Introduction to the Special Feature: Evaluating the Impact of Agricultural Projects in Developing Countries

This article provides an introduction to the special feature on impact evaluation of agricultural projects in developing countries. The special feature is motivated by an increased interest in impact evaluation both within the economics profession and the development community. The article highlights methodological issues in conducting such evaluations and discusses the current literature that empirically assesses the effectiveness of agricultural projects. A synthesis of the articles presented in the special feature and their contribution to the literature are noted as well as conclusions on the next steps in evaluating agricultural projects in developing countries.     

The Economic impact of public agricultural research and development in the United States

In this article, we examine the relationship between public investments in agricultural research and development and the productivity‐enhancing benefits they generate. Knowledge productivity functions are estimated for U.S. agriculture using data on multifactor productivity and public knowledge stocks. We examine the time‐series properties of the data and compare alternative econometric estimation procedures. The results are used to calculate economic performance measures such as internal rates of return and benefit‐cost ratios. The real rate of return to public investments in agricultural research and development in the United States is in the range of 8–10% per annum.     

Returns to spending on agricultural extension: the case of the National Agricultural Advisory Services (NAADS) program of Uganda†

The aim of this paper is to assess the direct and indirect impacts of the agricultural extension system of Uganda, the National Agricultural Advisory Services (NAADS) program, on household agricultural income. Data from two rounds of surveys of Ugandan rural farm‐households conducted in 2004 and 2007, as well as different program evaluation methods and model specifications, are used to estimate impacts and compute a rate of return. The direct and indirect impact of the program is estimated at 37–95% and 27–55% increase in per capita agricultural gross revenue between 2004 and 2007 for households participating directly and indirectly in the program, respectively, compared to nonparticipants. The rate of return on the program's expenditures is estimated at 8–49%. The program has been relatively more effective among male‐headed, larger, and asset‐poor households, as well as those taking up noncrop high‐value enterprises and living further away from financial services, all‐weather roads, and markets or located in the Eastern and Northern Regions. Policy implications of the results are drawn.     

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.     

The role of certificate issuer on consumers’ willingness‐to‐pay for milk traceability in China

In response to increasing concerns about domestic food safety issues, establishing tracking systems in the food industry is mandatorily required under newly launched food safety laws. However, the kinds of monitoring and certification systems that should be set up to ensure practical adoption and the effectiveness of the regulation remain unclear. This study aims to analyze consumers’ preferences for milk traceability, with particular interest in investigating how consumers’ preferences could be affected by monitoring and certification systems of the regarding system. Survey data from a choice‐based conjoint (CBC) experiment are used to achieve this objective. In the experiment, milk is defined by a set of attributes in which we assume that milk traceability can be certified by three entities: the government, an industrial association, and a third party. The CBC data are then analyzed by using the alternative‐specific form of a conditional Logit (McFadden's Choice) model. We found that urban Chinese consumers have a strong desire for traceable milk, but their preference for traceable milk is significantly related to the associated certificate issuers. Currently, the highest willingness‐to‐pay goes to government certificated traceable milk, followed by industrial association certificated and third‐party certificated milks. In the future, however, consumers are likely to give more credit to third‐party certification with rising income and knowledge.     

Impacts of Vessel Capacity Reduction Programmes on Efficiency in Fisheries: the Case of Australia’s Multispecies Northern Prawn Fishery

Capacity reduction programmes, in the form of buybacks or decommissioning, have had relatively widespread application in fisheries in the US, Europe and Australia. A common criticism of such programmes is that they remove the least efficient vessels first, resulting in an increase in average efficiency of the remaining fleet, which tends to increase the effective fishing power of the remaining fleet. In this paper, the effects of a buyback programme on average technical efficiency in Australia’s Northern Prawn Fishery are examined using a multi‐output production function approach with an explicit inefficiency model. As expected, the results indicate that average efficiency of the remaining vessels was generally greater than that of the removed vessels. Further, there was some evidence of an increase in average scale efficiency in the fleet as the remaining vessels were closer, on average, to the optimal scale. Key factors affecting technical efficiency included company structure and the number of vessels fishing. In regard to fleet size, our model suggests positive externalities associated with more boats fishing at any point in time (due to information sharing and reduced search costs), but also negative externalities due to crowding, with the latter effect dominating the former. Hence, the buyback resulted in a net increase in the individual efficiency of the remaining vessels due to reduced crowding, as well as raising average efficiency through removal of less efficient vessels.     

The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata

The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.     

Yield Effects of Tissue Culture Bananas in Kenya: Accounting for Selection Bias and the Role of Complementary Inputs

We analyse yield effects of tissue culture (TC) banana technology in the Kenyan small farm sector, using recent survey data and an endogenous switching regression approach. TC banana plantlets, which are free from pests and diseases, have been introduced in East Africa since the late 1990s. Although field experiments show significant yield advantages over traditional banana suckers, a rigorous assessment of impacts in farmers’ fields is still outstanding. A comparison of mean yield levels between TC adopters and non‐adopters in our sample shows no significant difference. However, we find evidence of negative selection bias, indicating that farmers with lower than average yields are more likely to adopt TC. Controlling for this bias results in a positive and significant TC net yield gain of 7%. We also find that TC technology is more knowledge intensive and more responsive to irrigation than traditional bananas. Simulations show that improving access to irrigation could lift TC productivity gains to above 20%. The analytical approach developed and applied here and the finding of negative selection bias may also be relevant for the evaluation of other agricultural technologies.     

