Determinants of Smallholder Farmers' Marketing Channel Choice: Evidence from the Vietnamese Rice Sector

Cash crops such as specialty rice and other high‐value varieties produced for domestic and international markets are considered an increasing source of income for smallholder farmers in many Asian countries. The present study focuses on the factors affecting Vietnamese specialty rice farmers' choice of marketing channel and how their choice influences farm performance. The analysis has been conducted using multinomial logit and linear regression models on quantitative data collected from 280 specialty rice farmers in the Red River Delta, one of the main rice production regions in Vietnam. Results reveal that even though local collectors and wholesalers are still the most common recipients of farmers' goods in rural areas, reduction in transaction costs with regard to uncertainty influences farmers to choose modern marketing channels through collective action (via specialty rice farmer associations). This collective marketing channel helps farmers increase average prices received by US$0.028 per kg of paddy. Based on the results, manifold political implications are derived.     

A cluster analysis of commercialisation of farmers in developing rural areas of South Africa

The purpose of this article is to classify farmers in developing rural areas according to their commercial orientation and to evaluate their distinguishing characteristics. Farmers in these areas use both farm and non‐farm activities to commercialise to some degree. The aim of the commercialisation strategy is to generate income for acquiring other basic goods and services. A cluster analysis of 392 households surveyed in 1987 in the former KaNgwane identified seven groups of farming households: very low commercial households, moderately commercial households, high agricultural commercial households, livestock commercial households, non‐farm income households, non‐farm and agricultural commercial households and highly commercial households. The characteristics of four of these groups were investigated further. The current status of the commercialisation process suggests several policy directions: food security programmes should be aimed at those lacking resources, who may also be threatened by food shortages; emerging farmers with limited resources should be encouraged to diversify their income‐generating activities ‐ they should be given support (including access to land, markets, credit and management) to encourage them to prosper; and the progressive farmers require enhanced programmes to sustain their competitiveness.     

Agricultural growth multipliers for two communal areas of KwaZulu-Natal

Expenditure data were collected from 99 households in two rural areas of KwaZulu-Natal. District and wealth group expenditure analyses suggest a less-than-proportional increase in the demand for tradable farm commodities, and a more-than-proportional increase in the demand for non-tradable farm commodities following a 1 per cent increase in household expenditure. Expenditure on non-farm tradables (imported consumer durables) showed the greatest potential for demand growth, with expenditure elasticities ranging from 1,75 to 2,59. An increase of R1,00 in household income is predicted to add an additional 28 cents (multiplier of 1,28) to the local economy. The study estimates relatively weak growth linkages. However, even relatively weak growth linkages could lead to much needed new income and employment opportunities in the local farm and non-farm sectors if the constraints limiting agriculture, and hence broad-based growth in rural incomes, are alleviated. Agriculture-led growth in South Africa requires public investment in both physical and institutional infrastructure to reduce transaction costs and risks in all markets, thus encouraging greater participation by local entrepreneurs and private sector investors. In addition, the roles, functions and services offered by extension agents should be extended to promote collective marketing, facilitate land rental contracts and provide training, technical and business support for farm and non-farm entrepreneurs.     

An empirical analysis of factors affecting the growth of small-scale poultry enterprises in KwaZulu-Natal

Small-scale commercial poultry enterprises are often promoted and used by the government and non-governmental organisations in development projects to generate income and to improve food self-sufficiency and alleviate malnutrition, as poultry is an excellent source of protein. This study shows that the majority of small-scale commercial poultry producers in KwaZulu-Natal come from previously disadvantaged communities and have significantly lower enterprise growth rates than larger poultry producers. The results of a block-recursive regression analysis of data gathered from a sample of 123 poultry farmers in the province indicate that enterprise growth rate is constrained by poor access to credit, high transaction costs and unreliable local markets. Government policies should focus on reducing transaction costs by improving education and physical infrastructure, sponsoring training and mentoring services for small-scale commercial poultry producers, and helping these emerging entrepreneurs to formalise the business institutions needed to manage co-owned resources and to market products collectively.     

The relative importance of liquidity and other constraints inhibiting the growth of small‐scale farming in KwaZulu‐Natal

A logit model is used to examine the extent of liquidity constraints relative to other constraints inhibiting small‐scale farming in KwaZulu‐Natal. These other constraints include poor access to land, labour and information, and high transaction costs. Data for the analysis were sourced from two rural districts in the former KwaZulu. The results suggest that liquidity is important, while imperfect land markets, information costs and high transaction costs are also significant inhibiting factors. Investments in literacy and language skills, vocational training, and business and financial management skills may improve income opportunities for rural people and hence enhance their ability to invest, save and borrow. Better roads, telecommunications and legal institutions are also required to realise the full benefit of investment in extension and credit services.     

