questionnaires. Because of missing values, our sample is unbalanced and contains 4,126 observations on 2,104 households.<sup>18</sup> The survey data was supplemented with district level data on output prices from Ethiopia’s Central Statistical Authority and fertilizer prices from the Ministry of Agriculture and Rural Development, Agricultural Marketing Directorate. Data on rainfall for the survey years came from the Ethiopian Meteorological Agency.<sup>19</sup> The climate variable was constructed from average values (1960-90) of historical spatial data prepared by the Climate Research Unit (Mitchell et al. 2002). For each year of the panel, we construct a measure of weather by taking the ratio of average rainfall for the growing season over the thirtyyear average for the same period and place.

Consistent with the national figures, the 2006 wave survey data show that the Amhara and Oromia regions have higher proportions of fertilizer user households (61 % and 58%, respectively) followed by SNNP and Tigray regions (57% and 55%, respectively). However, in terms of consumption per hectare of fertilized land, SNNP and Tigray regions exhibit higher fertilizer use with per hectare averages of 153 kg and 144 kg, respectively, followed by Amhara and Oromia regions with per hectare averages of 129 kg and 111 kg, respectively. The lower intensity of fertilizer use in Oromia may be related to the region's soil type<sup>20</sup> .

Table 1 indicates that around 68% and 63% of the households in the sample used one or multiple types of fertilizer (DAP, Urea or mix of the two) in 2004 and 2006, respectively. The average fertilizer consumption increased from 42 to 55.7 kilograms per hectare in between the two rounds when both user and non-user households are considered. A similar trend is also observed when user households alone are considered as average consumption has increased from 61 to 88 kilograms per hectare during the same period. At a plot level, average consumption per a hectare of fertilized plot increased from 116 to 167 kilograms per hectare. Though fertilizer use increased significantly, it remained below the recommended 200 kilograms per hectare mark.

As discussed, several factors may explain the low fertilizer adoption rate in Ethiopia. However, even when farmers adopt chemical fertilizers, the application of fertilizer is below recommended rates. The problem is further aggravated by the poor timing of the fertilizer application; a shortage of well-trained agricultural extension workers; and the generally ineffective transmission of the government's research outputs. For instance, while the Ethiopian Agricultural Research Institute recommends the application of urea over two cycles, the 2004 wave of the panel data shows that farmers who apply fertilizer do so all at once

> 18 By design, the survey is meant to capture the diverse geography of Ethiopia, and may not be nationally representative of Ethiopian farmers.

> 19 Survey sites were matched with data from the closest weather station.

> 20 For instance, the Ethiopian Ministry of Agriculture study recommends a lower dose of fertilizer per hectare (at 150 kg per ha. vs. the usual 200 per ha.) for vertisols soil type with improved Durhum wheat seed type.

8