How do informal farmland rental markets affect smallholders’ well‐being? Evidence from a matched tenant–landlord survey in Malawi

We estimate the efficiency and equity returns to farmland rental markets in Malawi using a matched tenant–landlord survey of smallholder farm households in four districts. Our sample allows us to more fully observe the landlord side of the rental market, which is almost always missing in previous studies. Our results suggest that land rental markets promote efficiency by facilitating a net transfer of land to more productive farmers. We also find that land rental markets promote equity as conventionally defined in the land markets literature, that is, by transferring land from land‐rich households to land‐poor households, and from labor‐poor to labor‐rich households. However, our study identifies some important challenges for land rental markets in this context. First, we find that tenants in our sample are wealthier than their landlord counterpart on average in all dimensions other than landholding. In addition, most landlords report the motive for renting out their land as either the need for immediate cash, or the lack of labor and/or capital to cultivate the plot that was rented out. These findings align with concerns about potential “stress renting” by poor landlords and suggest the value of defining equity along a broader set of dimensions other than simply equalizing the distribution of farmland and labor.     

Rural nonfarm activities and agricultural crop production in Nigeria

Although most rural households are involved in the farm sector, the nonfarm sector has grown significantly in recent decades, and its role in rural development has become increasingly important. This article examines the effect of participation in nonfarm activities on crop expenses of farm households in Nigeria. The relationship is modeled using a nonseparable agricultural household model that suggests that participating in nonfarm activities can relax the credit constraints facing farm households and reduce risk thereby helping households improve farm production and smooth consumption over time. The results show that participation in nonfarm activities by Nigerian farmers has a positive and significant effect on crop expenses and in particular on payments for hired labor and inorganic fertilizers. Separate analysis of the six geopolitical zones in Nigeria indicates that it is in the South-South and South-East zones where nonfarm participation appears to induce more hiring of labor. The results support the hypothesis that nonfarm participation helps relax liquidity constraints but suggests how that liquidity is used is zone-specific. In general, the results also indicate that liquidity is used more to pay for inputs into staple production as opposed to cash crops.     

How has microcredit supported agriculture? Evidence using panel data from Bangladesh

Improving agricultural productivity has received a greater attention in recent years amid concerns about rising food insecurity, population pressures, and climate change. Many believe that better access to institutional credit, spanning microcredit as well as commercial and agricultural banks, can help rural households smooth risks, and access inputs and other technology to modernize agriculture and improve farm/nonfarm linkages. We use recently augmented household panel data spanning over 20 years in Bangladesh to examine the effects of rural credit expansion (both microcredit and formal bank channels) on outcomes for agricultural households. We find that microcredit has benefited households with lower landownings, raising agricultural income from activities such as livestock rearing that require less land, as well as nonfarm income diversification for all households, but with the strongest effect for landless or near‐landless households. We do not find effects of microcredit on crop income, but do, however, find that reported supply‐side credit constraints significantly lower crop income. Borrowing by both men and women has contributed to nonfarm income growth for marginal farmers, but only men's borrowing has contributed to nonfarm income growth among higher landowning groups.     

The impact of migration on rural poverty and inequality: a case study in China

Large numbers of agricultural labor moved from the countryside to cities after the economic reforms in China. Migration and remittances play an important role in transforming the structure of rural household income. This article examines the impact of rural‐to‐urban migration on rural poverty and inequality in a mountainous area of Hubei province using the data of a 2002 household survey. Since migration income is a potential substitute for farm income, we present counterfactual scenarios of what rural income, poverty, and inequality would have been in the absence of migration. Our results show that, by providing alternatives to households with lower marginal labor productivity in agriculture, migration leads to an increase in rural income. In contrast to many studies that suggest that the increasing share of nonfarm income in total income widens inequality, this article offers support for the hypothesis that migration tends to have egalitarian effects on rural income for three reasons: (1) migration is rational self‐selection—farmers with higher expected return in agricultural activities and/or in local nonfarm activities choose to remain in the countryside while those with higher expected return in urban nonfarm sectors migrate; (2) households facing binding constraints of land supply are more likely to migrate; (3) poorer households benefit disproportionately from migration.     

Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004

We analyze five rounds of National Sample Survey data covering 1983, 1987/1988, 1993/1994, 1999/2000, and 2004/2005 to explore the relationship between rural diversification and poverty. Poverty in rural India has declined at a modest rate during this time period. We provide region-level estimates that illustrate considerable geographic heterogeneity in this progress. Poverty estimates correlate well with region-level NSS data on changes in agricultural wage rates. Agricultural labor remains the preserve of the uneducated and also to a large extent of the scheduled castes and scheduled tribes. We show that while agricultural labor grew as a share of total economic activity over the first four rounds, it had fallen back to the levels observed at the beginning of our survey period by 2004. This all-India trajectory also masks widely varying trends across states. During this period, the rural nonfarm sector has grown modestly, mainly between the last two survey rounds. Regular nonfarm employment remains largely associated with education levels and social status that are rare among the poor. However, casual labor and self-employment in the nonfarm sector reveals greater involvement by disadvantaged groups in 2004 than in the preceding rounds. The implication of this for poverty is not immediately clear—the poor may be pushed into low-return casual nonfarm activities due to lack of opportunities in the agricultural sector rather than being pulled by high returns offered by the nonfarm sector. Econometric estimates reveal that expansion of the nonfarm sector is associated with falling poverty via two routes: a direct impact on poverty that is likely due to a pro-poor marginal incidence of nonfarm employment expansion; and an indirect impact attributable to the positive effect of nonfarm employment growth on agricultural wages. The analysis also confirms the important contribution to rural poverty reduction from agricultural productivity, availability of land, and consumption levels in proximate urban areas.     

Rural nonfarm income and its impact on agriculture: evidence from Albania

Using data from the 2005 Albania Living Standards Measurement Study (ALSMS05) survey, this article analyzes the overall impact of household nonfarm income-generating activities (RIGA) on agricultural expenditures as well as technical efficiency of rural farm households. We also differentiate the impact for subsistence and commercial farmers, who are in the top 25% of the distribution of value of annual agricultural sales. Our results show that on the whole, Albanian rural households utilize their nonfarm earnings not to invest in time-saving, efficiency-increasing technologies, but to move out of crop production. We derive similar findings when we try to estimate the same relation separately for commercial and subsistence farmers. However, for commercial farmers, we find a positive impact of household nonfarm earnings on livestock expenditures.     

The role of nonfarm income in coping with the effects of drought in southern Mozambique

To reduce their dependence on subsistence agriculture, farm households in rural Africa may diversify their income sources by participating in the nonfarm sector. In years of drought, nonfarm income can also be part of the coping strategies. A multivariate sample selection model was used to analyze three years of data from a nationally representative household survey in Mozambique. The analysis was guided by the following three questions. During a drought year: (1) Do households increase their participation in nonfarm activities? (2) Are poorer households as likely as others to participate in and benefit from nonfarm activities? and (3) Which factors are associated with higher nonfarm incomes? The results suggest that households are more likely to engage in at least one nonfarm income‐generating activity during a drought year. Although poorer households are more likely to engage in nonfarm activities, they are less likely to participate in nonfarm activities of high return. The results suggest that policies reducing entry barriers (e.g., improved road infrastructure, micro‐credit schemes, and livestock promotion programs) and increasing education levels can facilitate income diversification, thus allowing rural households to better cope with the effects of drought. When designing polices, care must be taken to avoid exacerbating income inequality by targeting measures toward poorer and female‐headed households.     

Cash crop choice and income dynamics in rural areas: evidence for post‐crisis Indonesia

In this article we investigate the factors affecting levels and growth of incomes in rural Indonesia following the crisis of 1997–1998. In particular, we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics. Framing the article in the context of an optimal labor allocation model, relying on unique household panel data from Central Sulawesi, and using advanced panel econometric methods, we find that local innovations related to the adoption and intensification of new cash crop varieties, more specifically the shift from coffee to cocoa production, can explain a substantial part of the observed post‐crisis developments. Causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14% higher income levels during the post‐crisis period compared to the planting of other crops, most notably coffee. Also, our results demonstrate the importance of engagement in nonfarm activities for household income growth. Comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of Indonesia.     

杭州、绍兴农户劳动力流动与农户土地利用群体类型的Crosstabs分析

研究目的：根据农户转出劳动力就业形式、流动规模和农户土地利用方式分别进行农户群体类型划分,探讨农户劳动力流动和土地利用的相互关系,以期为制定农村地区发展政策提供基础研究支持。研究方法：针对杭州、绍兴农户劳动力流动的情况,选择了7个村159户农民进行实地调查,在调查的基础上,对调查数据进行统计分析。研究结果：（1）调研地区农户群体类型分划基本清晰,主要为打工主导型和转出滞留型,占调研总数的50.94%、30.80%;（2）45.68%的打工主导型农户和22.45%的转出滞留型农户将土地全部转出用于农业用途,户均转出面积分别为0.12 hm2、0.14 hm2,而32.65%的转出滞留型农户则将全部土地用于耕种粮食作物,户均种植面积为0.13 hm2;（3）各类型农户目前主要为解决家庭消费用粮而耕种土地,64.20%的农户打算今后几年继续上年的土地经营状况,有扩张经营规模的农户比例相对较低。研究结论：根据不同农户群体类型的特点制定对应性实施政策,合理引导永久迁移主导型农户家庭向城镇地区转移,关注劳动力滞留型农户的土地耕种意愿,对其他4类农户群体则制定适宜的劳动力转移和土地利用保障政策。     

