Annual and cropping season environmental production conditions effects on smallholder technical efficiency in sub‐Saharan Africa: Evidence from Ethiopia

This article investigates the impact of environmental production conditions on smallholder farmers’ technical efficiency in Ethiopia for wheat, maize, and sorghum farming. We use a household panel data set with annual and cropping season environmental production conditions to estimate the technical efficiency scores. The results show that including environmental production conditions in the stochastic frontier has a significant impact on farmers’ technical efficiency scores. Technical efficiency scores improve when environmental production conditions are incorporated in the stochastic frontier. Thus, accounting for environmental production conditions reduces the inefficiencies that otherwise may be attributed to the characteristics of smallholder farmers.     

Mismeasurement and efficiency estimates: Evidence from smallholder survey data in Africa

Smallholder agriculture in sub-Saharan Africa is commonly characterised by high levels of technical inefficiency. However, much of this characterisation relies on self-reported input and production data, which are prone to systematic measurement error. We show theoretically that non-classical measurement error introduces multiple identification challenges and sources of bias in estimating smallholders' technical inefficiency. We then empirically examine the implications of measurement error for the estimation of technical inefficiency using smallholder farm survey data from Ethiopia, Malawi, Nigeria and Tanzania. We find that measurement error in agricultural input and production data leads to a substantial upward bias in technical inefficiency estimates (by up to 85% for some farmers). Our results suggest that existing estimates of technical efficiency in sub-Saharan Africa may be severe underestimates of smallholders' actual efficiency and what is commonly attributed to farmer inefficiency may be an artefact of mismeasurement in agricultural data. Our results raise questions about the received wisdom on African smallholders' production efficiency and prior estimates of the productivity of agricultural inputs. Improving the measurement of agricultural data can improve our understanding of smallholders' production efficiencies and improve the targeting of productivity-enhancing technologies.     

Productivity,credit, risk,and the demand for weather index insurance in smallholder agriculture in Ethiopia

The article explores the relationship between fertilizer use and the demand for weather index insurance (WII) among smallholder farmers in Ethiopia. We examine whether fertilizer use is profitable under current smallholder production conditions, whether risk‐related factors affect fertilizer use, and we estimate the returns to inputs in the agricultural production function in the absence of insurance. We then study how these primitives of agricultural production functions relate to insurance demand. The study compares a survey‐based estimate of willingness to pay with actual uptake for the weather insurance, finding the stated and actual demand to be almost completely uncorrelated. While those with high marginal returns to inputs say they would purchase insurance, only those with low marginal returns actually do, consistent with the stated purpose of the product as input insurance. Insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers.     

Big is efficient: Evidence from agricultural cooperatives in Ethiopia

In Ethiopia, there is a renewed interest in agricultural cooperatives as an institutional tool to improve the welfare of smallholder farmers. One of the pathways through which cooperatives benefit their members is scale economies. However, the establishment of cooperatives in Ethiopia seems to pay little attention to the size of the organizations. This article aims at investigating the effect of size on cost efficiency of agricultural cooperatives. More specifically, the purpose is to examine whether a single cooperative can serve a given number of farmers at a lower cost than two or more smaller cooperatives could. We employ the concept of cost subadditivity to compare the cost efficiency of large versus small cooperatives, and by extension unilateral actions. We estimate a flexible production technology using cross‐sectional cooperative‐level data. Findings show that costs would drop by 78% to 181% if farmers join hands in relatively large rather than small cooperatives.     

Derivatives for Development? Small‐Farmer Vulnerability and the Financialization of Climate Risk Management

While agricultural production has always been a risky endeavour, it has become even more so in the current context of climatic change and increasing market uncertainty. Meanwhile, the rollback of state protections has rendered small‐scale farmers, especially marginalized peasant producers in the Global South, particularly vulnerable to these contemporary stressors. This essay critically evaluates the contemporary roll‐out of financial derivatives that purportedly aim to mitigate smallholder vulnerability. It gives particular attention to a novel type of derivative known as index‐based agricultural insurance (IBAI) that plays an increasingly prominent role in initiatives to ‘climate proof’ agriculture. The creation of IBAI markets has required significant work, including (1) technical interventions to debundle environmental risk from agricultural production and rebundle it in novel ways that support private financial capital and agricultural input suppliers, (2) extensive state support in the creation of risk markets, and (3) the construction of an accommodating ‘insurance culture’ among small‐scale producers. In addition to mitigating weather‐based risk, a primary objective of IBAI is to spur agricultural modernization. In promoting this agenda, IBAI initiatives may have the paradoxical effect of exposing smallholders to new risks while expanding their overall vulnerability to environmental and economic stressors.     

