Smallholder participation in vegetable exports and age‐disaggregated labor allocation in Northern Tanzania

Modern agricultural supply chains have been playing an increasingly important role in developing countries and have had significant effects on rural labor markets. This article analyses the effects of smallholder farmer participation in export vegetable supply chains in Northern Tanzania on both household hired labor demand and off‐farm labor supply, using an age‐disaggregated approach. In our sample, neither separability nor exogeneity of smallholder farmer participation in export supply chains can be rejected. Hence, we apply lognormal double‐hurdle models and find that participation in export supply chains positively affects households’ decision to hire labor from all age groups. We also find that it increases the unconditional overall level of hired labor demand, while the age‐disaggregated analysis shows that these effects mostly benefit rural youth. However, our sample does not allow us to establish statistically significant evidence of an effect on household off‐farm labor supply although the point estimates point to nonnegligible positive effect sizes.     

How does land fragmentation affect off‐farm labor supply: panel data evidence from China

This article provides a deeper theoretical understanding of the linkages between land fragmentation and off‐farm labor supply in China, and investigates this relationship empirically in a more direct way than does the existing literature. Drawing upon a rural household panel data set collected in Zhejiang, Hubei, and Yunnan Provinces from 1995 to 2002, we estimate the effects in two steps. First, we estimate the effect of land fragmentation on labor productivity. Second, we estimate the effect of land fragmentation on off‐farm labor supply. The production function results show that land fragmentation indeed leads to lower agricultural labor productivity, implying that land consolidation will make on‐farm work more attractive and thus decrease off‐farm labor supply. However, the effect of land consolidation on off‐farm labor supply is not significant. One likely explanation for this result may be the potentially imperfect labor markets.     

Off‐farm labor market decisions and agricultural shocks among rural households in Kenya

Using household level data from rural Kenya, this article explores whether and how farm households respond to unfavorable agricultural production environments, including any ex post adjustments in off‐farm labor supply in response to unexpected weather shocks. While controlling for a wide range of educational, demographic, and other locational factors, we examine how long‐term weather conditions and specific rainfall shocks influence a household's decision to engage in, and their earnings from, the off‐farm labor market. We find that rural households engage in off‐farm work as a long‐term strategy to deal with the effects of anticipated weather conditions on their farming operations. The analysis does not reveal major short‐term adjustments in off‐farm engagement as a result of specific, unexpected rainfall shocks; these households do however rely on remittance income and petty agricultural wage labor under these circumstances. Holding other factors constant, and conditional on participation, households in areas with a more productive local agriculture tend to earn more from off‐farm work especially in the informal/business sector than their counterparts in regions with a less productive agriculture. As expected, a vibrant local economy in the form of public investment increases the probability of off‐farm participation.     

Policies for sustainable development in the hillside areas of Honduras: a quantitative livelihoods approach

In this article, we use data for 376 households, 1,066 parcels, and 2,143 plots located in 95 villages in the hillside areas in Honduras to generate information needed by decision makers to assess the needs and opportunities for public investments, and design policies that stimulate natural resource conservation. We develop a quantitative livelihood approach, using factor and cluster analysis to group households based on the use of their main assets. This resulted in seven household categories that pursue similar livelihood strategies. We use a multinomial logit model to show that livelihood strategies are determined by comparative advantages as reflected by a combination of biophysical and socioeconomic variables. While 92% of the rural hillsides population in Honduras lives on US$1.00/capita/day or less, households that follow a livelihood strategy based on basic grain farming are the poorest because they often live in isolated areas with relatively poor agro‐ecological and socioeconomic conditions. Opportunities for off‐farm work tend to be limited in these areas and household strategies that combine on‐farm work with off‐farm work earn higher incomes. Per capita incomes can be increased by improving road infrastructure, widening access to land, policies that reduce household size and dependency ratios, and adoption of sustainable land management technologies that restore soil fertility. We used probit models to show that the latter can be promoted by agricultural extension programs and land redistribution. Investments in physical assets should be directed toward households that pursue livelihood strategies based on off‐farm employment or coffee production, while agricultural training programs are best focused on livestock producers.     

