Poor but allocatively efficient—evidence from the Eastern Amazon

This research empirically investigates the well‐known “poor‐but‐efficient” hypothesis formulated by Schultz (1964) assuming that small‐scale farmers in developing countries are reasonably efficient in allocating their scarce resources by responding positively to price incentives. Deviating from Schultz it is assumed here that scale effects explain a considerable proportion of small‐scale farmers' relative efficiency. The theoretical underpinnings of the scale efficiency concept are briefly reviewed before a normalized generalized Leontief (GL) profit function is modeled by using its output supply and input demand system to capture the joint production of cassava flour and maize by a sample of small‐scale farmers in the Bragantina region of the Eastern Amazon, Brazil. The discussion of theoretical consistency and functional flexibility is considered by imposing convexity on the GL profit framework. The empirical results confirm our revised hypothesis that small farmers in traditional development settings are “poor‐but‐allocatively efficient” by clearly suggesting considerable inefficiency with respect to the scale of operations.     

ON MEASURING YIELD POTENTIAL OF THE HIGH YIELDING VARIETIES TECHNOLOGY AT FARM LEVEL

Among rice scientists in developing countries there is a general belief that on-farm rice yields are far below their potential level. There is considerable controversy about the appropriate methodology to define and measure the potential yield at the farm level within the farmers' environment. Most of the methodologies are based on agronomic criteria and neglect the farmers' socio-economic environment. The aim of this paper is to define the potential yield at the farm level incorporating the economic environment farmers face. This potential yield so defined is feasible in that it could be realised by all farmers with existing technology, provided that they have access to necessary inputs. Measuring potential yield in this way is also desirable from a welfare viewpoint.     

Bias from Farmer Self‐Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm‐level yield gains from GM crop adoption. Yet most farm‐level studies in the literature do not control for farmer self‐selection, a potentially important source of bias in such estimates. We use farm‐level panel data from Indian cotton farmers to investigate the yield effect of GM insect‐resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self‐selection. A production function is estimated using a fixed‐effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross‐sectional estimates of the yield effect of Bt cotton, which do not control for self‐selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed.     

Supply response in Ethiopia: accounting for technical inefficiency

Few empirical studies of supply response using the profit function have accounted for technical inefficiency. Using farm‐level panel data from Ethiopia, this study examines the effect of incorporating technical inefficiency in estimating the supply response of peasant farmers. Two systems of output supply and input demand equations are estimated and compared: the conventional model in which technical efficiency is assumed and another in which technical inefficiency is explicitly incorporated. The model with technical inefficiency is preferred on grounds of theoretical consistency and improved estimates, although model comparison tests are not conclusive. Incorporation of inefficiency generally increases the magnitudes and the statistical significance of own price elasticities, substantially so in the case of fertilizer and fertilizer‐intensive crops, and alters the priority attached to nonprice factors. An important result is that only the specification with inefficiency reveals a significant effect of access to extension services on output. Only this specification finds that output increases with household size, which one expects as the farms in the sample are largely subsistence and producing for own consumption. Furthermore, the results demonstrate that farmers' response to incentives is considerably restricted by inefficiency, suggesting that the traditional model would overstate response by excluding the efficiency variable.     

How would global trade liberalization affect rural and regional incomes in Australia?

Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on Australia’s terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which has had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing. To what extent are Australian farmers and rural regions still adversely affected by farm and non‐farm price‐ and trade‐distortive policies abroad? This paper draws on new estimates of the current extent of those domestic and foreign distortions: first, to model their net impact on Australia’s terms of trade (using the World Bank’s Linkage model of the global economy); and second, to model the effects of that terms of trade impact on output and real incomes in rural versus urban and other regions and households within Australia as of 2004 (using Monash’s multi‐regional TERM model of the Australian economy).     

A study of economic efficiency of Iranian farmers in Ramjerd district: an application of stochastic programming

An extension of utility-efficient programming to the non-linear discrete stochastic programming method was developed and used in the analysis of the economic efficiency of a sample of farmers in Iran. The results indicate that it would be feasible to increase substantially farmers' total net revenue by increasing their economic efficiency in terms of technical and allocative efficiencies. The study further suggested that risk aversion plays an important role in farmers' behaviour. The sample farmers are risk averse and hence are likely to trade higher expected profits for lower risk. Understanding this characteristic is important for interventions intended to raise farm productivity and efficiency.     

