The Political Economy of Agricultural Statistics and Input Subsidies: Evidence from India,Nigeria and Malawi

The political economy of agricultural policies – why certain interventions may be preferred by political leaders rather than others – is well recognized. This paper explores a perspective that has previously been neglected: the political economy of the agricultural statistics. In developing economies, the data on agricultural production are weak. Because these data are assembled using competing methods and assumptions, the final series are subject to political pressure, particularly when the government is subsidizing agricultural inputs. This paper draws on debates on the evidence of a Green Revolution in India and the arguments on the effect of withdrawing fertilizer subsidies during structural adjustment in Nigeria, and finally the paper presents new data on the effect of crop data subsidies in Malawi. The recent agricultural census (2006/7) indicates a maize output of 2.1 million metric tonnes, compared to the previously widely circulated figures of 3.4 million metric tonnes. The paper suggests that ‘data’ are themselves a product of agricultural policies.     

Drought‐tolerant rice,weather index insurance,and comprehensive risk management for smallholders: evidence from a multi‐year field experiment in India

In rainfed production systems throughout India, agricultural activities are dependent upon the summer monsoon, and any aberration in monsoon rainfall patterns can have severe consequences for rice production. There is considerable policy interest in designing programs to lower small‐scale farmers’ exposure to these types of risk given the regularity with which adverse monsoon events occur. This paper introduces a field experiment conducted with two risk management options in the state of Odisha: a drought‐tolerant rice cultivar; and a weather index insurance product designed to complement the performance of the cultivar. Uptake rates for the cultivar itself and for the joint product are compared across two years alongside an analysis of factors that predict uptake. Results indicate high levels of demand for both the products, albeit with a significant degree of price sensitivity. But this sensitivity is agnostic to the nature of price reductions, suggesting that public investments that lower the costs of risk management may be sufficient to encourage broad uptake, without necessarily relying upon distortionary subsidies as is so often done. Sustained demand between years one and two is primarily explained where individuals were indemnified in year one and had a large number of peers also purchasing the product.     

Demand for Crop Insurance in Developing Countries: New Evidence from India

Determining farmers’ real demand for crop insurance is difficult, especially in developing countries, where there is a lack of formal financial sector integration and a high reliance on informal risk mitigation options. We provide some new estimates of farmers’ willingness‐to‐pay for insurance in the context of a large‐scale subsidised programme in India. We conducted a discrete choice experiment with agricultural households across four states in India, enabling us to estimate preferences for specific insurance policy attributes such as coverage period, method of loss assessment, timing of indemnity payments and the cost of insurance. Our results suggest that farmers do value crop insurance under certain conditions and some are willing to pay a premium for such coverage in excess of the subsidised rates they are currently required to pay under this programme. In particular, farmers value the assurances that they will receive timely payouts when they incur losses, and may not have a strong preference for the method with which losses are assessed. On the other hand, farmers are quite sensitive to coverage periods. Our baseline assessment shows that when optimised to farmer requirements, there can be a sizeable demand for crop insurance by developing country farmers.     

Rural in-migration and agricultural development: Evidence from Zambia

While a considerable body of literature has developed in recent years around the drivers and consequences of rural out-migration in sub-Saharan Africa, relatively little work has been done to understand the impacts of migration into rural areas. We use nationally representative household survey data from Zambia to explore the relationship between rural in-migration and agricultural productivity outcomes in receiving communities. We document high levels of rural in-migration throughout Zambia—12% of rural household heads having moved from elsewhere within the previous 10 years—with two-thirds of rural in-migrants originating from other rural areas. Migrants are, on average, better endowed with capital resources than their nonmigrant neighbors and are more engaged with input and output markets. After controlling for other factors, we find that higher rates of rural in-migration are associated with greater agricultural productivity outcomes in receiving communities. These positive associations are particularly pronounced in more remote rural areas, and where in-migration originates from other rural areas. Taken together, our results suggest that rural in-migrants play an important role in the rural transformation processes underway in Zambia.     

