Estimating labor supply of farm households under nonseparability: empirical evidence from Nepal

This paper examines the labor supply of farm households in Nepal using a recently developed methodology that accounts for the simultaneity between production and consumption decisions of the households. Estimates of marginal products of male and female labor or shadow wages are obtained from an agricultural production function. An instrumental variable approach is then used to recover the household's structural labor supply from variations in the shadow wages and income, as well as other household characteristics. The findings reveal that both male and female total labor supply are sensitive to changes in shadow wages and income. Human capital embodied in education is found to exert a significant positive effect on output, but has no statistically significant impact on total labor supply of individuals. The results also rejects the existence of efficient labor markets in rural Nepal.     

Efficiency and equity of rural land markets and the impact on income: Evidence in Kenya and Uganda from 2003 to 2015

This study examines the evolution of land sales and rental markets and their impact on agricultural efficiency in rural Kenya and Uganda using panel data spanning over 10 years. Both countries show that land markets induce efficiency by transferring land to households with higher farming ability. In both countries, land markets enhance equity by transferring land from land-abundant to land-constrained households. Although renting in land increases crop income in Kenya, we find no evidence that it enables households to escape from poverty. In contrast, increase in owned land helped decrease poverty in Uganda. Parcel-level analysis reveals that rented-in land and owned land differ in productivity levels and crop choice. These findings point to the potential weaknesses in the land markets in Kenya and Uganda that impede their ability to contribute to poverty alleviation.     

Diet diversity,malnutrition and health: Evidence from Kenya

We investigate the effects of diet diversity on health outcomes indicated by the body-mass index (BMI) of Kenyan women in their reproductive age (15–49 years). We estimate the demand for diet diversity (which is a proxy for diet quality) and analyse its relationship with BMI by allowing the effect of diet diversity to vary along the conditional BMI distribution. Results show that diet diversity is associated with a beneficial effect on the lower and upper tails of the BMI distribution, that is, dietary diversity improves BMI for underweight individuals while, at the same time, it reduces BMI for overweight/obese individuals. Specifically, doubling the diet diversity is associated with a 14.7% increase in BMI for underweight women and a 7.0% reduction in BMI of obese women. These results support the hypothesis that diet diversity is associated with optimal BMI and, thus, better health, contributing to the policy discourse concerning the double burden of malnutrition in developing countries.     

Modeling the Effects of Input Market Reforms on Fertiliser Demand and Maize Production: A Case Study from Kenya

Kenya is one of the few countries in Sub‐Saharan Africa to experience an impressive rise in fertiliser use following a series of input market reforms in the early 1990s. Two major consequences of these reforms were declining fertiliser marketing margins and distances between farmers and fertiliser dealers. We quantify the effects of these changes on commercial fertiliser use and maize production in Kenya by estimating fertiliser demand and maize supply response functions using nationwide household survey data. Our results indicate that between 1997 and 2010, the estimated 27% reduction in real fertiliser prices that can be attributed to falling marketing margins associated with market reforms led to a 36% increase in nitrogen use on maize fields and a 9% increase in maize production resulting from both yield and acreage effects. On the other hand, decreasing distances to fertiliser retailers from the perspective of a given household did not appear to raise fertiliser use or maize supply, although a comparison across households using average distances over the panel indicate that those closer to retailers do apply more fertiliser on their maize fields.     

Farmer participation in a climate-smart future: Evidence from the Kenya Agricultural Carbon Project

Smallholder agricultural carbon market projects have potential to achieve climate-smart agriculture (CSA), a “triple-win” for food security, climate change mitigation, and adaptation. Farmer participation is critical for achieving widespread impact, yet their adoption of sustainable land management practices is constrained by eligibility, willingness, and ability to participate. This research examines how the Kenya Agricultural Carbon Project enabled smallholder participation, with results emphasizing the importance of institutional conditions and farmers’ perceptions. Findings highlight the necessity of international collaborations and high levels of synergistic coordination. Building social capital and adopting participatory learning approaches are strategies that can increase participation and create inclusive climate-smart agriculture projects.     

Off‐farm Employment and Input Intensification among Smallholder Maize Farmers in Kenya

We derive input demand functions for fertiliser and hybrid seed, testing for the combined and separate effects of income from non‐farm sources and agricultural wage labour among smallholder maize farmers in Kenya. More income from off‐farm sources, and specifically non‐farm sources, competes with maize intensification, particularly in more productive areas where use rates are higher. In less productive areas, where households rely more on off‐farm income and input use in maize is extremely low, agricultural wage labour reduces the likelihood that fertiliser is applied, but when used, has a positive effect on quantities purchased of both seed and fertiliser.     