The Impact of Direct Income Transfers of CAP on Greek Olive Farms’ Performance: Using a Non‐Monotonic Inefficiency Effects Model

We analyse the impacts of direct income transfers on the technical efficiency of Greek olive farms. We use a production frontier function and a non‐monotonic inefficiency effects model, which incorporates the influences of exogenous variables (subsidies, farm characteristics, etc.) on technical efficiency. The model is applied to 1995–2004 FADN data. The results show that direct transfers of the CAP had a negative and monotonic effect on technical efficiency, whereas the degree of specialisation had a non‐monotonic effect on technical efficiency.     

Assessing the Impacts of Pillar 1 and 2 Subsidies on TFP in French Crop Farms

This article analyses the impact of common agricultural policy (CAP) subsidies on total factor productivity using a FADN dataset of French crop farms between 1996 and 2003. We first estimate a production function using a system GMM approach and then recover farm‐level total factor productivity (TFP). Further, the impact of Pillar 1 and 2 subsidies on TFP is investigated and results show that several subsidies have a negative impact on productivity during the period covered in the dataset. CAP reforms have also had an impact on the relationship between subsidies and productivity.     

The influence of direct payments on farmers’ hail insurance decisions

We analyze determinants of hail insurance use of Swiss farmers, using FADN panel data covering the period 1990–2009. Mixed effect logistic regression models are estimated to identify the most important farm and farmer characteristics that trigger insurance use. In addition, information on local hail risk is taken into account in these models. It shows that larger farms, with specialization in crop production, and with larger local hail risks are more likely to adopt the hail insurance. Moreover, insurance users are usually older and better educated. Since the early 1990s, Swiss agricultural policy has reduced price support and introduced general and ecological direct payments. This has led to a much higher importance of direct payments for farmers’ incomes. Our analysis shows that this development has contributed to decreasing hail insurance adoption rates in Switzerland over the period considered. Our results indicate that the larger the share of direct payments for total farm revenue, the less attractive is insurance as a risk management strategy for farmers. This interdependency should be explicitly considered by agricultural policy in the design of support mechanisms.     

Impact of training on the intensification of rice farming: evidence from rainfed areas in Tanzania

Agricultural development is indispensable for poverty reduction and food security in sub‐Saharan Africa (SSA). This study investigates the impact of rice production training in a modified version of the System of Rice Intensification (SRI) on the performance of small‐scale rice farmers in a rainfed area of Tanzania. Utilizing the plot level variation, we employ propensity score matching (PSM) to assess the impact of training on technology adoption, productivity, and profitability. We also estimate a difference‐in‐differences model with plot fixed effects using recall panel data covering the periods before and after training. We found that trainees achieved an average paddy yield of 4.7 tons per hectare and rice profit of 191.5 USD per hectare on the plots where new technologies were adopted, which is higher by about 1.3–1.8 tons and 119–137 USD per hectare than on the other plots. Our study suggests the high potential of transforming favorable rainfed rice growing areas in SSA so as to achieve a rice Green Revolution through training in modern input use and improved agronomic practices.     

The primacy of human capital and social capital in influencing landholders’ participation in programmes designed to improve environmental outcomes*

Increasing landholder participation in environmental programmes is often essential for achieving desired levels of restoration and protection, as well as the economic goals of efficiency and equity. Previous literature has identified sociodemographic property and attitudinal variables that influence participation. Using qualitative research, we identify variables relating to human capital (business orientation and information seeking behaviour) and social capital (trust in those delivering programmes and connectedness with other landholders) that have been seldom or never identified as influencing participation. New scales are developed and existing scales refined for measuring these constructs, and their influence on past and future participation is examined together with a range of other constructs. The effect of these variables is examined using a survey of Australian landholders, and the results demonstrate the primacy of variables relating to human and social capital in influencing past and future participation.     

Effects of microcredit and other loans on female empowerment in Bangladesh: the borrower's gender influences intra‐household resource allocation

This article examines microcredit's effectiveness in empowering women borrowers in rural Bangladesh. It does so by examining how gender‐specific borrowing activities influence household expenditures which are either specifically of interest to men or women, and by examining the effects of all loans rather than only those provided by microcredit organizations. The article uses a quasi‐experimental design to identify the effects of borrowing by men and women by using an original combination of panel data and instrumental variables on subsamples of the surveyed population. It finds that the borrower's gender affects how households allocate their resources to different expenditure items and assets that are valued differently by men and women. In all, the findings suggest that providing greater credit access to women may improve their household bargaining positions.     

