Modeling the Effects of Input Market Reforms on Fertiliser Demand and Maize Production: A Case Study from Kenya

Kenya is one of the few countries in Sub‐Saharan Africa to experience an impressive rise in fertiliser use following a series of input market reforms in the early 1990s. Two major consequences of these reforms were declining fertiliser marketing margins and distances between farmers and fertiliser dealers. We quantify the effects of these changes on commercial fertiliser use and maize production in Kenya by estimating fertiliser demand and maize supply response functions using nationwide household survey data. Our results indicate that between 1997 and 2010, the estimated 27% reduction in real fertiliser prices that can be attributed to falling marketing margins associated with market reforms led to a 36% increase in nitrogen use on maize fields and a 9% increase in maize production resulting from both yield and acreage effects. On the other hand, decreasing distances to fertiliser retailers from the perspective of a given household did not appear to raise fertiliser use or maize supply, although a comparison across households using average distances over the panel indicate that those closer to retailers do apply more fertiliser on their maize fields.     

Off‐farm Employment and Input Intensification among Smallholder Maize Farmers in Kenya

We derive input demand functions for fertiliser and hybrid seed, testing for the combined and separate effects of income from non‐farm sources and agricultural wage labour among smallholder maize farmers in Kenya. More income from off‐farm sources, and specifically non‐farm sources, competes with maize intensification, particularly in more productive areas where use rates are higher. In less productive areas, where households rely more on off‐farm income and input use in maize is extremely low, agricultural wage labour reduces the likelihood that fertiliser is applied, but when used, has a positive effect on quantities purchased of both seed and fertiliser.     

Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi

Most studies of input subsidy programmes confine their analyses to measuring programme effects over a one‐year period. This article estimates the potential longer‐run or enduring effects of fertiliser subsidy programmes on smallholder farm households' demand for commercial fertiliser and maize production over time. We use four waves of panel data on 462 farm households in Malawi for whom fertiliser use can be tracked for eight consecutive seasons between 2003/2004 and 2010/2011. Panel estimation methods are used to control for potential endogeneity of subsidised fertiliser acquisition. Results indicate that farmers acquiring subsidised fertiliser in three consecutive prior years are found to purchase slightly more commercial fertiliser in the next year. This suggests a small amount of crowding in of commercial fertiliser from the receipt of subsidised fertiliser in prior years. In addition, acquiring subsidised fertiliser in a given year has a modest positive impact on increasing maize output in that same year. However, acquiring subsidised fertiliser in multiple prior years generates no statistically significant effect on maize output in the current year. These findings indicate that potential enduring effects of the Malawi fertiliser subsidy programme on maize production are limited. Additional interventions that increase soil fertility can make using inorganic fertiliser more profitable and sustainable for smallholders in sub‐Saharan Africa and thereby increase the cost‐effectiveness of input subsidy programmes.     

Measuring Farm and Market Level Economic Impacts of Improved Maize Production Technologies in Ethiopia: Evidence from Panel Data

While it is often recognised that agricultural technology adoption decisions are intertwined and best characterised by multivariate models, typical approaches to examining adoption and impacts of agricultural technology have focused on single technology adoption choice and ignored interdependence among technologies. We examine farm‐ and market‐level impacts of multiple technology adoption choices using comprehensive household survey data collected in 2010/11 and 2012/13 in Ethiopia. Economic surplus analysis combined with panel data switching endogenous regression models are used to compute the supply shift parameter (K‐shift parameter), while at the same time controlling for the endogeneity inherent in agricultural technology adoption among farmers. We find that our improved technology set choices have significant impacts on farm‐level maize yield and maize production costs, where the greatest effect appears to be generated when various technologies are combined. The change in maize yield and production costs results in an average 26.4% cost reduction per kilogram of maize output (the K‐shift parameter). This increases the producer and consumer surpluses by US$ 140 and US$ 105 million per annum, respectively. These changes in economic surplus help to reduce the number of poor people by an estimated 788 thousand per year. We conclude that deliberate extension efforts and other policies that encourage integration of technologies are important for maize technologies to yield their full potential at both farm and market levels.     

