Horticulture exports, agro-industrialization, and farm–nonfarm linkages with the smallholder farm sector: evidence from Senegal

In this article we address the question of farm–nonfarm linkages at the household level in Senegal. We examine whether increasing off-farm employment opportunities for rural households—resulting from increased horticulture exports and associated agro-industrialization—has benefitted the smallholder farm sector through investment linkages. We use data from a household survey in the main horticulture export region in Senegal. We find that access to unskilled employment in the export agro-industry has contributed to the alleviation of farmers' liquidity constraints, resulting in increased smallholder agricultural production.     

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.     

The impact of water conservation and intensification technologies: empirical evidence for rice farmers in Ghana

This study employs the propensity score matching model to examine the impact of the adoption of water conservation and intensification technologies on farm output and income among small-scale lowland rice farmers in the Northern Region of Ghana. The matching was conducted based on the Mahalanobis distance combined with the propensity score. Balancing tests by checking the mean standardized absolute bias in the matched sample were conducted as well as a sensitivity analysis was conducted to check for hidden bias due to unobservable selection. The empirical results show a positive and significant impact of the adoption of bunds technology on input demand as well as a positive but insignificant impact on output supply and net returns. Adopters of the dibbling technology were found to have higher output supply, whereas no statistically significant difference was found between the incomes of adopters and nonadopters of dibbling seed method. The results, however, reveal a positive and significant effect on output and net returns when the dibbling method is combined with intensified weeding. The estimates were found to be relatively insensitive to hidden bias.     

Agricultural extension and imperfect supervision in contract farming: evidence from Madagascar

This article tests whether agricultural extension and imperfect supervision—conflated here into the number of visits by a technical assistant—increase productivity in a sample of contract farming arrangements between a processing firm and small agricultural producers in Madagascar. Production functions are estimated which treat the number of visits by a technical assistant as an input and which exploit the variation in the number of visits between the contracted crops grown on a given plot by a specific grower, thereby accounting for district‐, grower‐, and plot‐level unobserved heterogeneity. Results indicate that the elasticity of yield with respect to the number of visits lies between 1.3 and 1.7.     

Potential and limitation of an organic fertilizer‐based development strategy: evidence from Tamil Nadu,India, from 1993 to 2003

This article explores the potential and limitations for using farmyard manure (FYM) to improve paddy and upland cereals productivity under various soil conditions in Tamil Nadu, India. Using household‐level fixed effects, estimated yield functions from 1993 to 2003 confirm that FYM application directly increases crop productivity in upland cereals, but not in paddy rice. Complementary effects through an increase in the marginal product of inorganic fertilizer is observed for both paddy and upland cereals, especially where inherent soil fertility is low. Farmers’ FYM use is responsive to changes in the price of FYM, but transport costs limit price transmission across space. Dairy sector development thus improves crop productivity, but only in the small area around the animals which limits the spread of FYM‐based development strategy.     

Diffusion and spillover of new technology: a heterogeneous-agent model for cassava in West Africa

Understanding what determines the geographic spread of innovations can help guide the funding and implementation of research and extension programs. Our approach uses household survey data as model parameters, to simulate behavior across the entire surveyed population and avoid the aggregation bias associated with representative‐farm models. Such a “heterogeneous agent” approach allows us to infer the distribution of a technology's impacts across one set of households, and predict the potential for spreading to another set that shares similar characteristics with respect to natural resource endowments and farming systems. We apply the technique to new cassava varieties in West Africa, finding a strongly poverty‐alleviating impact, with substantial spillover potential from Nigeria to neighboring countries.     

China's booming livestock industry: household income, specialization, and exit

China's production of livestock products has generally kept pace with her rapidly increasing demand. Over-supply and market corrections for various livestock products took place over the latter part of the 1990s and large numbers of householders exited this type of production. Using household survey data, we estimate the relationship between a household's specialization in livestock production and household net income in 1995, and use a logit model to explore some predictors of household exit from livestock production over the following decade of market instability. We conclude that specialist livestock households with access to necessary skills, technologies, and markets increase their incomes from further livestock specialization in the base year, whereas those to whom livestock production is relatively unimportant can increase household incomes by diverting their resources away from animal husbandry. It was specialist rather than diversified livestock households that tended to bear the brunt of the adjustment to unfavorable price movements over the decade post-1995. Policy concerns include the exit of larger-scale specialized producers who tended to earn relatively high household incomes in 1995, barriers to the effective formation and operation of horizontal and vertical integration options to help mitigate market instability, the further development of insurance programs and markets for livestock producers, and development assistance to livestock households that for various reasons cannot increase scale and specialization.     