Farmers’ Income and Production Responses to Rural Taxation Reform in Three Regions in China

The relationship between agricultural taxation and production efficiency has been thoroughly explored for many countries. Recently, China has taken various measures including the rural taxation reform (RTR) to promote grain production and to increase farmer incomes. In this study, we investigate whether the Chinese policy of abolishing rural taxation has improved farm households’ incomes and affected their production decisions. Using household survey data obtained from three regions in China, we estimate the effect of the RTR on farmers’ income. Results show that the RTR has significantly improved farmers’ post‐tax net income by 9.2% in Shandong, 16.9% in Shanxi and 16.8% in Zhejiang. These increments, mostly from farm income rather than from off‐farm income, are much higher than the direct income increase from the tax savings. In addition, we examine the dynamic impact of farmers’ net income, and find that the RTR has a sustained positive income effect in Shandong and Shanxi, whereas its positive effect in Zhejiang appears temporary. We also examine farmers’ production responses to the RTR. Results show that farmers in the three regions respond in different ways: farmers in Shandong significantly increase their labour input, farmers in Zhejiang increase intermediate inputs, whereas Shanxi farmers augment their intermediate inputs and enlarge their crop acreage. It appears that the farmers’ responses to the taxation reform vary due to the agronomic and economic factors in these three regions, suggesting that diverse post‐RTR supplemental policies should be implemented in different regions.     

How Might Shadow Price Restrictions Reduce Technical Efficiency? Evidence from a Restricted DEA Analysis of Coffee Farms in Vietnam

We use data from smallholder coffee farms in Vietnam to measure the technical efficiency of coffee producers, and the degree to which potential restrictions on the shadow prices of chemical inputs might reduce overall efficiency among these farmers. Using input‐oriented data envelopment analysis (DEA) we find the use of pesticide and herbicide accounts for a relatively small proportion of overall technical efficiency in the sample. We place restrictions on input shadow prices and show that restricting their importance does not dramatically alter patterns or measures of short‐run efficiency.     

The Impact of Industrial Investments on Land Use and Smallholder Farmers’ Livelihoods in Ethiopia

This study analyzes industrialization-induced agricultural land conversion (ALC) and its impact on land use change, food crop production, and the livelihood of smallholder farmers in peri-urban Gelan and Dukem, Oromia Region, Ethiopia. The study was carried out using a mixed method approach, i.e., qualitative and quantitative methods. Data were collected through various methods, e.g., household survey, expert interview, field observation, and focus group discussions method. Furthermore, a total of 223 interviews with farmers were conducted in Gelan and Dukem. Results show that large-scale industrial investments in the case study area led to substantial land use change, an appropriation of agricultural land, and an increase in the number of landless farmers, as well as farmers with small farmland holding sizes of less than one hectare. At the same time, the total crop production in the area decreased. The ‘development pace’ of the investments is often very slow. Only 28% and 37% of the licensed projects in Gelan and Dukem had entered their operational phases by the end of 2014, respectively. The study concludes that if the incomes of smallholder farmers are not enough to meet the needs of their families, they will need to create some income alternatives. Thus, considering the population growth and limited farmland, it is necessary to support various income-generating activities in order to improve farmers’ livelihoods rather than depending entirely on low productive methods such as traditional agricultural activities and non-mechanized production tools. It is worth mentioning that the results of this study will enhance the positive impacts of ALC and minimize the negative ones through land use planning and management tools. Furthermore, the main findings allow us to specify the gaps in access, utilization, and coverage due to wrong policy priority and institutional and technological variables.     

Small U.S. dairy farms: can they compete?

The U.S. dairy industry is undergoing rapid structural change, evolving from a structure including many small farmers in the Upper Midwest and Northeast to one that includes very large farms in new production regions. Small farms are struggling to retain competitiveness via improved management and low‐input systems. Using data from USDA's Agricultural Resource Management Survey, we determine the extent of U.S. conventional and pasture‐based milk production during 2003–2007, and estimate net returns, scale efficiency, and technical efficiency associated with the systems across different operation sizes. We compare the financial performance of small conventional and pasture‐based producers with one another and with large‐scale producers. A stochastic production frontier is used to analyze performance over the period for conventional and pasture technologies identified using a binomial logit model. Large conventional farms generally outperformed smaller farms using most economic measures—technical efficiency, various profitability measures, and returns to scale.     