Factors affecting farm growth intentions of family farms in mountain regions: Empirical evidence for Central Switzerland

Family farms in mountain regions are undergoing a progressive structural change and an ongoing shift in the allocation of production factors land, capital and labor. In Switzerland, various policy measures influence the re-allocation of these production factors. To understand the effectiveness of these schemes and to assess future farm structural change, it is useful to analyze the underlying drivers which support and hinder the emergence of individual farm growth strategies. We study the family farms’ growth intentions using a logistic regression model based on a combination of census and survey data on family characteristics from two mountain case study regions in Central Switzerland. Factors supporting farm growth intentions are the relative change in farm size in recent years, farm related sunk costs, farm diversification and farm size. We found no support for the hypothesis that farm growth intention is also influenced by the perceived personal situation represented by indicators for the perceived workload, psychological stress and financial problems. In addition, off-farm labor did not prevent farmers from stating growth intentions. Our empirical findings suggest that (i) the most important factors which support farm growth intentions correspond with factors driving observed patterns of structural change; (ii) limited availability of family labor may result in a new critical threshold for farm growth strategies; (iii) aims and non-pecuniary preferences of farmers will impede a rapid structural change in the near future.     

The impacts of information on returns from farming: evidence from a nationally representative farm survey in India

Using a nationally representative sample of farm households from India, this paper examines the impact of use of information on net farm incomes. Employing methodologies that mitigate potential biases in the estimation of the impact, the empirical results show that farmers who use information realize over 12% higher net returns per hectare. The paper also establishes a pecking order in access to information. Small farmers and those at the bottom of social hierarchy (based on caste) have access to fewer information sources, and they depend more on informal social networks and input dealers for their information needs. The larger farmers and those from upper caste rely relatively more on sources such as radio, television and newspaper.     

The role of macro-economic indicators in explaining direct commercial real estate returns: evidence from South Africa

This study investigates the role of macro-economic indicators in explaining direct real estate returns in South Africa (SA). Literature review is conducted to identify factors that drive direct commercial real returns and the identified drivers are tested in an emerging market. The study applies SA annual commercial real estate returns including total returns, rental growth and capital growth published by the Investment Property Databank (IPD) over the past 20 years, from 1995 to 2014, as an independent variable. The most dominant and significant factors that explain total returns across all property types and provinces in South Africa are GDP, unemployment rates and interest rates which are macro-economic indicators. Our study finds key differences between the determinants of total return and change in capital values which are different from the variables which determine rental growth – the results also highlight the heterogeneity and complexity of real estate returns. These results are important for asset managers as well as government regulatory agencies to make better informed decisions in relation to factors which affect direct real estate returns in an emerging economy.     

Matching new entrants and retiring farmers through farm joint ventures: Insights from the Fresh Start Initiative in Cornwall,UK

Concerns about the sustainability of an ageing farming population have brought interest in so called entry-exit issues in policy circles. Policy interventions to date have offered limited scope in stimulating farm transfer in UK, however, the increase in unconventional tenures which include partnerships, share farming and contract farming (collectively called joint ventures) would appear to offer new opportunities for those wishing to enter or leave farming. In recognition of this the Fresh Start initiative in Cornwall set up a matchmaking element with the aim of identifying and facilitating potential joint ventures agreements between new entrants and older farmers. The emphasis was on setting up long-term arrangements that would enable the new entrant to ‘buy into’ an existing farm business, gradually taking over managerial control. This paper examines the processes of matching partners for the possible formation of farm joint ventures, using qualitative data derived from interviews with the participants, deliverers and stakeholders involved in the matchmaking element of this initiative. The results reveal that there is a deep rooted reluctance amongst participants in the initiative to enter formal long term joint ventures due to differing motivations, expectations, and concerns about their respective responsibilities in the working relationship and about the validity of the legal framework. Only where a relationship had already been informally established was there a commitment to formalise a joint venture agreement. Future emphasis in policy should therefore be on helping to facilitate and formalise existing partnerships, rather than trying to artificially orchestrate matches where the parties do not know each other.     