The impact of the use of new technologies on farmers’ wheat yield in Ethiopia: evidence from a randomized control trial

In 2013, Ethiopia's Agricultural Transformation Agency introduced the Wheat Initiative to increase smallholder productivity. In this article, we measure the impacts of the Wheat Initiative package of technologies, and its marketing assistance component alone, on yields among a promotional group of farmers. The package includes improved techniques, improved inputs, and a guaranteed market for the crop. Relying on crop‐cut measures and farmers’ own assessments, we find that full package led to an average 14% higher yields. Implementation of the Wheat Initiative was successful in making certified seed and fertilizer accessible to farmers and increasing their uptake, though only 61% of the intervention group adopted row planting and few farmers received marketing assistance. The measured yield difference may underestimate the true yield difference associated with the technology because of incomplete adoption of the recommended practices by intervention farmers and adoption of some practices by control farmers.     

The genetic and economic impact of the CIMMYT wheat breeding program on local producers in the Yaqui Valley,Sonora Mexico

This article quantifies the productivity gain from CIMMYT‐released semidwarf bread wheat (Triticum aestivum) cultivars over time, using test plot data from Mexico's Yaqui Valley. Previous studies have shown a deceleration in irrigated wheat yield growth since the 1980s, which could be due to slowing increase in genetic potential. Our results suggest that CIMMYT cultivars contributed a 0.46% annual increase (about 38 kg/ha annually) to wheat yields in the Yaqui Valley, which raised local wheat producers’ revenue by an average of $4 million annually for the period 1990 to 2002, and by approximately $9 million in 2002.     

Consumer Acceptance of Second‐Generation GM Foods: The Case of Biofortified Cassava in the North‐east of Brazil

Biofortified staple foods are currently being developed to reduce problems of micronutrient malnutrition among the poor. This partly involves use of genetic modification. Yet, relatively little is known about consumer acceptance of such second‐generation genetically modified (GM) foods in developing countries. Here, we analyse consumer attitudes towards provitamin A GM cassava in the north‐east of Brazil. Based on stated preference data, mean willingness to pay is estimated at 60–70% above market prices for traditional cassava. This is higher than the results from similar studies in developed countries, which is plausible given that micronutrient malnutrition is more severe in developing countries. GM foods with enhanced nutritive attributes seem to be well received by poor consumers. However, the results also suggest that acceptance would be still higher if provitamin A were introduced to cassava through conventional breeding. Some policy implications are discussed.     

The impact of the 2005–2010 rice price increase on consumption in rural Bangladesh

This article studies the impact of the rice price increase between 2005 and 2010 on consumption in rural Bangladesh. Using the Household Income and Expenditure Survey (HIES) data, we compare net rice buyers and sellers to self‐sufficient households. To identify the effect of rice price changes on household consumption of rice, nonrice food and nonfood items, we employ a difference‐in‐differences (DiD) technique. Our findings indicate that the surge in domestic rice prices between 2005 and 2010 reduced the nonrice food consumption of net rice buyer households by 7%, compared to the households who are self‐sufficient in rice production. However, it did neither affect their rice nor their nonfood consumption. In contrast, while we find no significant effect of rice price increases on the rice consumption of net rice sellers, we observe a 9% increase in their nonrice food consumption. In such situation, a subsidy on low‐quality rice may be effective in fulfilling the nutritional requirement of low‐income households.     

The impact of agricultural policy on farm income concentration: the case of regional implementation of the CAP direct payments in Italy

One of the objectives of agricultural policy worldwide concerns the support of farm income. Common Agricultural Policy direct payments (DPs) are the main instruments to support farm income in the European Union. This article addresses their role in the concentration of farm income. This is done by calculating the Gini coefficient and its disaggregation in a large sample of Italian farms in the period between 2006 and 2007. Although this approach has been used to develop ex‐post analysis in previous studies, this article is innovative given that it is used here in an ex ante analysis aimed at evaluating the likely impact of a recent reform proposal. This latter requests changing the current model to a regional model of DPs application to make payment rates (i.e., payment per hectare) homogeneous among farms in the same region. The analysis shows that DPs and farm incomes are both very concentrated but that DPs allow for an income concentration reduction in Italian farms. The shift to a regional implementation reduces DPs concentration and, to a limited extent, farm income concentration. Of the considered regionalization scenarios, those that redistribute DPs among regions are the most effective in reducing concentration. The extension of the Gini considered approach to an ex ante setting seems effective because it provides insights that could feed the policy debate regarding the forthcoming reform.     

Impact of off‐farm income on food expenditures in rural Bangladesh: an unconditional quantile regression approach

This study examines the effects of off‐farm income on food expenditures of rural Bangladeshi households. Our analysis yields unbiased estimates of the unconditional impact of off‐farm income on food expenditures and reveals the heterogeneous effects that occur across the distribution of total food consumption expenditures. The findings suggest that the impacts of off‐farm income are uniformly positive across the unconditional quantile regression and significantly increase food consumption expenditures for all quantiles, except for the 25th quantile. In addition, we found that schooling, experience, and location of the household increase the food expenditures of rural households. Most importantly, this article argues that female‐headed rural households in which the female works off the farm tend to have significantly lower food expenditures.