Factors affecting entry and intensity in informal rental land markets in Southern Ethiopian highlands

Informal land transactions, particularly rental land markets, are emerging in rural Ethiopia in response to the inadequacies of the administratively based land distribution system to meet the growing demand for land and correct imbalances in factor proportions at the farm level. These informal land markets provide a vehicle to equalise factor proportions at the farm level and to improve productivity and hence households' welfare. Among the farmers who lease out land, those who live in the highland‐areas, where land is scarce and unequal, are more likely to engage in these markets. Increases in the size of land holdings relative to labour and livestock ownership, the number of non‐working household members and pressure for subsistence increase the likelihood of leasing out land. On the other hand, increases in the number of working adults, improved nutritional status and greater wealth affect negatively the supply of land into these markets. The potential exists for these markets to improve factor equalisation, reduce inequality in land holdings, and shift the income position of participating households. However, success depends on whether other factor markets are functioning to thwart forced disposal of land to meet subsistence. Public policy has pivotal role in fostering the growth of these markets and their land transfer and factor equalisation functions by ensuring their legally enforceable status, and removing legal restrictions that constrain choices of contracts and trading over greater distances. In addition, both long and short‐term policy measures are needed to reduce the extent to which poor farmers engage in distress transactions.     

The increasing importance of nonfarm income and the changing use of labor and capital in rice farming: the case of Central Luzon, 1979–2003

There have been sharp increases in nonfarm income among farm households in Central Luzon for the last few decades. This study attempts to identify the effects of the increasing nonfarm income on the use of tractors and threshers and on the employment of hired labor as a substitute for family labor. We found that while the increased nonfarm income positively affects the ownership of tractors, it has no significant impact on the use of agricultural machines due presumably to the development of efficient machine rental markets. We also found that the increased nonfarm income leads to the increased use of hired labor, thereby releasing family labor to nonfarm jobs.     

The Theory of the Farm Household: An Application to Saskatchewan

A theoretical model is presented which integrates the consumption and production components of the rural household. A theoretically determined system of expenditure equations, derived factor demand equations and an off-farm labor supply equation are estimated using primary data for Saskatchewan farm households. From the empirical results we conclude that if the wage rate can be observed or estimated, the farm household's behavior can be explained empirically in a manner consistent with received theory. Summary and Conclusions A theoretical model integrating the consumption and production sides of the farm household or enterprise is estimated empirically using primary data for Saskatchewan farm households. The farm household was assumed to maximize its utility function subject to farm production and cash flow constraints. The empirical results indicate that the theoretical model can be estimated successfully even when data are sparse. While the coefficients for the expenditure, derived demand, and off-farm labor supply equations are consistent with coefficients from similar equations estimated separately by others, the theoretically more precise integrated approach specifies the simultaneous effect of the variables across equations. From the empirical results and the theoretical considerations it is obvious that the wage rate is a key explanatory variable in the model. The wage rate links the three components of the model–final expenditures, the derived input demands and off-farm labor hours. The wage rate is one determinant of the allocation of the operator's time (although other factors such as the nature of the operation and opportunities to work off-farm dominated in this study), and both the wage rate and the allocation of the time determine the eventual income available to the rural household. In essence, then, the problem of explaining farm household behavior when the household's business enterprise function cannot be separated from its consumption activity is similar to that of traditional models based on the theory of the firm and models of consumer behavior. The only difference is that the wage rate is observable in the traditional models but needs to be estimated as a shadow price in models which seek to explain rural household behavior. As a result, research in this area must start with an explanation of the allocation of (at least) the operator's labor and a measure of the shadow wage rate. If the entire household's allocation of time between on-farm and off-farm labor and leisure is determined, it is possible to treat its consumption and production activities separately. Further research is required to extend the model to explain household labor supply to both the farm and off-farm labor markets.     

Agriculture and small towns in Africa

Africa is urbanizing rapidly. Yet most dual economy models focus on the sectoral rather than spatial dimensions of development. This article adopts a “dual–dual” approach to measuring rural/urban and farm/nonfarm linkages. We develop an economy‐wide model of Ethiopia that distinguishes between cities, towns, and rural areas. The model captures detailed sectoral and regional linkages, internal migration flows, and externalities from urban agglomeration. We find larger linkages between agricultural production and small towns and show that redirecting urban growth toward towns rather than cities leads to broader‐based economic growth and poverty reduction. In contrast, industry and services, particularly within cities, are far less effective in reaching rural areas and the poor. Africa's current urbanization pattern—toward major cities rather than towns—will weaken national growth–poverty linkages. Urbanization that takes advantage of the synergistic relationship between agriculture and small towns has the potential to result in a more inclusive growth trajectory.     