Agritourism and off‐farm work: survival strategies for small farms

This study considers agritourism and off‐farm work as income diversification choices simultaneously and analyzes factors influencing such choices. Further, the study assesses the impact of agritourism, off‐farm work, and both on gross cash farm income and total farm household income. We utilized large set of nationwide farm survey data and selectivity‐based multinomial choice model. An important finding of our study is that small farms have higher household income if they choose both income diversification strategies rather than a single strategy. Results suggest that education, age of the operator, financial condition, and location of the farm are important factors driving income diversification alternatives. Finally, our study indicates that accounting for selectivity is essential to ensure unbiased and consistent estimates.     

Gender and agriculture in sub‐Saharan Africa: introduction to the special issue

This special issue contributes to the literature on gender differences in sub‐Saharan African agriculture primarily by using new and innovative micro‐data. The first six articles have a strong focus on understanding the extent and drivers of gender differences in land productivity and use data from nationally representative household surveys that are implemented under the Living Standards Measurement Study‐Integrated Surveys on Agriculture (LSMS‐ISA) initiative. The LSMS‐ISA data are multi‐topic, with geo‐referenced household and plot locations, and information on production and identity of managers and owners at the plot level. The last two articles in the volume rely on in‐depth quantitative and qualitative case study data, which, in combination with the nationally representative data, allow for greater insights into the extent and correlates of gender differences in sub‐Saharan African agriculture. While there does seem to be persistent evidence of gender gaps, the studies find the sources of these gaps to vary within and across countries. This makes designing policies to address gender gaps more challenging, yet of crucial importance. What is clear is that the failure to directly and explicitly address the underlying causes of the disparities is likely to end up exacerbating the observed gender gaps.     

The impact of coffee certification on small‐scale producers’ livelihoods: a case study from the Jimma Zone,Ethiopia

What is the impact of product certification on small‐scale farmers’ livelihoods? To what extent does the participation of Ethiopian small‐scale coffee farmers in certified local cooperative structures improve their socioeconomic situation? To answer these questions, this article employs household data of 249 coffee farmers from six different cooperatives collected in the Jimma zone of Southwestern Ethiopia in 2009. Findings show that the certification of coffee cooperatives has in total a low impact on small‐scale coffee producers’ livelihoods mainly due to (1) low productivity, (2) insignificant price premium, and (3) poor access to credit and information from the cooperative. Differences in production and organizational capacities between the local cooperatives are mirrored in the extent of the certification benefits for the smallholders. “Good” cooperatives have reaped the benefits of certification, whereas “bad” ones did not fare well. In this regard the “cooperative effect” overlies the “certification effect.”     

Land use and income diversification: comparing traditional and colonist populations in the Brazilian Amazon

This article compares and analyzes land use and income diversification among two distinct groups of farmers in the Brazilian Amazon: recent colonists in Ouro Preto do Oeste, Rondônia, and traditional long‐term residents along the Tapajós River, Pará. We investigate the hypothesis that farmers who diversify their cash income sources clear less forest on an annual basis, and we compare these livelihood choices across colonist and traditional populations. In particular, we develop a conceptual model based on the household production framework and use econometric models to identify determinants of diversification and forest clearing. We find that diversification of agricultural cash crops is negatively correlated with forest clearing by colonists, providing limited evidence for the hypothesis. Other significant covariates of diversification and forest clearing include cash income levels, stage in family life cycle, cattle ownership, and chemical inputs. Differences in these variables, and differences in household response to these variables, explain variation in diversification and forest clearing across the two populations.     

Human health and pesticide use in Sub‐Saharan Africa

While pesticides–such as insecticides, fungicides, and herbicides–are often promoted as inputs that increase agricultural productivity by limiting a range of pre‐harvest losses, their use may have negative human health and labor productivity implications. We explore the relationship between pesticide use and the value of crop output at the plot level and a range of human health outcomes at the household level using large‐scale, nationally representative panel survey data from four Sub‐Saharan African countries where more than 10% of main season cultivators use pesticides. We find that pesticide use is strongly correlated with increased value of harvest, but is also correlated with higher costs associated with human illness, including increased health expenditures and time lost from work due to sickness in the recent past. We take these results as suggestive that the findings of more targeted studies are indeed generalizable beyond their original, purposively chosen samples.     

Analyzing technology adoption using microstudies: limitations, challenges, and opportunities for improvement

Policy makers and interest groups have many questions about the use of improved technologies in developing country agriculture. These include the roles of policies, institutions, and infrastructure in the adoption of improved technologies and their impact on productivity and welfare. Most micro‐level adoption studies, however, cannot address these important policy issues. Drawing on an extensive review of the literature on the adoption of agricultural technologies, this article suggests alternative approaches for designing technology adoption studies to make them useful for policy makers. It explores the generic limitations of cross‐sectional adoption studies carried out in small numbers of communities and discusses some problems faced in conducting such studies. Recommendations include the use of sampling approaches that allow data from microstudies to be generalized to higher levels of aggregation, adherence to clearly defined terms that are standardized across studies, and careful examination of the assumptions that often underlie such studies.     