Farm demand for quality potato seed in Indonesia

Seed is the one of the most costly components of potato production in developing countries. Since potato is a vegetatively reproduced crop, diseases such as viruses build up and yield declines as tubers are saved from one harvest for use as seed the next season. Replacing farm‐saved seed with clean seed is one means to increase yield, but information asymmetry between buyers and sellers on seed quality may restrict market supply of this input. In this article we develop a model of the seed market in which clean seed is treated as a capital good providing benefits over several seasons. To determine farm demand for clean seed, we conducted a survey of 182 potato farmers in the major potato growing areas of Indonesia to elicit their perceptions of seed quality from different sources, and derive farmers' “willingness‐to‐pay” for quality potato seed. Results indicate that the effects of information asymmetry on seed supply may be partially offset by the “reputation” of specialized seed producers. Nevertheless, marginal returns to disease‐free seed appear to significantly exceed marginal costs, indicating that improving supply of quality seed will contribute strongly to productivity growth in potato. We discuss several policy options to encourage supply and utilization of quality potato seed.     

Community‐supported agriculture in the United States: Social,ecological, and economic benefits to farming

In the United States, there is a tremendous amount of interest in community‐supported agriculture (CSA) among farmers, consumers, activists, and policymakers. Despite the attention garnered by CSA and the resurgence of local agriculture, relatively few studies have examined the livelihood opportunities for farmers within local agriculture. This paper evaluates the livelihoods of CSA farmers from the farmers' perspective in the Connecticut River Valley of Massachusetts. Results indicate that although CSA farmers earn more farm income than other farms across the United States on average, they still earn far below the median national income and generally fail to earn a living wage. Despite these findings, CSA farmers stressed the importance of the broader social, ecological, and economic benefits to farming. Although these non‐market benefits are a significant source of well‐being from the CSA farmers' perspective, CSA has largely failed to provide adequate livelihoods for farmers to date.     

Determinants of the Willingness of Belgian Farmers to Participate in Agri‐environmental Measures

This paper explores the willingness of Belgian farmers to participate in two voluntary agri‐environmental policies. Farmers' contingent behaviour is analysed on the basis of survey data. Derivations based on a conceptual micro‐economic model indicate that decision subject and decision maker characteristics are important for farmers' participation. The model is empirically tested through the specification and estimation of a probit model. Consistency is found between the theoretical framework and the empirical results indicating that both the expected effect on farm production and the farmers' environmental attitude, which is more positive among younger and better educated farmers, are significant determinants of the acceptance rate of agri‐environmental policies. Other variables which influence participation decisions are farm size and previous experience of farmers themselves or of neighbouring farmers with agri‐environmental measures.     

农业劳动力老龄化对生计效率的影响

目的 随着农业劳动力老龄化问题日益加剧，农户家庭生计资本和生计产出结构也发生了显著的变化。文章主要探讨农业劳动力老龄化对生计资源要素配置的影响及作用机理，进而为缓解农业老龄化危机、提高农户的自我发展能力提出合理化建议。方法 基于2021年陕南秦巴山区农户实地调研数据，运用DEA-Tobit二阶段模型验证二者之间的关系。结果 （1）陕南秦巴山区农户生计效率的规模效率最高，纯技术效率略低于规模效率，综合效率最低。大部分农户生计活动呈现规模收益递减状态，生计产出的增长低于生计投入的增长。（2）农业劳动力老龄化抑制了生计效率的提高，且在低收入水平家庭和户主低受教育程度家庭表现更为明显。（3）农业资金投入的增加能够缓冲农业劳动力老龄化对生计效率的负向影响。结论 因此，要正视农业劳动力老龄化现象，引导农户合理配置生计资源，提高农业资金投入使用效率，促进农户家庭自我发展能力。     

Policy reform and farmers' wheat allocation in rural China: a case study*

Market‐oriented policy reforms often have important effects on farm‐level grain production and utilisation decisions in developing countries. China's grain farmers are of particular interest because of China's importance in world grain markets and because of China's recent major agricultural policy advances and retrenchments. An empirical evaluation of market liberalisation among farmers located in two provinces in China on farm‐level wheat consumption, market sales and on‐farm storage during 1994 is presented. The results indicate that policymakers should account for such changes in farm household behaviour in designing and assessing the consequence of market liberalisation programs for agricultural sectors in developing countries.     

