Seasonal Adjustment in a Market for Female Agricultural Workers

This article explores seasonal adjustment in the market for temporary agricultural labor. We estimate a model of participation allowing for unobserved heterogeneity and endogeneity/selection bias using daily observations from Chilean panel data, and a model of daily earnings. Results indicate that seasonal wage variation is an important aspect of labor-market adjustment, contributing to a large change in labor force participation. The labor force participation rate of women is significantly more elastic to changes in the expected wage than is that for men. Nonetheless, we find evidence of substantial open unemployment during the slack season, especially for females, probably due to frictional and efficiency wage effects.     

Revisiting constraints to smallholder participation in high-value markets: A best-worst scaling approach

We show how policymakers in developing regions can generate richer insights from using the choice experiment method best-worst scaling (BWS) method when ranking policy priorities on an importance scale. More specifically, we adopt BWS to provide an update on constraints that limit the participation of Kenyan horticultural smallholder farmers in modern agricultural value chains. In addition to traditional constraints posed by input market failures and missing institutions, we considered constraints such as trust and familiarity with buyers shown by recent empirical studies to inform smallholders’ market choices. Ascertaining the relevance of these constraints highlights our contribution to the existing literature. We find that farmers consistently rate access to high-quality inputs as their main constraint followed by concerns about access to credit, the high cost of meeting food standards, missing cooperatives, and exploitative intermediaries. Respondents considered insufficient labor, small farmlands, and weak tenure rights as the least important constraints. Age, location, gender, household income, and education influence the relative importance various segments of smallholders place on these constraints. For example, constraints are economic rather than personal for low-income farmers. Counterintuitively, rural smallholders are less likely to perceive poor transportation network as a constraint. Smallholders’ distrust of buyers they interact with is informed by their location and income. In designing intervention initiatives, policies that focus on segments of smallholders are needed for improving smallholder participation in modern agricultural value chains.     

How poor are women in rural India?

The assessment of poor women in India as dependent and exploited regardless of poverty focused strategies is reflected in this review of relevant literature. The scholarly approaches to the problems of poor women involve redirection and expansion of resources to women (increase bank credit) through policy and institutional changes, and involve improving women's welfare through changes in class and gender hierarchies; both pertain to restructuring power groups. A little ascribed to belief is that the organization of women's numbers will empower women; the constraints are stated. There is also some argument over whether to design women-specific programs or integrate women into existing programs; some examples are given of successes and difficulties. The regionalization of poverty in eastern and central India is discussed. The growth of the poor has been among the landless, wage-dependent households. 9.6% of households (7.5 million) are headed by women. Women work fewer hours and at lower wage scales and have fewer employment opportunities. Lower earnings are coupled with differentials in demand for female and male labor in agriculture and a crowded labor market. There is a concentration of women in less visible, nonmonetary subsistence production and domestic work. Women are undercounted in employment studies. Women predominate in agricultural activity. Women's status is influenced by economic status, caste, and ethnic background. Domestic work increases status for women and households. The poorer households have greater labor force participation, particularly as wage laborers rather than unpaid family workers. Regional factors affecting rural household strategies are factors affecting the economy (topography, rainfall, climate) and the degree of development, plus sociocultural variables (kinship and religious beliefs which affect the social domain of women), and the degree of dependence on hired vs. family labor. There are sharp contrasts in the value and survival of women regionally. Female labor force participation is low in all regions; the nature and distribution of agricultural laborers is discussed followed by examples from 3 different regions (east, south, and north). The gender inequalities in access to basic needs are reviewed for sex ratio, mortality, and nutrition, and education. The preference is for gender-based policies targeting women.     