Institutional Adjustment and Transaction Costs: Product and Inputs Markets in the Tanzanian Coffee System

Commodity market liberalization can improve incentives for production of export crops by reducing the total costs of transforming products through space, form and time, or by reducing the costs of arranging and completing transactions. While liberalization often leads to reduced costs in output exchange, it can remove opportunities for linked input–output transactions that sometimes lowered the costs of providing finance in state-controlled markets. Assessments of liberalization that focus on output exchange alone obscure the impact of rising transaction costs in finance. This study of liberalization in the Tanzanian coffee market documents declining costs in output marketing, rising transaction costs for financing farm activities, and differential, but generally positive, net impacts on growers.     

Land fragmentation and farm productivity in China in the 1990s

The main objective of this study is to examine the effects of fragmentation on farm productivity in China and to discuss policy implications. Some earlier work has questioned the importance of the economic costs of land fragmentation in developing economies. It has been argued that policymakers should focus instead on reducing the root causes of fragmentation: inefficiencies in land, labour, credit, and food markets. Our results, using a more recent and larger dataset from a household survey in China, find that fragmentation does have an economic cost in China. Production functions are estimated for each of the major grain crops in the sample provinces. We also argue that to reduce the economic costs, land consolidation in China should be undertaken with less government intervention. More attention should be given to the establishment of markets for land (or land use rights) and improvements in rural credit and grain markets.     

Farmers and Middlemen in a Transmigration Area in Indonesia 1

Compared with long-settled lava, transmigration areas in the outer islands of Indonesia are characterised by an underdeveloped transportation and communication infrastructure that makes farmers' access to markets relatively difficult. In this case study, however, no significant difference was found in either marketing margins or middleman profits between a transmigration area in Sumatra and a long-settled area m West Java. High risk and transaction costs, associated with long-distance trade under poor infrastructure, together with delays in the issue of formal land titles to transmigrant settlers, operate as entry barriers to marketing activities. These negative factors in the transmigation area are largely compensated for by the larger marketable agricultural surplus per farm, which has the effect of reducing transportation and transaction costs.     

The role of off-farm employment in the rural energy consumption transition — A village-level analysis in Jiangxi Province, China

Energy consumption in rural areas in China is characterized by high consumption of fuelwood, straw and other biomass. Off-farm employment can play an important role in the transition towards more sustainable sources of energy by increasing rural household incomes and reducing the amount of labor available for biomass collection. The purpose of this paper is to examine the impact of off-farm employment on rural household energy consumption choices, and to disentangle the various causal relationships that play a role in this respect. To this end, a hybrid farm household/village computable general equilibrium (CGE) model is used that has been calibrated for a remote village in Northeast Jiangxi Province where fuelwood is the main source of energy. The model takes into account nonseparability of farm household production and consumption decisions as well as linkages within the village between households involved in off-farm employment and households with no members working off-farm. Contrary to previous research for a richer region in rural China, we find that fuelwood is not an inferior good. The positive impact of more food consumption on fuelwood collection more than compensates the higher leisure demand associated with higher incomes. Shifts in production activities and in prices on village factor markets caused by increased labour scarcity (the lost-labour effect of off-farm employment), on the other hand, cause a reduction in fuelwood collection and consumption. This lost-labour effect is much stronger for migration than for local off-farm employment, because the latter can more easily be combined with on-farm work and fuelwood collection. For local off-farm employment the income effect dominates the lost-labour effect, resulting in a positive overall impact of higher off-farm participation on fuelwood consumption. For migration, on the other hand, the income effect and the lost-labour effect are almost equal in size. Hence, the amount of fuelwood collected and consumed does not change much when households participate in migration. The final conclusion is therefore that increased off-farm employment opportunities do not promote the transition of rural energy use in the poorer regions of rural China.     

Efficiency or equity? The effect of an exogenous agricultural commercial shock: Evidence from Manchuria in the 1930s

The adoption of high-value cash crops (HVCs) is considered an efficient way to improve farmers' productivity and welfare, although the systematic empirical evidence is limited. By exploiting an exogenous commercial shock for soybeans and microlevel rural survey data from Manchuria of China in the 1930s, where factor markets were relatively well functioning, this study investigates the influence of HVC cultivation on farmers' agricultural performance, welfare, and inequality both theoretically and empirically. We find that (i) larger farms devote a larger proportion of land to HVCs and that (ii) farmers who cultivate a larger proportion of HVCs have higher agricultural productivity, profit, net income, and expenditure. Furthermore, the adoption of HVCs lowers profit, income, and expenditure inequality by enhancing income from wages relative to land rents, which benefits households with less land.     

