Homogeneous and Heterogeneous Effect of Agricultural Inputs on Crop Productivity of the Three-Grain Crop Types in Ethiopia

Abstract Background Agriculture is a critical source of food and income, making it a key component of initiatives aimed at reducing poverty and ensuring food security across the globe. It is the backbone of Ethiopia's economy, contributing significantly to the country's financial development. The sector earns 88.8 percent of trade profit and contributes 36.7 percent of GDP. The purpose of this paper was to identify the homogeneous and heterogeneous effects of agricultural inputs on crop productivity of the three-grain crop types in Ethiopia. Method The central statistical agency (CSA) provided the data for this study, which covered the entire country from 1990 to 2012 Ethiopian Calendar (E.C). Crop productivity, which is assessed in kilograms per hectare for cereal, pulse, and oil crops, was utilized as the response variable. For three-grain crop types from 1990 to 2012 E.C, the study used the pooled mean group estimate method, which allows for long-run homogeneity effects across cross-sections as well as short-run heterogeneity. Results In the long run, the study found that a one percent increase in fertilizer consumption resulted in a 2.686 percent increase in grain crop productivity in Ethiopia, while a one percent increase in improved seed per hectare and land size, resulted in a 48.31 percent and 10.58 percent increase in grain crop productivity per crop category respectively. Short-run productivity for grain crops increased by 30.29 percent as the amount of improved seed value at one period lag value of commercial farm holders is increased by one percent. In the same way, when the arable land at the first difference is increased by one percent then the productivity of grain crops increased by 40.61 percent. Conclusion The findings of this research showed that in the long run, fertilizer consumption, amount of improved seed use, and arable land area size had homogeneous significant contributions, while in the short run, agricultural inputs like the use of pesticides and improved seed use at first lagged value had heterogeneous significant contributions to grain crop productivity improvement across all cross-sectional units.