The dynamics of Chinese rural households' participation in labor markets

The work is devoted to the dynamics of labor market participation of Chinese rural households. Based on a theoretical farm household framework the choice between four distinct labor market participation states is empirically analyzed. Using household data over the period 1995–2002 from the province Zhejiang we apply a discrete time hazard approach to analyze households' labor market participation histories. In particular, we investigate the movements between autarky and participation in general and, more specifically, the shifts between part-time and full-time farming. Estimation results suggest significant duration dependence, more precisely, a decreasing risk of moving from one state to another with an increasing time a household occupies one of these states. Further, the likelihoods of starting any participation in labor markets and to start part-time farming are considerably higher than to end participation or to return to full-time farming. In addition, we find that labor market participation decisions are significantly related to several household and farm characteristics.     

The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators

With the 1996 Farm Act, the United States introduced payments that were designed to be "decoupled." Labor allocation choices are likely to be affected by receipt of payments, and income from off-farm jobs has been the major source of income for most farm households for sometime. This article examines whether the 1996 change has affected the off-farm labor participation of farm households. We conclude that the observed increase in off-farm participation of farm operators who received payments was not the result of the 1996 policy change. Government payments, whether coupled or decoupled, have a negative effect on off-farm labor participation.     

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.     

Female Participation and Labor Market Attachment in Rural Canada

This article explores the reasons for differences in female rural–urban participation rates by estimating a dynamic model of participation allowing for unobserved heterogeneity and state dependence using Canadian panel data. The results suggest that overall observed differences in rural–urban participation rates are primarily due to differences in observed socioeconomic characteristics. However, for women resident in low-income households, there is evidence that the operation of rural labor markets effectively lowers their participation rates.     

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.     

Marketing Channel Choice and Marketing Efficiency Assessment in Agribusiness

In agribusiness, profitability critically depends on the choice of proper marketing channels. This article studies the factors influencing marketing channel choices of vegetable farmers. Vegetable farmers have generally 3 choices to sell their produce, which are formal and informal market participation vis-à-vis nonmarket participation. Ten independent variables are considered for the study and a multinomial logistic regression model is used for the analysis. The study finds 4 major variables that can influence farmers’ decision to shift from nonmarket participation to informal or formal market participation. The article further identifies 4 microlevel marketing channels and assesses their efficiency.     

Oligopsonistic Landlords, Segmented Labor Markets, and the Persistence of Tied-Labor Contracts

This article examines contractual labor arrangements in agrarian economies that persist as a consequence of market power on the part of landlords faced with output uncertainty. We show that a segmented labor market characterized by tied-labor contracts and involuntary unemployment in the lean season are optimal as compared to a labor hiring arrangement that guarantees full employment of labor in both seasons. Government intervention in the form of a specific subsidy targeted toward the hiring of permanent laborers may raise the welfare of all laborers while a specific subsidy directed toward the hiring of casual laborers or the institution of relief programs that absorb the rural unemployed in the lean season leads to the casual laborers in the economy being worse off.     

The impact of safety nets on technology adoption: a difference‐in‐differences analysis

This article contributes to a growing body of empirical literature relating credit constraints and incomplete insurance to investment decisions. We use panel data from rural Ethiopia to investigate whether participation in a safety net program enhances fertilizer adoption. Using a difference‐in‐differences estimator and inverse propensity score weighting, we find that participation in Ethiopia's food‐for‐work (FFW) program increased fertilizer adoption in the short run, but not in the long run. Results also indicate that the intensity of fertilizer usage increased with livestock holdings for FFW‐participant households, providing some evidence that the intervention helped asset‐rich farm households more than asset‐poor households. We find no significant effects of free distribution on fertilizer adoption or intensification. Our results are consistent with the hypothesis that safety nets can be viewed as mechanisms that allow households to take on more risk to pursue higher profits. The results highlight the importance of safety net programs, their effectiveness in ensuring farmers that they will be protected against uninsured shocks, and how that assurance can translate into productivity‐enhancing behavior.     