The Economics of Sustainable Land Management Practices in the Ethiopian Highlands

This article uses data from household‐ and plot‐level surveys conducted in the highlands of the Tigray and Amhara regions of Ethiopia. We examine the contribution of sustainable land management (SLM) practices to net value of agricultural production in areas with low vs. high agricultural potential. A combination of parametric and non‐parametric estimation techniques is used to check result robustness. Both techniques consistently predict that minimum tillage (MT) is superior to commercial fertilisers (CFs), as are farmers’ traditional practices (FTPs) without CFs, in enhancing crop productivity in the low agricultural potential areas. In the high agricultural potential areas, in contrast, use of CFs is superior to both MT and FTPs without CFs. The results are found to be insensitive to hidden bias. Our findings imply a need for careful agro‐ecological targeting when developing, promoting and scaling up SLM practices.     

Effect of off‐farm income on smallholder commercialization: panel evidence from rural households in Ethiopia

This article investigates how off‐farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double‐hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off‐farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off‐farm earnings negatively affect the marketed surplus. This indicates that farmers use off‐farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land‐poor households participating in off‐farm work in the process of agricultural commercialization.     

Sustainable agricultural intensification practices and cost efficiency in smallholder maize farms: Evidence from Ethiopia

Sustainable agricultural intensification (SAI) practices have been promoted in developing countries to improve farm productivity and environmental services. However, it is still unclear whether use of a combination of SAI practices has a significant influence on the cost efficiency of smallholder farms. This study investigates whether the cost efficiency of smallholder maize producers in Ethiopia depends on use of input-augmenting and agronomic SAI practices. Stochastic cost frontier models that account for heterogeneity across farms are used for estimation. We find that the use of individual SAI practices increases cost while the combined use of the practices reduces it. The marginal effect on cost reduction is substantial when SAI practices are set at their sample maximum levels. Overall, the results demonstrate the benefit of using a combination of SAI practices in minimizing production cost while addressing the adverse effects of soil degradation and climate variability. To enhance food security, smallholder farm incomes and the sustainability of production in developing countries, policy programs should focus on promoting packages of input-augmenting and agronomic SAI practices.     

中国肉牛养殖效率差异及提升途径研究

[目的]环境条件差异是我国农牧业发展的客观存在,也是导致农牧业投入产出效率千差万别的重要原因,不考虑环境条件影响的效率分析容易模糊农户的投入产出效率,进而可能掩盖效率差异的原因。通过分析发现全国各地区肉牛养殖存在着客观差异,利用模型处理将各地区环境影响处理到最小,从而得到更为准确的肉牛养殖技术效率值。[方法]文章利用国家肉牛牦牛产业技术体系肉牛养殖投入产出监测数据,采用三阶段DEA模型方法,研究农户肉牛养殖投入产出效率差异及其改善途径。[结果]（1）肉牛养殖投入产出效率与环境条件有密切的关系;（2）剔除环境条件差异影响后,87.11%样本的肉牛养殖投入产出效率发生显著变化,其中47.42%效率下降,39.69%效率提升;（3）投入要素冗余问题是肉牛养殖效率差异的本质,投入要素的冗余在剔环境条件影响后也发生了显著变化,进一步的分析发现我国肉牛养殖劳动力冗余问题在西南产区与东北产区较严重,而饲料投入冗余则呈现牧区、农区、农牧交错带地区逐渐增加的状态。[结论]提升我国肉牛投入产出效率要注重改善饲料投入冗余问题,西南和东北产区还要注重改善劳动力投入冗余的问题。     

Crop‐Level Supply Response by Agro‐Climatic Region in Ethiopia

Using farm‐level survey data from Ethiopia, this paper estimates a quadratic restricted profit function to assess the supply response of smallholder farmers. All major crops are identified in the analysis and variations in agro‐climatic and farming systems are accounted for. Peasant farmers, at least in the more commercial Central and Southern zones, do respond positively and significantly to price incentives. Farmers in the Northern zone are least commercial and least responsive to prices, and in fact the model based on profit maximisation does not adequately capture their behaviour. In general, non‐price factors, especially rainfall and market access, are more important than prices in affecting poduction, and which factors are most important varies depending on the crop and region in question. We conclude with suggestions regarding which crops appear most suitable to each agro‐climatic region, and identify the most relevant policy interventions in each case.     