Access to markets,weather risk,and livestock production decisions: Evidence from Ethiopia

Despite several studies showing the effect of access to markets and weather conditions on crop production, we know quite little on whether and how livestock production systems respond to variation in weather risk and access to markets. In this paper, we study whether and how livestock production responds to (access to) markets and varying weather risk. We also explore whether such responses vary across livelihood zones and livestock production systems. We study these research questions using households’ livestock production, ownership, and marketing decisions of households in Ethiopia. We find that households living close to markets are more likely to engage in market-oriented livestock production and use modern livestock inputs. We also find that households exposed to more unpredictable weather are less likely to engage in livestock production for markets, rather they are more likely to engage in livestock production for precautionary savings and insurance. Furthermore, greater rainfall uncertainty influences livestock portfolio allocation toward those which can be easily liquidated while also discouraging investment in modern livestock inputs. However, these responses and patterns vary across livelihood zones and production systems; most of these stylized responses and impacts are more pronounced and significant in the arid and semi-arid lands of Ethiopia, where livestock herding remains a dominant source of livelihood. Those households relying only on livestock production seem more sensitive and responsive to weather risk and weather shocks. The heterogeneity in responses and impacts of weather risk among farming systems and livelihoods highlights the need for more tailored livestock sector policies and interventions.     

The Labour Process in Rural Haryana (India): A Field-Report from Two Villages

Forms of labour hiring and the extent of unemployment are analysed using primary data collected from two villages in Haryana (India) during 2002–3. Data from these villages show that wage labourers, particularly women, faced extremely high levels of unemployment. Employment in agriculture was limited and new forms of labour hiring contracts had emerged under conditions of high unemployment. Earnings of manual workers were very low and gender disparities in wages very high. In one of the villages, a high concentration of landholdings and a decline in labour use facilitated the use of long-term workers. Labour relations were characterized by significant degrees of unfreedom, although the extent and nature of unfreedom varied considerably between casual and long-term workers, and between the two villages. In particular, long-term siri workers worked under conditions that were akin to bondage. It is argued that a very high degree of unemployment, combined with unequal caste and land relations and dependence on employers for credit, contributed to sustenance of unfree labour relations in rural Haryana.     

The political ecology of rice intensification in south India: Putting SRI in its places

The system of rice intensification (SRI) has been promoted across Asia as a means to improve rice yields while decreasing water use and external inputs. It is argued to be a generalisable means by which to revalidate smallholder livelihoods and improve food security across the region. Current debates about SRI, however, remain predominantly technical in scope, focusing on field‐level outcomes. To more adequately understand the potential of SRI for smallholder farmers, we argue that it is necessary to situate SRI within a political ecology framework that addresses how the adoption and practice of SRI is shaped by uneven access to key assets including labour, water, and extension networks. Fieldwork conducted in Mahabubnagar district in Telangana, south India—where SRI had been widely disadopted despite the achievement of higher yields—is used to illustrate why agronomic analysis must engage directly with the complex social contexts in which farmers operate.     

Production risk and technical inefficiency in Russian agriculture

This study investigates production risk and technical inefficiencyas two possible sources of the production variability that characterisedRussian agriculture during the last decade. The empirical analysisis conducted using panel data from 1996 to 2001 on 443 largeagricultural enterprises from three regions in central, southernand Volga Russia. A production function specification accountingfor the effect of inputs on both risk and technical inefficiencyis found to describe production technologies of Russian farmsmore appropriately than the traditional stochastic frontierformulation.     

How Productive Is Infrastructure? A New Approach and Evidence from Rural India

There have been competing arguments about the effect of public infrastructure on productivity. Level-based and debate-based regressions often lead to different estimates. To help reconcile this difference, this article applies the GMM method to first test for causality to check for length of lagged relationships and the existence of reverse causality before specifying a final model and deciding the estimation procedure. This approach is illustrated using a panel data set for India. The results show that infrastructure development in India is productive, providing supporting evidence to reverse the trend of declining investment in rural infrastructure.     