Improving the speed of adoption of agricultural technologies and farm performance through farmer groups: evidence from the Great Lakes region of Africa

The article examines the effect of membership in farmer groups (MFG) on adoption lag of agricultural technologies and farm performance in Burundi, the Democratic Republic of Congo and Rwanda. We use duration and stochastic production frontier models on farm household data. We find that the longer the duration of MFG, the shorter the adoption lag and much more so if combined with extension service delivery. Farmer groups function as an important mechanism for improving farm productivity through reduced technical inefficiency in input use. We discuss policy implications under which farmer groups are a useful channel to reduce adoption lag, and the means through which improved farm performance can be achieved.     

Migration and farm technical efficiency: evidence from Kosovo

This article investigates the effect of migration on farm technical efficiency drawing on a large and representative sample of agricultural households in Kosovo. A two‐stage estimation procedure is applied: a frontier technique to estimate the effect of migration on farm efficiency, followed by a propensity score based matching approach to robustly estimate the sample average effect on efficiency for different levels of migration intensity. Migration is found to have an efficiency decreasing effect, which is amplified for better educated workers. The observed negative effect of migration on efficiency is evident even at low levels of migration intensity.     

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.     

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.     

Market imperfections,liquidity, and farm household labor allocation: the case of rural South Africa

Asset endowments and market imperfections shape households’ labor allocation decisions and lead to different production regimes within rural farm households in South Africa. This article uses a farm household model to explain the presence of three main household groups determined on the basis of the labor regime adopted: small peasants (working both on and off farm), self‐cultivators (autarkic in labor) and hiring‐in households. A partial generalized ordered logit is used to test the main predictions of the model and a Brant test on threshold constancy is performed to identify the household‐specific factors affecting labor market participation. The results show that liquidity constraints and market imperfections matter in the choice of the labor strategy adopted. Liquidity‐constrained households are more likely to sell labor off farm while access to information facilitates the hiring in of workers.     

Farm succession,occupational choice and farm adaptation at the rural-urban interface: The case of Italian horticultural farms

The survival of family farming in Europe is a crucial issue, as it assures landscape maintenance in marginal areas and provides transmission and accumulation of site-specific knowledge in agricultural activity. Using data from a sample of Italian horticultural farms, we explored the multiple forces driving farm succession in a high value added sector. In addition to the traditional factors examined in the literature (farm, farmer and family features), we treated the farm transfer choice as the complement of the decision to migrate out of the agricultural sector, testing the effects of local labour market conditions (employment, income gap between farm and non-farm sector) and population density around the farm, as a proxy of rural-urban interface relationships. It has been shown that both traditional factors and territorial and labour market conditions influence the probability of farm succession. Interestingly labour market conditions exerted an effect in line with occupational choice theory only in less inhabited areas; in more densely populated regions a rural-urban linkage effect seems to prevail, creating an environment that fosters succession of young horticultural farmers. Peri-urban areas may thus be a favourable location for professional and specialised horticultural farms, as well as multifunctional and de-specialised ones, if their assets are properly protected against farmland subtraction. More generally, these findings confirm the validity of a more comprehensive approach toward farm succession, which takes occupational choice theory and rural-urban farm adaptation strategies into account.     

Credit constraints and smallholder dairy production in the East African highlands: application of a switching regression model

Accurate assessment of farmers' credit constraint condition is important in order to understand the circumstances under which credit would have its greatest impact. In this study a switching regression model was used to determine the impact of credit on smallholder dairy farms in the East African highlands using farm level data from Ethiopia and Kenya. Farmers were classified as credit constrained or credit non-constrained based on their responses from the farm level surveys. No consistent relationship was found between farmers' credit constraint condition and their borrowing status. Most of the variation in milk output per farm was explained by the number of crossbred milking cows in the dairy herd. As credit is likely to facilitate investment in crossbred dairy cows it will have substantial impacts on smallholder dairy farms especially if it is targeted to credit constrained farms.     

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity‐enhancing technologies and, where possible, to allocate excess land to lease markets.     

EU Food Safety Standards,Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm‐level productivity among small‐scale vegetable producers in Kenya. We apply an extended three‐stage damage control production framework, accounting for multiple endogeneity problems, to farm‐level data collected from a random cross‐sectional sample of 539 small‐scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export‐oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third‐stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a ‘per acre’ basis. Although standards can potentially prevent resource‐poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small‐scale farmers who adopt it, as shown by these results.     

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.