Welfare Implications of Community Forest Plantations in Developing Countries: The Orissa Social Forestry Project

Community forest plantations are a common intervention in developing countries. We use household and remote sensing data from Orissa, India, to estimate welfare effects of community forest plantations, in terms of the value of decreased collection times plantations afford users. A selection model, accounting for possible jointness in site location and productivity, is used to estimate collection production functions for different household labor categories in natural and community forests. Two measures of an opportunity cost of time are used to determine welfare effects of time saved due to community forests. We find access to community forests is important to marginal productivity of different labor categories, but to different degrees, highlighting the need to disaggregate household data when analyzing these interventions. We also find substantial welfare improvements from time savings for many households and villages.     

An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia

Do rural households in developing countries make market participation and volume decisions simultaneously or sequentially? This article develops a two-stage econometric method to test between these two competing hypotheses regarding household-level marketing behavior. The first stage models the household's choice of whether to be a net buyer, autarkic, or a net seller in the market. The second stage models the quantity bought (sold) for net buyers (sellers) based on observable household characteristics. Using household data from Kenyan and Ethiopian livestock markets, we find evidence in favor of sequential decision making, the welfare implications of which we discuss.     

Does oligopsony power matter in price support policy design? Empirical evidence from the Thai Jasmine rice market

In the oligopsony market, farmers may receive low prices and policy analysis assuming perfect competition can yield serious bias results. In this paper, we estimate oligopsony power between processors and farmers and evaluate the welfare impact of the paddy pledging program (PPP), a generous price support program in the Thai Jasmine rice market, with an imperfect competition model. We develop a model that consists of rice supply equation and derived demand equation. We then simultaneously estimate these equations using system estimation methods to recover oligopsony power parameters. Finally, we use these parameters to assess the welfare impact of the price support program. Using annual panel data running from crop marketing year 2001/2002–2015/2016 and exploiting the institutional feature of the PPP, we find strong evidence of some oligopsony power, a moderate level of oligopsony price distortion, and a negative relationship between price support and oligopsony power. We also find that the PPP is inefficient but effective in income redistribution. Moreover, the program benefits both farmers and consumers. With better policymaking decisions, the PPP can be efficient by setting a suitable support price. Therefore, our results show that in the case of the Thai Jasmine rice market, the generally accepted “wisdom” about agricultural price support policy does not necessarily hold, and price support can be designed to improve the efficiency of the market.     

Dynamics of smallholder participation in horticultural export chains: evidence from Ecuador

We study the dynamics of smallholder participation in export value chains focusing on the example of small‐scale broccoli producers in the highlands of Ecuador. Combining cross‐sectional data from a household survey with 11‐year longitudinal data on export market transactions, we explain the hazards of dropping out of a high‐value export chain. We apply a multispell cox duration model that allows us to consider multiple entries and exits from the supply chain. We also provide evidence on the welfare impacts associated with participation. The results suggest that small‐scale farmers’ exit from the export sector is accelerated by high transaction risks experienced in the past. While we find no particular evidence for the exclusion of small‐scale farmers from the export sector, we do find that poorer households and female‐headed households tend to drop out faster, especially as long as the sector is still prospering. Finally, when considering welfare effects, we do not find evidence that participation translates into tangible benefits for broccoli farmers. We discuss some measures that could help improve the long‐term sustainability of smallholder integration in high‐value chains.     

Social welfare effects of removing multiple exchange rates: evidence from the rice trade in Iran

In order to encourage the involvement of the private sector in importing rice, the Iranian government plans to relax the system of multiple foreign exchange rates applied to importers wishing to supply the domestic market. In this article, the welfare effects of removing the current controls on the rice trade, and a domestic rice coupon program, are evaluated by applying a partial equilibrium analysis to 1961–1999 data. The results show that, as far as foreign exchange is concerned, liberalization of the rice market causes an increase in rice imports, mainly due to a decrease in domestic supply. In welfare terms, the loss in producer surplus from rice market liberalization is relatively high, but most rice consumers, and the Iranian taxpayer, would gain. Overall, gains to consumers and taxpayers are estimated to be higher than the losses incurred by domestic suppliers, and therefore net social welfare at national level can be improved by rice market liberalization in Iran. Issues for further discussion include residual food security roles for the state, and supply‐side adjustments in terms of resource use and higher‐quality production.     