Resource saving and productivity enhancing impacts of crop management innovation packages in Ethiopia

Crop management innovations are often not discrete fixed stand‐alone options—and their adoption may imply various combinations and adaptations. This potentially confounds their impact assessment. This article assesses the resource saving and productivity enhancing impacts of a crop management package revolving around minimum tillage in maize‐based farming systems in northwest Ethiopia. An endogenous switching regression model was applied to plot‐ and household‐level survey data collected from 290 rural households operating 590 maize plots during the 2012 production year. Controlling for variations in plot and household characteristics, the average effect of minimum tillage package (minimum tillage package) on maize productivity is 0.44 t/ha. Compared to conventional practice (CP), adoption of the MTP decreased the average male and female labor use in maize production by 14.4 and 8.2 person‐days per ha, respectively. Similarly, MTP adoption decreased draft power use for land preparation by 13.2 pair of oxen‐days per ha. Compared to CP, in general, there is a considerable short‐run maize productivity gain and reduction in labor and draft power use under MTP.     

Information Barriers to Adoption of Agricultural Technologies: Willingness to Pay for Certified Seed of an Open Pollinated Maize Variety in Northern Uganda

We examine smallholder farmers’ willingness to pay for agricultural technology and whether information is a constraint to adoption of certified maize seed in Northern Uganda. The uptake of improved maize varieties by smallholder farmers in Uganda remains persistently low, despite the higher yield potential compared to traditional varieties. A recently growing body of literature identifies information constraints as a potential barrier to adoption of agricultural technologies. We used incentive compatible Becker‐DeGroot‐Marschak auctions to elicit willingness to pay for quality assured improved maize seed by 1,009 smallholder farmers, and conducted a randomised evaluation to test the effect of an information intervention on farmers’ knowledge of seed certification. Our results show that the randomised information treatment enhanced farmers’ knowledge of certified seed. However, using the information treatment as an instrumental variable for knowledge, we find no evidence of a causal effect of knowledge on willingness to pay, suggesting that even though farmers are information constrained, this constraint does not affect adoption of certified seed directly. Nevertheless, only 14% of sampled farmers were willing to pay the market price, which corresponds closely with actual observed demand for certified seed in the previous season. This suggests that there are other barriers to adoption than information and awareness.     

Welfare effects of maize technologies in marginal and high potential regions of Kenya

This paper describes the findings of a study that used a multi‐market model to assess the potential impact of improved maize technologies on the welfare of various types of rural and urban households in Kenya. The modelling results indicate that technologies developed for high potential regions are likely to have more profound aggregate impacts on maize production and lead to greater reductions in import demand (if prices are controlled) or maize prices (if maize prices are flexible). Technology adoption in high potential regions is likely to have substantially greater positive impacts on aggregate real incomes, but inferior income distributional outcomes compared to technology adoption in marginal regions.     

Duration Analysis of Technological Adoption in Ethiopian Agriculture

Duration analysis has been used to examine the impact of time‐varying and time‐invariant variables on the speed of adoption of fertiliser and herbicide by smallholder farmers in East and West Shewa in the central highlands of Ethiopia in the 25 years preceding 1996. The estimated models suggest that economic incentives were the most important determinants of the time farmers waited before adopting new technologies; traction power in the form of oxen and infrastructural factors (in particular proximity to markets) also appear to have been important influences, but less so than prices. Other agricultural inputs (area of farmland, labour, credit), extension services and farmers' personal characteristics (education, gender, age) appear to have had little, if any, effect on adoption behaviour. There is also evidence that the speed of adoption of herbicide, on both tef and wheat, was slower than that of fertiliser.     

