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The aim of this paper is to better understand farmers' perception of the relevance of different development intervention programs. Farmers' subjective ranking of agricultural problems and their preference for development intervention are elicited using a stated preference method. The factors influencing these preferences are determined using a random utility model. The study is based on a survey conducted in the Hunde-Lafto area of the East Ethiopian Highlands. Individual interviews were conducted with 145 randomly selected farm households using semi-structured questionnaires.The study suggests that drought, soil erosion and shortage of cultivable land are high priority agricultural production problems for farmers. Low market prices for farm products and high prices of purchased inputs also came out as major problems for the majority of farmers. Farmers' preferences for development intervention fall into four major categories: market, irrigation, resettlement, and soil and water conservation. Multinomial logit analysis of the factors influencing these preferences revealed that farmer's specific socioeconomic circumstances and subjective ranking of agricultural problems play a major role. It is also shown that preferences for some interventions are complementary and need to be addressed simultaneously. Recognition and understanding of these factors, affecting the acceptability of development policies for micro level implementation, will have a significant contribution to improve macro level policy formulation.

The aim of this paper is to analyze whether investment in soil and water conservation results in a higher yield and income and/or mitigate variability in yield and income to subsistence farm households in the Hunde-Lafto area. Net returns from crop production with and without soil and water conservation (SWC) are compared based on stochastic dominance (SD) criteria. A non-parametric first order SD and normalized second order are used for data analysis. Analysis is based on the Soil Conservation Research Program (SCRP) database for the Hunde-Lafto research unit. The results of the analysis suggest that adopting a conservation strategy results in higher grain yield and net return than in not adopting. The normalized second order SD analysis results do not support the hypothesis that conservation strategy is unambiguously better than a noconservation strategy in reducing variability in yield and net return to farmers. However, conservation strategy has shown second order dominance at lower levels of yield and income that often correspond to unfavorable rainfall conditions. This makes it a preferred strategy to cope with the most prevalent risk factor of moisture shortage. Therefore, appropriate policies to help and encourage farmers to adopt SWC structures will contribute to improving the welfare of subsistence farm households in the study area and in other similar settings in the country. Designing and implementing SWC techniques that may result in unambiguous second order SD dominance will further improve the desirability and adoption of conservation measures. Copyright Springer 2005erosion, Ethiopia, net return, soil and water conservation, stochastic dominance, Q24, renewable resources and conservation,

This paper analyses the determinants of households' willingness to pay (WTP) for quality water supply, using the contingent valuation method (CVM). The study was conducted with randomly selected households in the factory villages of Wonji Shoa Sugar Estate, Ethiopia. The value elicitation method used is a close ended format questionnaire with additional close ended format, and open ended follow up questions which is closer to the market scenario respondents are familiar with. The empirical model used in this study is the Tobit model. The result of the study revealed that income of the household, education level of the respondent, reliability on existing water supply, respondent perception about quality of the existing water supply, household family size and age of the respondent are significant variables that explain WTP. The mean WTP for quality water supply is found to be $0.025 per 20 litres which is well above the current tariff rate of the Oromiya regional government in Ethiopia.