Weather shocks and agricultural productivity in rural Ethiopia: Role of land cover dynamics

Climate variability poses substantial risks to rainfed agriculture in smallholder farming systems. This study examines the associations between drought shocks, temperature exposure, and agricultural productivity and whether these associations vary with contemporaneous land-cover change in rural Ethiopia. Using nationally representative balanced panel data from three rounds of the Ethiopian Socioeconomic Survey (2011/12, 2013/14, and 2015/16), combined with satellite-derived Enhanced Vegetation Index (EVI) anomalies and climatological temperature measures, we estimate multiway fixed-effects models. Drought shocks and high-temperature exposure are associated with lower agricultural productivity. The estimated drought–productivity association is robust to a more stringent EVI-anomaly threshold and an alternative self-reported drought measure. The lower-temperature falsification test shows no statistically significant association with productivity. Positive interactions between weather shocks and land-cover change indicate weaker adverse associations with agricultural productivity at higher EVI quantiles, as shown by the corresponding marginal effects and predictive margins. These associations also vary across the productivity distribution and agroecological zones, with stronger evidence of heterogeneity in tropical-cool areas and among higher-productivity observations in tropical-warm areas. Given the observational design, the estimates represent conditional associations rather than causal effects. The findings highlight the potential relevance of vegetation conditions for climate adaptation in rainfed smallholder production systems exposed to recurrent climatic stress.