Integration of conservation agriculture in smallholder farming systems of southern Africa: identification of key entry points

A component-omission experiment based on the principle of conservation agriculture (CA) was established on smallholder farms for three seasons in Murehwa and Hwedza districts, Zimbabwe; Barue district in Mozambique; Balaka district and Chitedze Research Station in Malawi, and Monze district in Zambia to identify strategies for improving crop productivity and livelihoods for smallholder farmers. The objective of the experiment was to evaluate the effect of tillage, residue retention, fertiliser application and weed control on maize yield. In addition, the study analysed possible combinations of these factors that could provide a sustainable entry point for intensification through CA. Results showed that fertilisation had the strongest effect on crop yield in both tillage systems; adequate fertilisation is therefore key to success in CA. Retention of crop harvest residues increased yield in no-tillage systems; no-tillage without residues depressed yield by 50% when compared with yields of conventional tillage. A step-wise integration of CA into the smallholder farming systems is proposed as a possible strategy to avoid new constraints on smallholder farms. If resources are limiting, farmers may apply all principles on small areas to overcome the initial demand in resources (labour, fertiliser and residues), and once productivity is raised, they can expand.     

Adoption and Impacts of Sustainable Agricultural Practices on Maize Yields and Incomes: Evidence from Rural Zambia

This paper uses a multinomial endogenous treatment effects model and data from a sample of over 800 households and 3,000 plots to assess the determinants and impacts of adoption of sustainable agricultural practices (SAPs) on maize yields and household incomes in rural Zambia. Results show that adoption decisions are driven by household and plot level characteristics and that the adoption of a combination of SAPs raises both maize yields and incomes of smallholder farmers. Adoption of improved maize alone has greater impacts on maize yields, but given the high cost of inorganic fertiliser that limits the profitability of adoption of improved maize, greater household incomes are associated rather with a package involving SAPs such as maize–legume rotation and residue retention.     

Some implications of generalised C.E.S. production functions for normative effects of output prices and shifts in supply schedules

Abstract

This paper studies the demand for hired casual labour under production risk for a sample of Indian cultivators. A simple static household model under production risk is constructed to yield the demand for hired labour function. A detailed discussion of the various technological and non‐technological regressors is then presented. Empirical results reveal that the risk variables do not have a significant influence on hiring‐in behaviour. This result is important since the theoretical literature shows that a marginal increase in risk would lead to a decline in the demand for labour. Further, caste factors do not appear to influence hiring‐in, contrary to evidence for eastern India. Land‐augmenting technological factors appear to be the most important in explaining rightward shifts in the demand curve over time.     

A Case of Mistaken Identity? Measuring Rates of Improved Seed Adoption in Tanzania Using DNA Fingerprinting

Studies of improved seed adoption in developing countries are almost always based on household surveys and are premised on the assumption that farmers can accurately self-report their use of improved seed varieties. However, recent studies suggest that farmers’ reports of seed varieties planted, or even whether the seed is local or improved, are sometimes inconsistent with the DNA fingerprinting results of those crops. We use household survey data from Tanzania to test the alignment between farmer-reported and DNA-identified maize seed types planted. In the sample, 70% of maize seed observations are correctly reported as local or improved, while 16% are type I errors (falsely reported as improved) and 14% are type II errors (falsely reported as local). Type I errors are more likely to have been sourced from other farmers, rather than formal channels. An analysis of input use, including seed, fertiliser, and labour allocations, reveals that farmers tend to treat improved maize differently, depending on whether they correctly perceive it as improved. This suggests that errors in farmers’ seed type awareness may translate into suboptimal management practices. The average yield of seed that is correctly identified as improved is almost 700 kg per hectare greater than that of type I errors. This indicates that investments in farmers’ access to information, seed labelling, and seed system oversight are needed to complement investments in seed variety development.     