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.     

Are maize marketers averse to quality loss in supplies? A case study from Ghana

To ensure sustainable post‐harvest loss reduction, markets that are averse to quality loss and provide incentives for farmers to supply high quality produce are crucial. Such markets will be averse to quality loss, offering distinct prices and substantial rewards to farmers for the supply of quality produce. Farmers in sub‐Saharan Africa (SSA), where informal markets exist, have often assessed the rewards for the supply of quality produce as inadequate. Hence, this study investigates if intermediary buyers are actually indifferent to quality loss in supplies based on two scenarios—the informal market scenario and a hypothesized grade scenario. The analysis builds on survey data from marketers in two informal maize markets in Ghana. For the hypothesized grade scenario, random effect regression was used to examine the influence of marketer‐specific characteristics on premiums offered to farmers over different quality levels. The findings suggest that although informal markets seem not to adequately value loss reduction, investing in institutional infrastructures, such as grades and standards can change this. Furthermore, interaction among marketers and association participation positively influences the value marketers place on quality loss reduction. The result highlights the importance of standard grading systems and collaborating with market groups in minimizing quality loss.     

How do informal farmland rental markets affect smallholders’ well‐being? Evidence from a matched tenant–landlord survey in Malawi

We estimate the efficiency and equity returns to farmland rental markets in Malawi using a matched tenant–landlord survey of smallholder farm households in four districts. Our sample allows us to more fully observe the landlord side of the rental market, which is almost always missing in previous studies. Our results suggest that land rental markets promote efficiency by facilitating a net transfer of land to more productive farmers. We also find that land rental markets promote equity as conventionally defined in the land markets literature, that is, by transferring land from land‐rich households to land‐poor households, and from labor‐poor to labor‐rich households. However, our study identifies some important challenges for land rental markets in this context. First, we find that tenants in our sample are wealthier than their landlord counterpart on average in all dimensions other than landholding. In addition, most landlords report the motive for renting out their land as either the need for immediate cash, or the lack of labor and/or capital to cultivate the plot that was rented out. These findings align with concerns about potential “stress renting” by poor landlords and suggest the value of defining equity along a broader set of dimensions other than simply equalizing the distribution of farmland and labor.     

Institutional innovation and policy support to facilitate small‐scale farming transformation in China

While the Asian food economy has been experiencing significant transitions, it is widely believed that little transformation has occurred in farm land operation. However, the recent rapid emergence of middle and large‐size farms in many regions of China is striking, as is the increase in size of operational units. The overall goal of this article is to understand small‐scale farm transformation in China based on a unique dataset surveyed in Northeast and North China. The results show that the institutional innovation through establishing land transfer service centers to promote land rental markets and reduce transaction costs, policy support to speed up land consolidation, and farm mechanization services are major driving forces in the recent evolution of China's farm operations. The article concludes with policy implications on small‐scale farming transformation in China and the rest of world and identifies research issues for further study.     

Does human capital raise farm or nonfarm earning more? New insight from a rural Pakistan household panel

This study explores how human capital affects farm household earnings using two tools to refine measurement of human capital effects. First, it employs a two‐sector model to allow the allocation of family labor between farm and nonfarm activities. Second, it accounts for village fixed effects to evaluate whether results from panel data differ meaningfully from a cross‐sectional data analysis with local binary variables. The results show that education has a negligible effect on farm earnings; instead, experience appears to be the principal channel by which human capital affects agricultural performance in a traditional rural setting. Our results also suggest that prior models that fail to separate nonfarm activities spuriously exaggerated the effect of education to the farm sector. In addition, typical cross‐sectional analyses that ignore fixed effects may cause the effects of education on rural household earnings to be significantly overstated. The fact that panel data regressions accounting for village‐level fixed effects found only one instance of education raising earnings—the effect of literacy on nonfarm income—suggests that considerable heterogeneity may have been ignored in cross‐sectional data analyses, especially ones that omitted village‐level effects.     