Collateral‐free lending with risk‐contingent credit for agricultural development: indemnifying loans against pulse crop price risk in India

This article addresses the problem of collateral‐free lending in the context of agricultural development. We investigate a viable alternative to traditional credit products through the development of risk‐contingent credit for operating loans and farm mortgages and apply the concept to agricultural loans for pulse crops in India. Risk‐contingent credit mitigates business and financial risk by reducing debt obligations depending on the embedded commodity options whose payoffs are linked with commodity price fluctuations. We analyze daily commodity spot prices for pulse crops in India and show how risk‐contingent structured financial instruments can be priced in practice.     

Agriculture and 'Improvement' in Early Colonial India: A Pre-History of Development

The doctrine of 'improvement' has often been identified with the introduction – and presumed failure – of the Permanent Settlement in Bengal in 1793. Although recognized as central to British agrarian policies in India, its wider impact and significance have been insufficiently explored. Aesthetic taste, moral judgement and botanical enthusiasm combined with more strictly economic criteria to give an authority to the idea of improvement that endured into the middle decades of the nineteenth century. Concern for improvement also reflected dissatisfaction with India's apparent poverty and deficient material environment; it helped stimulate data-collection and ambitious schemes of agrarian transformation. A precursor of later concepts of development, not least in its negative presumptions about India and the search for external agencies of change, improvement yet shows many of the false starts and intrinsic limitations early attempts to transform rural India entailed. This article reassesses the significance of improvement in the first half of the nineteenth century in India, especially as illustrated through contemporary travel literature and through the aims and activities of the Agricultural and Horticultural Society of India.     

The effects of agricultural policy on supply and productivity: Evidence from differential changes in distortions

Incentives in agriculture are highly distorted. It has long been argued that these distortions were a key explanation for differences in supply and productivity across countries, but the empirical evidence is limited. We revisit this issue using data on policy distortions across 63 countries for the period 1961–2011. We estimate the effects of differential changes in agricultural distortions across countries on supply and productivity. We highlight concerns in our analysis and previous work about endogeneity that biases the estimated effect downward—countries that lose comparative advantage are likely to increase support for agriculture. We address these concerns by including country and region-time fixed effects, along with a rich set of controls. Overall, we find evidence that enhanced incentives through policy changes can increase the rate of production growth, with about half of the increase due to productivity increases. This result is strongest in Sub-Saharan Africa where anti-agricultural policies on exports were reduced and in Europe where pro-agricultural policies on imports were reduced, driven largely by external pressure. Endogeneity appears to be strongest in Asia where countries have followed the typical pattern of raising support for agriculture during industrialization due to a rising farm-urban income gap.     

Rural non‐farm diversification,agricultural feminisation and women's autonomy in the farm: evidence from India

This study contributes to the literature on the interlinkage between household non‐farm diversification (HND), agricultural feminisation and female autonomy in farming. The study uses unit‐level data from the Indian Human Development Survey for the years 2004 ‐ 2005 and 2011 ‐ 2012. The paper employs instrumental variable regression methods to study such interlinkages. The results show HND to be a significant factor contributing to the feminisation of agriculture. The study finds some evidence that the phenomenon is distress driven. Further, greater participation of women in agriculture, as well as women's access to land rights, significantly contributes to female autonomy in farm decision‐making. The results are robust to the use of alternative indicators of agricultural feminisation.     

Modelling embedded risk in peasant agriculture: methodological insights from northern Malawi

Using a linear-programming model of farming systems in northern Malawi, the conditions under which peasant farm-household models may need to allow for embedded risk are investigated, Tactical, sequential responses to uncertainty are found to be more important to labour-scarce households with limited access to capital and to credit markets. Compared with semi-sequential programming, discrete stochastic programming (DSP) provided more efficient solutions for problems involving embedded risk. There may be intuitive advantages in presenting results from DSP models in terms of a semi-sequential strategy.     