Adoption of improved maize varieties in the hills of Nepal

Maize (Zea mays L.) is the most important cereal crop in the hills of Nepal, where the grain is used for human consumption and the stover for animal fodder. Maize farms are small, and population pressure necessitates the intensification of existing farming systems. Maize research directed at developing technologies for maize production began in Nepal in 1965. In 2000, a survey was carried out in two districts to determine the current level of adoption of improved maize production practices. In each of these districts, remote and accessible village development committees (VDCs) were surveyed. Questionnaires were administered to 54 randomly selected households in each VDC. A Tobit analysis was used to determine socio‐economic, physical and technology factors that influence the use of improved varieties by farmers. All households use composted farmyard manure, and in the more accessible areas, urea as part of their soil fertility management strategy. Use of improved varieties was less than 60% for all VDCs and only 15% in the most remote VDC. In three of the four VDCs, adoption of improved varieties primarily occurred during the past 5 years. Based on a Tobit analysis, Khet land area, ethnic group, years of fertiliser use, off‐farm income, and contact with extension significantly and positively affected adoption of improved varieties. Farmers in VDCs in central Nepal reported lack of seed to be the major constraint to the adoption of improved varieties, while lack of knowledge of new varieties was the major constraint for farmers in the western VDCs. The results from this survey suggest that the strategy for improving the adoption of new varieties will differ depending on infrastructure and the socio‐economic conditions of the farmers in a given area.     

The role of education on the adoption of chemical fertiliser under different socioeconomic environments in Ethiopia

Studies on input adoption consider education as one of the most important factors that affect adoption decisions. However, very little is known about the spill‐over effect of intra‐household education on the adoption process and about the impact of education on adoption decisions under different socioeconomic conditions. We investigate these two issues using a discrete choice model. The results indicate that the decision making process is a decentralised one in which educated adult members of the household actively participate in the decision making process. This casts doubt on the traditional assumption that the household head is the sole decision maker. The results reveal that there is a substantial and statistically significant intra‐household spill‐over effect of education on the adoption decision of households. The results of the study also show that the coefficient of the education and the environment interaction variable is negative and statistically significant. This demonstrates that education and socioeconomic environments could be substitutes in modern environments and complementary in traditional ones. This implies that the expansion of education in traditional areas may be more attractive than in modern areas since education is usually the only means to enhance the ability of farmers to acquire, synthesise and respond to innovations such as chemical fertiliser.     

A New System of Labour Management in African Large‐Scale Agriculture?

This paper applies a convention theory (CT) approach to the analysis of labour management systems in African large‐scale farming. The reconstruction of previous analyses of high‐value crop production on large‐scale farms in Africa in terms of CT suggests that, since 1980–95, labour management has moved from a ‘domestic’ to a ‘market’ system. However, data collected by the authors from a sample of 11 large‐scale rose farms in Kenya in 2011 (covering around 20% of national output) points to the adoption of systems that, in CT terms, combine ‘industrial’ and ‘civic’ elements. The paper concludes by suggesting a series of hypotheses that might explain this trend.     

Productivity impact of drought tolerant maize varieties under rainfall stress in Malawi: A continuous treatment approach

Drought tolerant (DT) maize varieties have received massive support in sub‐Saharan Africa because of their potential to protect smallholder farmers against drought‐related maize yield losses. Using four waves of household farm panel data from six districts in Malawi, we examine the impact heterogeneity of this technology on maize productivity using a continuous treatment approach. We find strong evidence of positive correlation between maize yield and adoption of DT maize varieties. On average, an increase by one hectare in the area allocated to DT varieties increases maize yield by 547 Kg/ha representing a 44% increase from the average maize yield of 1,254 Kg/ha for our sample. Our findings give evidence that DT maize technology has potential to protect smallholder farmers against drought‐related production losses. Policies that promote increased allocation of maize area to DT maize hold potential to enhance food security. Smallholder farmers especially in drought‐prone areas should be encouraged to allocate at least one‐third of the maize plot to DT varieties while breeders continue with the efforts of breeding a DT variety that is not only drought tolerant but also adapted to all weather conditions. More importantly, the government should ensure provision of timely ex ante weather information to guide farmers on decision‐making with respect to maize varietal choices.     