Adoption of climate‐smart practices and its impact on farm performance and risk exposure among smallholder farmers in Ghana

Increased climate variability during the last four decades has made the agricultural environment in many developing countries more uncertain, resulting in increasing exposure to risk when producing crops. In this study, we use recent farm‐level data from Ghana to examine the drivers of individual and joint adoption of crop choice and soil and water conservation practices, and how adoption of these practices impacts on farm performance (crop revenue) and exposure to risks (skewness of crop yield). We employ a multinomial endogenous switching regression model to account for selectivity bias due to both observable and unobservable factors. The empirical results reveal that farmers’ adoption of crop choice and soil and water conservation leads to higher crop revenues and reduced riskiness in crop production, with the largest impact on crop revenues coming from joint adoption. The findings also show that education of the household head, access to extension and weather information influence the likelihood of adopting these practices. Thus, enhancing extension services and access to climate information and irrigation can reduce gaps in adoption of soil and water conservation and crop choice, considered as climate‐smart practices that will eventually improve crop revenues and reduce farmers’ exposure to climate‐related production risks.     

Will digital technologies transform agriculture in developing countries?

Mobile phones and the internet have significantly affected practically all sectors of the economy and agriculture is no exception. Building on a recent World Bank flagship report, this article introduces a concise framework for describing the main benefits from new information and communication technologies. They promote greater inclusion in the broader economy, raise efficiency by complementing other production factors, and foster innovation by dramatically reducing transaction costs. The article reviews the recent literature on corresponding technology impacts in the rural sector in developing countries. Digital technologies overcome information problems that hinder market access for many small‐scale farmers, increase knowledge through new ways of providing extension services, and they provide novel ways for improving agricultural supply chain management. While there are many promising examples of positive impacts on rural livelihoods—or “digital dividends”—these have often not scaled up to the extent expected. The main reason is that technology can always only address some, but not all of the barriers faced by farmers in poorer countries.     

农业技术培训、经营规模对农业生产效率的影响——以水稻栽培技术为例

目的 提高农业生产效率是推进农业现代化建设的重要指标。方法 文章基于江西省512份微观调研数据测算出农户的农业生产效率,运用Tobit模型、PSM模型以及分位数回归模型分析了农业技术培训、经营规模对农业生产效率的影响。结果 研究结果表明,农业技术培训对农业生产效率的提高具有显著促进作用,且参与农业技术培训可使农户的农业生产效率提高9.32%;不同经营规模农户参与农业技术培训对农业生产效率的提升效应存在差异,规模户提升效应为28.18%,显著高于小农户的6.97%;农地经营规模对农户农业生产效率具有显著影响,并呈现出“倒U型”关系;农业技术培训、经营规模对不同分位点的农户农业生产效率均具有显著正向作用,并有递增趋势,同时对高效率组的促进作用要明显高于低效率组的农户。结论 政府应积极拓宽农业技术推广渠道,加快转变技术推广方式,同时鼓励适度规模经营,进一步提高农户农业生产效率。     

Marketing,cooperatives and price heterogeneity: evidence from the CIS dairy sector

Drawing on survey data, this article identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova, and Ukraine). We apply a multi‐level modeling approach, specifically a bootstrapped mixed‐effects linear regression model. The analysis suggests three main strategies to improve the price received by farmers for their output: consolidation, competition for output, and stable supply chain relationships. In Armenia and Ukraine selling through a marketing cooperative has a significant, positive, albeit modest, effect on farm gate milk prices. In all three countries studied, the size of dairy operations, trust, and contracting also affect positively the prices received by farmers.     

Water pricing policies,public decision making and farmers' response: implications for water policy

The problems caused by water scarcity demand important changes in the criteria and objectives of water policies. The agricultural sector in Spain consumes up to 80% of all available hydric resources and the need to increase the efficiency of current uses of water in the agricultural sector is at the core of the country's national water policy. One alternative would be to resort to water pricing policies with the aim of providing incentives to save water consumption although it would inflict a certain degree of income losses to the farmers and raise the revenue collected by the water authorities. The objective of this research is to analyze the effect caused by the application of different water pricing policies on water demand, farmers' income and the revenue collected by the government agency. To undertake this analysis a dynamic mathematical programming model has been built that simulates farmers' behavior and their response to different water pricing scenarios. Empirical application of the model has been carried out in several irrigation districts in Spain covering varied farm regions and river basins. Results show that the effects of alternative pricing policies for irrigation water are strongly dependent on regional, structural and institutional conditions and that changing policies produce distinct consequences within the same region and water district. Thus, equivalent water charges would create widespread effects on water savings, farm income and collected government revenue across regions and districts.     