Does off-farm employment contribute to agriculture-based environmental pollution? New insights from a village-level analysis in Jiangxi Province, China

This study examines the conventional wisdom that off-farm employment contributes to environmental pollution by increasing the use of agro-chemicals. In order to analyse the role of household decision making and village factor markets in more detail, we run simulations with a hybrid farm household/village computable general equilibrium model that is applied to a village in Northeast Jiangxi Province. We find that the negative lost-labour effect of off-farm employment on agricultural incomes is much stronger than the (small) positive income effect. As a result of reduced labour resources and increased leisure consumption, farm households reduce the intensity of rice cultivation as well as the production of (especially) cash crops. The shift in production activities is stronger for migration than for off-farm employment, because migrants cannot combine off-farm work with onfarm work, and because migration reduces the village market price of oxen services. The shift towards less intensive rice production means that off-farm employment (and migration in particular) reduces the levels of chemical inputs and manure used in agricultural production. The decline in fertilizer input is much larger than the decline in manure use, because manure is a nontradable commodity and is applied only once per year. We therefore conclude that migration and, to a lesser extent, local off-farm employment lead to lower incomes from agricultural production, but have benign effects on environmental quality.     

‘Undercultivation’ and intensification in the Transkei: a case study of historical changes in the use of arable land in Nompa,Shixini

The large areas of abandoned arable fields in the communal areas of the Eastern Cape and KwaZulu‐Natal are often interpreted as evidence that rural people are no longer interested in farming and largely rely on off‐farm sources of income for their survival. However, this case study of land‐use practices in one village shows that farmers in the Transkeian coastal belt have not abandoned cultivation, but have shifted from the extensive cultivation of maize in distant fields to the intensive intercropping of maize and other food crops in fenced gardens adjacent to homesteads. Studies of yields from fields and gardens indicate that this has been an effective intensification strategy adopted by rural households to maintain yields in the face of shrinking resources and increasing risks. Evidence of changing land‐use practices is presented and the reasons for these changes identified and evaluated.     

What are the Determinants of Large‐scale Farming in China?

The Chinese Government has increased its focus on expanding farm scale to promote agricultural development since 2010. A series of favorable polices has been adopted to support large‐scale farming. Using a multivariate probit model and 2015 and 2016 rural household survey data, the present paper examines the factors that influence small farmers' decision to become large‐scale farmers. The empirical regression results suggest that the decision to become a large‐scale farmer is significantly influenced by household human capital, cooperative membership, marketing channels, land‐transfer contracts and government policies. However, the influence of these factors differs with respect to becoming large‐scale grain and non‐grain farmers. These results imply that policy tools should target these factors and the appropriate group of small‐scale farmers. Generally, both central and local governments should promote large‐scale farming by enhancing rural households' human capital, improving marketing channels and providing agricultural social services, as well as encouraging returning migrant workers to engage in large‐scale farming.     

Cooperative patronage: The National Smallholder Farmers' Association of Malawi in Kasungu District

This paper estimates the determinants of farmers' decisions to join a rural producer organisation, the National Smallholder Farmers' Association of Malawi (NASFAM), in Kasungu District. Data for the study were collected in June and August 2003 using household-level questionnaires and stratified random sampling, where strata were membership status and gender. Probit analysis of 250 farmers shows that off-farm sources of income, distance of the farmer's household from Kasungu District centre, age of the farmer, tobacco farming, education, household level land holding and gender determined the decision to join NASFAM. These results suggest that farmers should be informed of the potential benefits of participating in rural development efforts, and that rural communication and information infrastructure should be improved so as to reduce the costs of information access and transactions in general, if participation in organisations such as NASFAM is to be enhanced.     