Contract farming: opportunity cost and trade‐offs

An important literature has established that participation in contract farming leads to higher incomes and has a number of other beneficial effects on the welfare of participating households. Yet no one has looked at the opportunity cost of and the various trade‐offs involved in participating in contract farming. I look at the relationship between participation in contract farming and income from (i) livestock, (ii) labor markets, (iii) nonfarm businesses, and (iv) agricultural sources other than livestock and contract farming and (v) unearned income. Using data from Madagascar, I find that participation in contract farming is associated with a 79% decrease in how much income per capita the average household derives from labor markets and a 47% decrease in how much income per capita it derives from nonfarm businesses, but also with a 51% increase in how much income per capita the average household derives from agricultural sources other than livestock and contract farming, possibly due to technological spillovers. Thus, even though contract farming has been shown to improve welfare in multiple ways in this context, it looks as though those gains come at the cost of an “agricultural involution” on the part of participating households, who seem to turn away from non‐agricultural activities. This has important implications for structural transformation narratives.     

Capital market imperfections in economic transition: empirical evidence from Ukrainian agriculture

This article investigates the link between financing and investment in Ukrainian agriculture during economic transition. The main contribution of the study is to provide empirical evidence for the coexistence of financial constraints and soft budget constraints (SBCs). This is of particular importance because credit constraints and SBCs have completely different economic effects. The lack of differentiation between these forms of capital market imperfections yields overlapping effects of financing on investment and may therefore cause a misinterpretation of econometric results. Our empirical analyses are based on an econometric estimation of the Euler investment equations for 529 large farms from three Ukrainian regions between 2001 and 2005. The results confirm that financial variables significantly influence farms' investment, providing empirical evidence of an imperfect capital market in Ukrainian agriculture. It turns out that credit constraints in the Ukrainian agricultural sector are more important than SBCs. We show that the estimated level of financial constraints for profitable farms with access to loans is higher if both types of capital market imperfections are appropriately distinguished.     

Cash crop liberalization and poverty alleviation in Africa: evidence from Malawi

This article uses the case of burley tobacco liberalization in Malawi to investigate the efficacy of cash crop liberalization as an instrument for poverty alleviation in sub‐Saharan Africa. The principal justification for cash crop liberalization is that markets allow farm households to increase their incomes by producing that which provides the highest return to their productive resources and use the cash to buy consumption goods. Using a latent welfare model, we find that households that selected to grow cash crops had higher incomes than those that did not grow cash crops. However, we also find that due to the lumpiness and seasonality of cash crop incomes, higher household incomes, while increasing food purchases did not significantly affect per capita food intake. Irrespective of participation in cash crops, for much of the cropping season rural households seem to rely more on nonfarm income for expenditure and consumption smoothing.     

Adoption and welfare impacts of multiple agricultural technologies: evidence from eastern Zambia

Using plot level panel data and multinomial endogenous switching regression, this article analyzes the adoption and welfare impacts of multiple agricultural technologies in eastern Zambia. We adapt a multinomial endogenous switching/treatment effect regression framework to correct for selection bias and endogeneity originating from both observed and unobserved heterogeneity. Results indicate that joint adoption of multiple agricultural technologies had greater impacts on crop yields, household incomes, and poverty than the adoption of individual components of the technology package. Our findings suggest that efforts aimed at raising household incomes and reducing poverty should focus on promoting the adoption of multiple agricultural technologies through provision of improved support services such as extension and input supply.     

Supermarkets, wholesalers, and tomato growers in Guatemala

The article shows the asset‐related determinants and the impacts of the participation of small farmers in supermarkets versus traditional market channels in Guatemala. Compared to farmers selling only to the traditional market channels, farmers selling to supermarket channels are larger (but are in the upper tier of the “small farmer” category), have more capital, and are much more specialized in commercial horticulture in general and in tomatoes in particular. While they have higher yields, they also have higher input use, including use of chemicals. In fact, they severely overuse pesticides and fungicides. Moreover, these greater input expenditures mean that their profit rates are roughly similar to those of farmers in the traditional market channel. Supermarket‐channel farmers prefer the more demanding wholesale‐supermarket channel because it offers lower risks and lower transaction costs to market, a variety of quality grades of tomatoes, all year long. In turn, the supermarkets, who do not buy direct but rather source from a few specialized‐dedicated wholesalers, rely on this year‐round supply, lower transaction costs, and consistency of quality.