed to provide context for the
research and support the analysis.

Official Statistics: Data on agricultural production, market access, and economic indicators will
be obtained from the woreda agricultural office and other local government sources.

3.6 Methods of Data Analysis

The data collected will be analyzed using both quantitative and qualitative methods:

3.6.1. Quantitative Data Analysis

The survey data will be coded and entered into statistical software (such as SPSS or Excel) for
analysis. Descriptive statistics (e.g., frequencies, percentages, and means) will be used to
summarize the demographic characteristics of the sample, as well as the key variables related to
agricultural practices, household income, employment, and access to markets. Inferential
statistics, such as correlation or regression analysis, will be used to identify relationships
between agricultural practices and local economic development outcomes.

3.6.2. Qualitative Data Analysis

The data from key informant interviews and focus group discussions will be transcribed and
analyzed thematically. Thematic analysis will be used to identify recurring themes and patterns
in the responses, providing a deeper understanding of the factors influencing agricultural
development in Haderon Tunto Zuria. The qualitative data will complement the quantitative
findings, allowing for a more comprehensive interpretation of the results.

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 CHAPTER FOUR: WORK PLAN AND BUDGET BREAK

4.1. Work plan

Table-1 Below is a suggested work plan for the study on the effect of agricultural practices on
local economic development in Hadero Tunto Zuria Woreda:

November December January February March April

Activity
2024 2024 2025 2025 2025 2025
Literature Review X X
Research Design &
X
Proposal
Instrument
X
Development
Fieldwork Preparation X
Data Collection X X
Data Entry and
X
Cleaning
Data Analysis X
Interpretation of
X
Findings
Report Writing X X
Review and Revision X
Final Submission X

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4.2. Budget breakdown

The following is a financial breakdown of the expenses associated with the research project on
the effect of agricultural practices on local economic development in Hadero Tunto Zuria
Woreda. The budget is structured to ensure the efficient use of resources while covering the
necessary activities to complete the study.

Table- 2. Financial Breakdown for the Research Project

Estimated Cost
Item Description
(ETB)
1. Literature Review & Costs for accessing books, journal articles, and
1,000
Research Materials reports, including printing and photocopying.
Travel expenses to obtain research permits,
2. Fieldwork Preparation 1,500
communication with local authorities, and logistics.
Costs for travel to the selected kebeles, conducting
3. Data Collection (Survey) 5,000
household surveys, interviews, and FGDs.
Purchase of data entry tools/software (e.g., SPSS,
4. Data Entry and Software 1,000
Excel), and data processing costs.
Transport, refreshments, and other logistics for
5. Focus Group Discussions 1,500
focus group discussions with farmers.
Unforeseen expenses, small equipment, and
6. Miscellaneous Expenses 1,000
stationery for data collection and reporting.
7. Report Writing & Printing of final reports, thesis binding, and
2,500
Printing preparation of final copies.
Transport costs for travel between kebeles and the
8. Transportation 1,500
woreda during data collection and site visits.
Total 15000

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 REFERENCES

Asrat, P., & Alemu, T. (2017). The impact of agricultural productivity on rural income: A case
study in Ethiopia. Agricultural Economics Review, 8(1), 45-62.
Baye, M. (2019). Agricultural diversification and its impact on rural economies in Ethiopia.
Ethiopian Journal of Development Studies, 22(3), 56-73.
Haggblade, S., Hazell, P., & Reardon, T. (2018). The rural transformation and its impact on
economic development. World Development, 105, 231-247.
Tadesse, G., & Alemu, T. (2017). Agricultural development and its economic implications in
rural Ethiopia. Journal of Rural Economics, 33(2), 130-142.
World Bank. (2020). Agriculture and rural development. World Bank Group. Retrieved from
https://www.worldbank.org/en/topic/agriculture
Kimenyi, M. S. (2015). The role of agriculture in rural economies: A case study of East Africa.
Economic Development Quarterly, 29(1), 78-92.
Getachew, D., & Mohammed, A. (2020). The role of agricultural extension in improving farm
productivity in Ethiopia. Agriculture and Development, 12(4), 99-11

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