A hedonic approach to estimating the supply of variety attributes of a subsistence crop

The article extends the household hedonic model by estimating a supply function for variety attributes of a subsistence crop in a developing economy. The model is applied to bananas in Uganda, making use of disaggregated data on variety‐specific farm‐gate banana bunch prices and attributes, while accounting for the semisubsistence nature of banana‐producing households. The article is motivated by the need to understand the attribute trade‐offs made by farmers at the farm gate in light of targeted variety improvement efforts and their impact on banana markets. Whether variety improvement will pay off at the market level requires a more detailed examination of the relative worth of banana attributes within the structure of consumer preferences and production technologies related to bananas in Uganda. The results confirm the importance of consumption and production attributes in selling behavior. Quality and bunch size are found to be complements at the farm gate. Banana bunches that capture a premium at the market will be those that provide bundles of desirable consumption and production attributes simultaneously. By revealing important price–attribute relationships, the findings provide guidance for crop improvement efforts and diversification choices, while taking into account implicit market signals for output attributes.     

Horticulture,livelihoods, and urban transition in Africa: evidence from South‐West Cameroon

This article documents change in periurban horticulture using repeat surveys in 1995 and 2004 of about 300 households around Muea, Cameroon. Real household incomes increased by 14%, with a large shift from farm to nonfarm income. Within agriculture, activity shifted from staple crops to horticulture, both for sale and in home consumption. In 1995, there were large remittances from farmers involved in periurban horticulture to their village of origin; in 2004 remittances continued and horticultural farmers were also heavily involved in informal financial associations. Periurban horticulture is disproportionately practiced by women and older workers, and plays an important and growing role in African livelihoods.     

The global bio‐economy

Throughout history, agriculture and natural resources have been used for the production of food, feed, fibre, fuel, and environmental goods. Recent developments in demand both in terms of quantity and quality, technology, and traditional energy and chemistry markets have reinforced the demand for nonfood applications. These developments, in combination with increased consumer demands for various food characteristics, have led to a rapidly growing and globally integrated “bio‐economy.” This article introduces and summarizes the plenary papers on the opportunities and challenges for the bio‐economy that were presented at the 28th triennial conference of the International Association of Agricultural Economists (IAAE) in Brazil. The following aspects of the bio‐economy are covered: finance, volatility, poverty, conflict, productivity, investment, resource constraints, and governance.     

劳动力城乡统筹的政治经济学分析

从政治经济学的角度看，劳动力价值是由其成本决定的，并受市场供求关系的影响。研究发现，与农村劳动力再生产成本相比，农村劳动力价格过低。原因在于：一是劳动力市场总量供过于求；二是劳动力市场在结构上处于一种分割状态，从属劳动力市场大量低素质劳动力的存在导致了这部分市场供给严重过剩，劳动力价格难以提升。要打破市场分割，必须加大对农村人力资本的投入，提高劳动者价值。     

Modelling the Crop Variety Demand of Semi‐Subsistence Households: Bananas in Uganda

We propose an approach to model the derived demand for crop varieties among semi‐subsistence farmers in a developing economy, and apply it to smallholder banana producers in Uganda. We model variety planting decisions as being composed of an extensive margin decision to grow a subset of locally available varieties (variety choice); and an intensive margin decision about the scale or extent of variety cultivation per farm (variety demand). We estimate variety demand equations using a more complete representation of the choice set upon which observed planting decisions are made. Computed elasticities of variety demand with respect to variety attributes indicate that the relative importance of consumption and production attributes varies by location and proximity to markets, from which we draw implications for the social and economic impact of crop improvement. The approach that we propose has broad appeal for analysing adoption decisions for modern or traditional varieties of both major and minor crops in developing countries.     

Is off-farm income reforming the farm? Evidence from Mexico

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities.     

China’s Agricultural Policy Transition: Impacts of Recent Reforms and Future Scenarios

This article reviews recent developments in China’s agricultural domestic support policy, especially the transition from taxing farmers and agriculture to providing direct subsidies to grain production and purchased inputs. A model‐based quantitative analysis on the effects of these policy changes is presented. Simulation results suggest that recent policy changes have achieved the declared policy goals of increasing grain production and boosting farm income. Much of the increase in grain production and farm income can be attributed to higher per unit return to arable land, land reallocation to grain production and extra agricultural employment triggered by the policy changes. Based on the assumption that China’s public assistance to agriculture and farmers will continue and rise, two hypothetical future scenarios are simulated. Using all the support permitted under WTO de minimis limits with existing instruments, China’s policy will increase grain production, change trade patterns seemingly contrary to China’s comparative advantage, increase rural employment and significantly increase farm income (by more than 12%). If, however, decoupled instruments are applied to raise China’s agricultural domestic support to the same level, China’s agricultural production and trade will remain unchanged, rural employment remain stable, but farm income will be increased by nearly 15%.