金融公共服务与农村信贷市场“使命漂移”的政策纠偏——基于门槛效应的理论与证据

农村金融市场借贷双向信息不对称导致的"使命漂移"及衍生的锚定效应,使贫困农户长期遭遇正规部门的金融排斥。基于社会公平考虑,政府可通过信息公共服务的"扶持之手"来弥补信贷市场失灵,使贫困农户得以跨越"门槛效应"而参与金融市场,促进金融普惠。使用农户问卷数据进行的实证研究结果表明：在"银行（贷）→农户（借）"层面,基于信息不对称的公共服务能降低信息门槛,使金融产品更好地服务于贫困农户;在"农户（借）→银行（贷）"层面,基于自我认知的公共信息服务,有利于诱导农户参与正规金融市场。综合效果是：公共金融服务可以降低财富（收入）水平的门槛要求、纠偏使命漂移,从而使金融产品能更好地瞄准于贫困农户而不是被误置于富裕农户。     

Socio-economic dimensions of small-scale agriculture: A principal component analysis

In order to study the different dimensions of small-scale farmers in KwaZulu-Natal, a principal component analysis was conducted on data obtained from a sample survey of 160 households. The following socio-economic components were extracted: Component 1 is an emerging commercial and mechanised household (i.e. it uses machinery), while Component 2 is a landless farm household that is more educated and earns more non-farm income, largely from contractor services. Component 3 is a non-farm female-headed household that depends on income from land renting and a non-farm job. This is a resource-poor household. Component 4 is a small intensive garden farmer household headed by a more educated female with better access to institutional services. Component 5 is a less educated, female-headed and land-poor household that rents in more land and is an intensive producer. Component 6 is a land-less household that rents in land and is also involved in contractor services. The implication is that policies aimed at assisting small-scale farmers should take into account the different dimensions of farmers, as economic policies may influence different households differently.     

Structural changes in U.S. agriculture: Implications for African American farmers

Structural changes in U.S. agriculture, influenced by technological and institutional forces, have altered the economic and social characteristics of rural America, especially that segment of rural America populated by farmers and their families. Changes in the structure of agriculture have greater implications for small scale farmers, many of whom are African American, in that strategic options for their farm-firms are constrained to: increasing their farm size, exiting farming, and obtaining off-farm employment to survive. This article presents a rationale for public support of limited resource farmers, identifies structural trends in U.S. agriculture and their impacts on African American farmers, discusses economic problems unique to these farmers, and recommends needs for specific public policies and development programs.     

Triangle of Linkages among Modernising Markets,Sprayer–traders,and Mango-farming Intensification in Indonesia

The domestic mango value chain in Indonesia is transforming rapidly. This article examines the triangle of linkages among farmers’ participation in modernising markets, the emerging use of outsourced services by sprayer–traders (STs), and farm technology intensification. The key findings are as follows. First, small farmers—not just larger farmers—participate in modernising markets. However, the participation is by the upper tier of small farmers, defined in non-land asset terms. Second, although both small and larger farmers use STs, the strongest determinant of use of an ST is the interaction between having non-farm employment (thus, demand for substitution for own labour on the farm) and having a medium-sized commercial farm (thus, demand for skilled agronomic services). Farmers in mango cluster areas also tend to use STs. Finally, use of STs and participation in modernising markets spur farming intensification through the use of modern inputs.     

Incomplete property rights, exposure to markets and the provision of environmental services in China

This paper uses data from a 2003 rural survey to examine the determinants of household provision of environmental services under China's Sloping Land Conversion Program (SLCP), the largest payments for environmental services program in the developing world. The paper examines the determinants of plot-level survival rates of program-planted trees and grasses. It finds that household rights over retired land as well as autonomy in program decision-making (which we argue on the basis of supportive evidence are plausibly exogenous to post-retirement outcomes) have important and potentially countervailing impacts on the provision of environmental services targeted by the program. Households permitted to select what to plant obtain better program outcomes, but do not make the choices that the government would like them to, while those permitted to decide what land to retire perform worse. The analysis also finds that households more vested and experienced in agriculture and with less exposure to off-farm labor markets fare better in managing their planted trees. Significant learning-by-doing effects are also evident, suggesting that greater technical support to farmers could improve outcomes and lower program costs.     

Choices between different off-farm employment sub-categories: An empirical analysis for Jiangxi Province, China

This paper analyzes the relative importance of four sub-categories of off-farm employment, and the factors driving participation of individuals in these sub-categories for three villages in Jiangxi Province. We find that migration is the most important type of off-farm employment, while agricultural wage employment is a minor activity. Migrant remittances are smaller than household incomes earned from self-employment and local non-farm employment. The results of a multinomial probit analysis explaining off-farm participation decisions show that presence of young children in a household restrains participation in migration, while the presence of elderly persons and a higher level of education stimulate migration. Local wage employment and self-employment are not affected by these factors. The gender bias in access to off-farm employment is largest for agricultural employment and local non-agricultural employment. Land scarcity stimulates participation in migration and local non-agricultural employment, while possibilities to rent land out to other farmers stimulate only migration. The paper ends with policy suggestions for promoting off-farm employment within the own region and for altering the criteria for land distribution to rural households.