Estimating shadow price for symbiotic nitrogen and technical efficiency for legume‐based conservation agriculture in Malawi

Determining the value of legumes as soil fertility amendments can be challenging, yet this information is required to guide public policy and to incentivise prescribed land‐management practices such as conservation agriculture. We use a directional input distance function (DIDF) to estimate shadow prices for symbiotic nitrogen and the technical efficiency for mixed maize‐legume production systems in Malawi. The shadow prices reflect the trade‐off between fertiliser nitrogen and symbiotic nitrogen required to achieve a given quantity of output. Our results reveal considerable technical inefficiency in the production system. The estimated shadow prices vary across farms and are, on average, higher than the reference price for commercial nitrogen. The results suggest that it would be beneficial to redesign the current price‐support programs that subsidise chemical fertilisers and indirectly crowd‐out organic soil amendments such as legumes.     

Accounting for the Gender Technology Gap Amongst Smallholder Rice Farmers in Northern Ghana

Narrowing the gender technology gap in agricultural production has become a critical policy issue in sub‐Saharan Africa. A better understanding of the gender technology gap is essential for policy formulation and programme planning to ensure equity in resource allocation, and household‐level food security in low and middle income countries, such as Ghana. We employ a metafrontier approach to analyse the differences in the efficiency of male and female farmers, recognising the endogeneity of some of the variables in the inefficiency effects model, in particular the credit constraints of the rice farmers under study. Our findings show that while the rice farms themselves are very similar, average yields for male managed farms tend to be significantly higher than female managed farms reflecting higher seeding and fertiliser application rates on male managed farms. However, there is no significant difference between the genders in either land used for rice or total output per farm household. We find some evidence that relative to the metafrontier, male managed farms are less efficient than female managed farms. The results further show gender technology gap amongst the smallholder rice farmers with females’ technology gap ratio being significantly greater than that of males, with females operating on a production frontier closer to the metafrontier. Policies that provide females more access to productive resources and other agricultural services could assist in the generation of relatively higher output.     

Factors explaining the diffusion of hybrid maize in Latin America and the Caribbean region

If future demand for maize in Latin America and the Caribbean region (LAC) is to be met from local sources, domestic production must continue to increase. Because further expansion in the area planted to maize is precluded by the limited availability of arable land, future increases in production will have to rely heavily on the spread of productivity‐enhancing hybrid technology. Until now, the diffusion of hybrid maize in LAC has been quite variable. Using data from 18 countries, we investigate factors affecting the hybrid maize diffusion rate. Our findings validate conventional profitability‐based explanations of producer adoption behavior, but they also confirm the importance of supply‐side factors, thereby providing empirical support for the life cycle theory of seed industry development. We conclude that if policy makers in LAC are to accelerate the diffusion of hybrid maize, they will have to ensure an environment in which it is not only profitable for producers to adopt improved germplasm, but also profitable for the seed industry to produce and sell high‐quality seed.     

THE DEMAND FOR FERTILISER IN THE UNITED KINGDOM

Among the policy alternatives for limiting fertiliser use, a tax on chemical fertiliser is administratively the easiest option. Its efficacy depends partly on the responsiveness of fertiliser demand to price changes. This paper reviews the empirical methodologies available for estimating the price elasticity of a derived demand and presents the results of several econometric models. The econometric analysis shows that the response of UK fertiliser demand to own-price changes is greater than has been assumed on the basis of programming studies of arable farms. This result establishes a necessary but not a sufficient condition for an effective fertiliser tax. The full impact of a fertiliser tax over the longer term depends on the extent to which technical change is driven by trends in relative prices.