Tenure Security and Farm Efficiency Analysis Correcting for Biases from Observed and Unobserved Variables: Evidence from Benin

We analyse the impact of land tenure security on the technical efficiency of a sample of smallholder farmers in Benin, based on an output‐oriented stochastic distance function. We use propensity score matching to correct for selection bias from observed variables. The Greene ( 2010 ) sample selection model is used to correct for selection bias due to unobserved variables. We estimate meta‐frontiers to analyse agricultural productivity and efficiency differences between landowners and non‐owners. Our results show that non‐owners have consistently higher levels of technical efficiency and productivity.     

Does mixed crop‐livestock farming lead to less diversified diets among smallholders? Evidence from Laos

Malnourishment continues to remain a challenge in developing countries. As the undernourished are largely smallholder farmers, it is widely assumed that farm diversification and mixed crop‐livestock agricultural systems can help alleviate this problem. However, empirical evidence in this context is limited. Hence, we use a two‐year panel's data from Laos to examine whether farm production diversity as well as a mixed crop‐livestock farming system improves household dietary diversity among smallholder farmer. The results from the fixed effects regression indicate that although farm production diversity does lead to a higher dietary diversity, the effect diminishes with continued farm diversification. The counterfactual analysis from the endogenous switching regression reveals that mixed crop‐livestock farming systems do not necessarily enhance dietary diversity. However, we further find that purchasing food from the markets plays an important role in enhancing the dietary diversity of rural smallholder farmers.     

Contrasting Quantitative and Qualitative Approaches to Rural Development Analysis: The Case of Agricultural Intensification in Lebanon

While peripheral rural regions in Lebanon face typical problems of lagging development and economic marginalisation, they have not been regarded as a priority for policy‐makers. Local extensionists have encouraged technological innovation as a means of improving farmers’ livelihoods, and this has led to increasing input use and an intensification of agricultural production. This paper applies contrasting quantitative and qualitative methodologies to analyse the effects of such changes at the level of the overall economy of Lebanon and also to explore the impacts on rural households. A computable general equilibrium (CGE) model simulates shocks in which agricultural output increases due to different types of intensification. The results are contrasted at local level through the use of qualitative case study analysis carried out in the Hermel district of northeast Lebanon. Quantitative simulations indicate that, while agricultural intensification has a positive effect overall on the Lebanese economy, the effects on rural households and the income of farmers are negative. The case‐study interviews demonstrate that, at local level, agricultural trade liberalisation, increased agricultural output and greater volatility of commodity prices have resulted in farmers opting for lower input use and more secure market forms of production.     

浙江省农业绿色发展的驱动因子识别与绩效评价

目的 识别浙江省农业绿色发展驱动因子间的相互关系,并对其评价结果的可靠性进行分析。方法 文章运用DEMATE方法从市场因素、农业社会化服务、生产技术、经营主体能力、绿色生产效益等五个方面选取25个指标对浙江省农业绿色发展驱动因子进行定性识别与评价,并利用模糊综合评价模型对浙江省农业绿色发展评价结果进行定量评估。结果 （1）驱动因子中心度排序为：经营主体能力＞农业社会化服务＞绿色生产效益＞生产技术＞市场因素,其中指标层前十排序依次为：新型农业经营主体数量、绿色生产能力、销售服务体系、技术服务体系、新型职业农民数量、绿色生产意识、金融服务体系、产业融合水平、经营主体收入水平、土地流转市场规范化;指标层原因度大于0的因子有13个,前三排序依次为农产品加工贮藏技术、绿色消费意愿、技术服务体系,小于0的因子有12个,后三排序依次为绿色生产意识、经营主体收入水平、生产施肥技术。（2）市场需求与农业绿色生产效益的最大隶属度为良好,农业社会化服务、生产技术、经营主体能力的最大隶属度为中等。结论 当前,浙江省农业绿色当前主导因素为经营主体能力,其次为农业社会化服务和绿色生产效益,贡献率相对较低,而生产技术和市场因素则偏重于被影响的结果因素方面。因此应切实发挥好新型经营主体的辐射带动作用,促进小农户与现代农业发展有机衔接;小农户的绿色生产意识和能力受其他因素影响较大,应合理引导农村土地流转,促进新型农业经营主体培育,促进小农生产向规模经营转变;同时引导社会资本投资农业,完善农业社会化服务体系。     

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.