Does timing matter? A real options experiment to farmers' investment and disinvestment behaviours

In this article, we analyse the (dis)investment behaviour of farmers in a within‐subject designed experiment. We ascertain whether, and to what extent, the real options approach (ROA) and the classical investment theory can predict farmers' (dis)investment behaviour. We consider a problem of optimal stopping, stylising an option to (dis)invest in agricultural technology. Our results show that both theories do not explain exactly the observed (dis)investment behaviour. However, some evidence was found that the ROA predicted the decision behaviour of farmers better than the classical investment theory. Moreover, we found that farmers learn from repeated investment decisions and consider the value of waiting over time. Socio‐demographic and farm‐specific variables also affect the (dis)investment behaviour of farmers.     

Africa's changing farm size distribution patterns: the rise of medium‐scale farms

This study assesses changes over the past decade in the farm size distributions of Ghana, Kenya, Tanzania, and Zambia, drawing on two or more waves of nationally representative population‐based and/or area‐based surveys. Analysis indicates that much of Sub‐Saharan Africa is experiencing major changes in farm land ownership patterns. Among all farms below 100 hectares in size, the share of land on small‐scale holdings under five hectares has declined except in Kenya. Medium‐scale farms (defined here as farm holdings between 5 and 100 hectares) account for a rising share of total farmland, especially in the 10–100 hectare range where the number of these farms is growing especially rapidly. Medium‐scale farms control roughly 20% of total farmland in Kenya, 32% in Ghana, 39% in Tanzania, and over 50% in Zambia. The numbers of such farms are also growing very rapidly, except in Kenya. We also conducted detailed life history surveys of medium‐scale farmers in each of these four countries and found that the rapid rise of medium‐scale holdings in most cases reflects increased interest in land by urban‐based professionals or influential rural people. About half of these farmers obtained their land later in life, financed by nonfarm income. The rise of medium‐scale farms is affecting the region in diverse ways that are difficult to generalize. Many such farms are a source of dynamism, technical change, and commercialization of African agriculture. However, medium‐scale land acquisitions may exacerbate land scarcity in rural areas and constrain the rate of growth in the number of small‐scale farm holdings. Medium‐scale farmers tend to dominate farm lobby groups and influence agricultural policies and public expenditures to agriculture in their favor. Nationally representative Demographic and Health Survey (DHS) data from six countries (Ghana, Kenya, Malawi, Rwanda, Tanzania, and Zambia) show that urban households own 5–35% of total agricultural land and that this share is rising in all countries where DHS surveys were repeated. This suggests a new and hitherto unrecognized channel by which medium‐scale farmers may be altering the strength and location of agricultural growth and employment multipliers between rural and urban areas. Given current trends, medium‐scale farms are likely to soon become the dominant scale of farming in many African countries.     

Risk preference and optimal enterprise combinations in Kahuro division of Murang'a district, Kenya

Financing smallholder farming has been one of the major concerns of Kenya's agricultural development efforts. Many credit programs have evolved over the years but with dismal performance. In a study that sought to find the best way to finance smallholder agriculture, it became necessary to analyze and document, in the first place, the farmers' preferred enterprise patterns. Any financial innovations would hence address the preferred patterns. Of particular interest was the effect of risk preference on such patterns, which had been ignored in many previous farm management studies. Murang'a district was chosen as a typical smallholder district. Sample farmers, obtained through cluster sampling, were visited and structured questionnaires administered to cover farm events and physical resources of short rains 1995 to long rains 1996. This formed a basis for formulating the farm patterns. A quadratic programming model was used to analyze observed farm plans. The model incorporates farmers' risk preferences, revenue fluctuations, and resource and subsistence restrictions. The results showed that: (1) changes in risk preference do affect the optimal crop combinations; (2) the typical cropping pattern is rational as the farmer meets both food and cash under modest variability of income; (3) insisting on producing most subsistence food requirements by the farmers reduces efficiency and limits the feasible plans.     

Technical,Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non‐parametric Approach

Applying programming techniques to detailed data for 406 rice farms in 21 villages, for 1997, produces inefficiency measures, which differ substantially from the results of simple yield and unit cost measures. For the Boro (dry) season, mean technical efficiency was 69.4 per cent, allocative efficiency was 81.3 per cent, cost efficiency was 56.2 per cent and scale efficiency 94.9 per cent. The Aman (wet) season results are similar, but a few points lower. Allocative inefficiency is due to overuse of labour, suggesting population pressure, and of fertiliser, where recommended rates may warrant revision. Second‐stage regressions show that large families are more inefficient, whereas farmers with better access to input markets, and those who do less off‐farm work, tend to be more efficient. The information on the sources of inter‐farm performance differentials could be used by the extension agents to help inefficient farmers. There is little excuse for such sub‐optimal use of survey data, which are often collected at substantial costs.