Factors influencing the profitability of fertilizer use on maize in Zambia

Fertilizer use remains very low in most of Africa despite widespread agreement that much higher use rates are required for sustained agricultural productivity growth. This study uses longitudinal farm survey data to estimate maize yield response functions in a relatively high-potential zone of Zambia to determine the profitability of fertilizer use under a range of small-farm conditions found within this zone. The theoretical framework used in this study incorporates agronomic principles of the crop growth process. We generalize the asymmetric production models and define a concept of yield scaling factors. The model distinguishes different roles of inputs and non-input factors in crop production. We estimate the effects of conventional production inputs as well as of household characteristics and government programs on maize yield. The results indicate that recommended fertilizer application rates in the two specific years were often unprofitable, given observed price conditions and the yield response to fertilizer. However, there was substantial variability in yield response to fertilizer based upon the rate of application, the timeliness of fertilizer availability, the use of animal draught power during land preparation, and whether the household incurred the death of an adult member in the past three years. These modifying factors, as well as variations in input and output prices due to proximity to roads and markets, substantially affected the profitability of fertilizer use on maize.     

The state of accounting in Armenia: A case

Armenia is a third-world country with a marginal economy and no capital markets to speak of. The government is bureaucratic. Corruption is widespread and secrecy has long been a tradition in business. Accounting is cash-based and oriented to the stewardship needs of the government. There is no tradition of accounting for management decision making, much less accounting for external, non-government users. Education for accounting has essentially been in technical bookkeeping. Armenia has been attempting to privatize its economy but in order to do so it needs to restructure its accounting system.     

Do Medium-scale Farms Improve Market Access Conditions for Zambian Smallholders?

This study is motivated by the need to understand how the rise of medium-scale farms in Africa is affecting small-scale farm households. Survey evidence over the past decade has shown a dramatic rise in the prevalence of ‘medium’ sized farms between 5 and 100 hectares, but smaller farms still constitute the vast majority of farms and rural households. Prior evidence highlights a co-evolution between the concentration of landholdings, surplus production volumes, and entry of larger traders into the market. Whether these changes tend to impact on smallholders negatively, crowding them out of markets, for example, or positively, potentially opening new marketing channels, is an empirical question. Using a multi-stage model for maize market participation in Zambia, we find that in areas where medium-scale farms are growing, even the smaller farms are becoming more likely to sell maize, more likely to sell to the private sector, more likely to sell to larger traders, and expected sales amongst sellers are higher. On balance, the growth of medium-scale farms and large-scale traders seems to have positive spillover effects on nearby smallholder marketing options.     

An in-depth examination of maize yield response to fertilizer in Central Malawi reveals low profits and too many weeds

We examine the productivity of fertilizer used on maize in Central Malawi using field-level panel data from over 1,200 observations on more than 500 fields over 4 harvest years. There are several novel aspects of this analysis compared to other on-farm fertilizer efficiency studies, including (a) precise and accurate yield measurement using crop cuts, (b) estimating the impact of timely weeding, (c) the use of data on multiple soil characteristics from a panel of soil samples, and (d) the ability to control for field-level fixed effects by tracking the same land over time. We find critical ecological and management threshold effects on fertilizer effectiveness at 0.94% soil carbon content, 57–58% sandiness, and weeding within 4 weeks of planting. Overall, we estimate lower yield response to fertilizer than reported in earlier studies: 2.6 maize kg/N kg under ideal circumstances, and statistically nil under many other conditions. We discuss the implications of our findings for farmers, policymakers, and researchers.     

Does a goodwill impairment regime better reflect the underlying economic attributes of goodwill?

IFRS adoption transformed the accounting treatment for goodwill in many countries. Instead of amortizing goodwill, firms now test for its impairment and write off impairment losses against income. Accounting standard‐setting bodies claim that an impairment regime better reflects the underlying economic value of goodwill than systematic amortization. We investigate this claim by comparing the association between goodwill accounting charges against income and firms’ economic investment opportunities in amortization and impairment regimes. We find that the association between firms’ goodwill charges against income and the firms’ investment opportunities is stronger during the IFRS regime than the AGAAP regime. This indicates that, as claimed, impairment charges better reflect the underlying economic attributes of goodwill than do amortization charges.     

Earnings and Impression Management in Financial Reports: The Case of CEO Changes

This article examines earnings management, as well as the presentational format of graphs (impression management) in the financial reports of sixty-three Australian listed public companies that changed chief executive officers (CEOs). Prior U.S. evidence generally suggests downward earnings management in the year of senior management changes and upward earnings management in the following year (Pourciau, 1993). We argue that new managers not only have incentives to manage earnings but also have similar incentives to manipulate the impressions created by graphs in financial reports. Examining earnings and impression management at the same time also provides an opportunity to distinguish between alternative explanations for any observed earnings management. In the year of CEO change, we hypothesize and find evidence of downward earnings management and some limited evidence of unfavourable impression management of the key financial variables (KFVs) graphed. As posited, we find evidence of upward earnings management and some evidence of favourable impression management in the year after a CEO change. These results are strongest for the subsample in which the CEO change was prompted by a resignation rather than a retirement.