Agrarian Crisis and Agrarian Questions in India

This essay reviews five recent books concerned with different aspects of the agrarian crisis and agrarian questions in India. Each book deals, implicitly or explicitly, with specific facets of these issues. Specific regional patterns of highly exploitative agrarian capitalist developments and the role of agro‐commercial capital are analysed by the books. The essay argues that the agrarian crisis is class specific and that the capitalist farming classes are, in the main, able to successfully accumulate, although uneven development across India makes generalization difficult. The review concludes with some overall perspectives on agrarian transition in India.     

Perpetuating poverty through exclusion from social programmes: lessons from Andhra Pradesh

ABSTRACT

What factors underlie the exclusion of some poor households from welfare programmes? This article analyses the question through a comparative examination of households’ demographic characteristics, social capital and communities’ spatial (dis)advantage as determinants of enrolment in three social programmes in Andhra Pradesh, India. The main findings indicate that traditionally marginalised demographic groups do not experience programme exclusion significantly more than other groups, but that households’ social-network capital and communities’ spatial advantage increase households’ programme inclusion. The importance of social capital for programme inclusion wanes, however, in spatially more advantaged communities.     

Does agricultural official development assistance facilitate foreign direct investment in agriculture: Evidence from 63 developing countries

Although past studies have separately explored the direct impact of agriculture official development assistance (ODA) and foreign development investment (FDI) on agricultural production, the nexus between these two elements is often neglected. This article aims to understand the linkage between agricultural ODA and FDI, using data from 63 developing countries from 1991 to 2019. Poisson pseudo maximum likelihood estimations reveal that agricultural ODA considerably promotes FDI in the agriculture, fishery and forestry sectors (FDI_aff) by approximately 0.5%, while its impact on FDI in the food, beverages and tobacco industries (FDI_fbt) is overall insignificant. Geographical and ecological conditions play a decisive role in accounting for FDI in agriculture. While coastal and land-rich countries receive a significantly higher amount of FDI_aff and FDI_fbt, tropical countries are evidently more attractive destinations for FDI_fbt. The empirical analysis also shows that a peaceful social environment encourages FDI_aff. Well-established legal systems and reductions in corruption facilitate FDI_aff, whereas the impact of overall institutional quality on agricultural FDI is insignificant. Results suggest that donors prioritise agricultural initiatives with higher positive spillover effects, such as programmes supporting food crop production and agricultural research.     

E-commerce and supply chain resilience during COVID-19: Evidence from agricultural input e-stores in China

COVID-19 has caused major disruptions to agricultural supply chains around the world. Researchers and policy-makers are interested in identifying means to reduce the disruptive effects caused by the pandemic. We investigate the impacts of COVID-19 on the operation of e-commerce stores (in short, e-stores) specialising in agricultural inputs. The difference-in-differences method (DID) is employed to estimate the causal relationship between COVID-19 and online sales of agricultural inputs using data from 54,244 agricultural input e-stores registered in 118 prefecture-level cities across 15 provinces and hosted on two major Chinese e-commerce platforms. The results show that COVID-19 led to a substantial growth in monthly sales of agricultural input e-stores, and this growth of online sales varied across store scales and by types of agricultural inputs. In particular, e-stores selling seeds and seedlings experienced a larger growth in sales than stores selling agricultural machinery and implements, and the mid- and larger-scaled e-stores experienced more growth of sales than micro- and small-scaled e-stores. Further analysis reveals that the growth of online sales of agricultural inputs was driven mainly by an increase in the quantity of customer orders (QCO). The findings of this paper underscore the importance of e-commerce in ensuring the resilience of the agricultural supply chain during the pandemic period.     

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.     

Government Spending, Growth and Poverty in Rural India

Using state-level data for 1970–93, a simultaneous equation model was developed to estimate the direct and indirect effects of different types of government expenditure on rural poverty and productivity growth in India. The results show that in order to reduce rural poverty, the Indian government should give highest priority to additional investments in rural roads and agricultural research. These types of investment not only have much larger poverty impacts per rupee spent than any other government investment, but also generate higher productivity growth. Apart from government spending on education, which has the third largest marginal impact on rural poverty and productivity growth, other investments (including irrigation, soil and water conservation, health, and rural and community development) have only modest impacts on growth and poverty per additional rupee spent.