Agro-Manufactured Export Prices, Wages and Unemployment

This article estimates the impacts of world agricultural trade liberalization on wages and unemployment in Argentina in the presence of individual labor supply responses and adjustment costs in labor demand. After a 10% increase in agro-manufactured export prices, I find that: ( a ) the employment probability would increase by 1.36 percentage points, matched by a decline in the unemployment probability of 0.75 percentage points and an increase in labor market participation of 0.61 percentage points; ( b ) the unemployment rate would decline by 1.23 percentage points; ( c ) expected wages would increase by 10.3%, mostly due to higher employment probabilities.     

Global market shocks and poverty in Vietnam: the case of rice

World food prices have experienced dramatic increases in recent years. These “shocks” affect food importers and exporters alike. Vietnam is a major exporter of rice, and rice is also a key item in domestic production, employment, and consumption. Accordingly, rice price shocks from the world market have general equilibrium impacts and as such, their implications for household welfare are not known ex ante. In this article, we present a framework for understanding the direct and indirect welfare effects of a global market shock of this kind. We quantify transmission of the shock from global indicator prices to domestic markets. Then we use an applied general equilibrium model to simulate the economic effects of the price changes. A recursive mapping to a nationally representative household living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare. In this analysis, interregional and intersectoral labor market adjustments emerge as key channels transmitting the effects of global price shocks across sectors and among households.     

Tenants’ land access in the rental market: evidence from northern Ethiopia

The purpose of this study is to investigate the allocation efficiency in the tenancy market, and thereby the potential of the market to facilitate operational farm size adjustment that can help land‐poor tenant households to transform into smallholder commercial farms. We analyzed three rounds of balanced panel data for the production seasons 2005–2006, 2009–2010, and 2014–2015 collected from 320 smallholder farms in Tigrai region in northern Ethiopia. Random effects dynamic probit and tobit models are used to assess how land‐poor tenants’ access and extent of access to land are affected by state dependency (earlier participation in the market), kinship ties, climate shocks, and legal restrictions. The results indicate that state dependency and kinship ties with the landholder had strong positive effects on participation and intensity of participation. Climate shocks significantly affected the intensity of participation of tenants already in the rental market. Tenants’ overall access to rented land had not improved from 2005–2006 to 2014–2015. The amount of land accessed by those already in the market was insufficient for them to become commercial farmers. The important policy implication is that orchestrated interventions at community level are needed to reduce transaction costs and thereby improve land access of entrepreneurial tenants.     

Interrelated labor decisions of farm couples: a censored response analysis of off‐farm work

Farm couples' labor market responses are partly the discrete choice of entering the off‐farm labor market and partly the continuous choice of off‐farm working hours, given entry. Such a setting is interesting when examining the increasing occurrence of multiple job‐holdings among farmers in Western economies. Most existing analyses of off‐farm labor supply only model the decisions of the farmer, not the joint decisions of the farm couple. This article presents a framework for handling such interrelated discrete/continuous choices, involving also farm production and household consumption. The derived two‐equation sub‐model for husband/wife's censored labor responses is estimated from a 10‐year Norwegian panel data for 342 farms. The results agree to some extent with earlier studies, but are more informative because of the longer panels—which allows a more extensive examination of latent heterogeneity and behavioral persistence—because it provides cross‐effects in the spouses' labor supplies. The results show some interesting differences between how the independent variables influence the labor supply of operator and spouse. This is most evident for the cross‐effects of education, children, and wage rate. Overall, the results strongly support applying a panel‐censoring model that accounts for latent heterogeneity in this context.