Examining linkages among multiple sustainable development outcomes: does the productive safety net program increase...

In Ethiopia, on-farm agrobiodiversity and the Productive Safety Net Program (PSNP) play a key role in building smallholders' resilience. However, the impact of PSNP on on-farm agrobiodiversity is not yet well investigated. In this paper, we develop an analytical framework that links PSNP participation to on-farm agrobiodiversity. Both diverse farming systems and PSNP require labour inputs while providing income stabilization, which might result in a negative relationship between the two. Conversely, higher income from PSNP might allow farmers to increase their long-term on-farm investments, as opposed to the strategies oriented toward the highest immediate profit or calorie intake outcome. We base our empirical analysis on the World Bank's Ethiopian Socioeconomic Survey, a panel dataset encompassing nearly 3000 respondents and a Tobit model, based on Difference-in-Difference and the Propensity-Score Matching methods. We find that Ethiopia's PSNP has a negative impact on farm labour input, both in terms of labour intensity and duration. Furthermore, our results show that participation in the program is associated, on average, with lower on-farm crop diversity. We conclude that the PSNP participation may be crowding-out production stabilizing farming activities, such as intercropping or cover cropping, that are more labour intensive. Our findings call for embedding tools in the new phase of the PSNP (2021-2025) that could incentivise on-farm resilience-oriented investments, in particular leading to higher crop diversification.