非农就业对农户农地价值预期的影响研究——来自CHFS的实证分析

目的 在我国农村人口非农就业转移进程不断加深背景下,非农就业活动改变了农户家庭与农地之间的依附关系,研究非农就业活动对农户农地价值预期的影响,既有助于理解农地价值形成机理,又对推进我国农业农村现代化具有重要意义。方法 文章基于2015年中国家庭金融调查（CHFS）农户层面的微观数据,以耕地作为农地的代表,采用OLS回归模型和中介效应模型实证分析非农就业对农户农地价值预期的影响。结果 非农就业并未降低农户对农地的依赖、减少耕地要素投入,相反非农就业增强了土地替代要素的投入、激发了农户农转非的资本积累需求,从而导致农户提高了农地的价值预期。结论 （1）我国农户的非农就业转移并未完成,亟需创新和完善农村土地流转机制;（2）农地依旧是农户生存的重要保证,需积极支撑或培育专业化农业生产性服务业和智能化农业机械制造业的发展,弥补农业劳动力非农转移带来的负面效应,加快推进我国农业农村现代化。     

Farm households and nonfarm activities in Ethiopia: does clustering influence entry and exit?

This article examines how clustering affects the entry and exit decisions of farm households into and from nonfarm enterprises in rural Ethiopia. We find that the existence of clusters of microenterprises in the same district increases the likelihood of a rural household to start a nonfarm enterprise. Similarly, clustering of big manufacturing firms in the same zone is found to increase the likelihood of farm households to start a nonfarm enterprise. Nonfarm enterprises operating in clusters are also found to have a lower probability of exit than those operating outside of clusters. The study further investigates the impact of entry and exit into and from nonfarm enterprises on farm household's well‐being using as indicators total household income, the food security status of a household, and the household's ability to raise enough money in case of emergency. Using propensity score matching to account for selection bias, we find that entry into nonfarm enterprises significantly increases household's income and food security status. Exit from nonfarm enterprises, on the other hand, is found to significantly reduce household's income.     

Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach

This article explores the effects within households of an expanding rural nonfarm (RNF) sector in Ghana. We ask whether the growing RNF sector allows for economies of diversification within farms, how it affects household input demands, and whether it has measurable effects in overall household production efficiency. We explore the intrahousehold linkages between agricultural and RNF activities, first assuming perfectly competitive input and output markets and then with market failures, in particular missing labor and credit markets. We then measure these linkages using a household level input distance function, finding high levels of inefficiency in Ghanaian farms. Also, there are cost-complementarities between the RNF sector and the agricultural sector, particularly with food crops in which the poorest tend to specialize. The expansion of the RNF sector increases demand for most inputs including agricultural land. Finally, we show that smaller farms tend to be more efficient, and that RNF output is helping the farm household to become more efficient, but the latter result is not robust.     

Nonfarm employment,agricultural intensification,and productivity change: empirical findings from Uganda

This article uses panel data from the Living Standards Measurement Study‐Integrated Surveys on Agriculture for Uganda to assess the farm‐level effects of nonfarm employment on agricultural intensification and productivity change. A sample selection model is used to account for both unobserved heterogeneity and potential simultaneity between agricultural production and nonfarm income. Results show that nonfarm employment can have differential impacts on farm technology intensity and productivity. Nonfarm income is found to have a positive impact on farm hired labor and improved seed intensity; a negative effect on on‐farm family labor use; and no significant impact on fertilizer, soil water management, and joint use of farm technologies. The econometric evidence also indicates that agricultural productivity declines as nonfarm income increases. Taken together, our findings reveal important trade‐offs between nonfarm employment and income and farm productivity growth under smallholder agriculture. The results indicated that targeted policies are required to reduce these potential trade‐offs between nonfarm employment and agricultural intensification and productivity change.     

Urbanization and poverty reduction: the role of rural diversification and secondary towns1

A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania, during 1991/1994–2010 shows that about one out of two individuals/households who exited poverty did so by transitioning out of agriculture into the rural nonfarm economy or secondary towns. Only one out of seven exited poverty by migrating to the big cities, even though those moving to the city experienced on average faster consumption growth. Further analysis of a much larger cross‐country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural–urban dichotomy and focusing more instead on how best to urbanize and develop its rural nonfarm economy and secondary towns.     

Does human capital raise farm or nonfarm earning more? New insight from a rural Pakistan household panel

This study explores how human capital affects farm household earnings using two tools to refine measurement of human capital effects. First, it employs a two‐sector model to allow the allocation of family labor between farm and nonfarm activities. Second, it accounts for village fixed effects to evaluate whether results from panel data differ meaningfully from a cross‐sectional data analysis with local binary variables. The results show that education has a negligible effect on farm earnings; instead, experience appears to be the principal channel by which human capital affects agricultural performance in a traditional rural setting. Our results also suggest that prior models that fail to separate nonfarm activities spuriously exaggerated the effect of education to the farm sector. In addition, typical cross‐sectional analyses that ignore fixed effects may cause the effects of education on rural household earnings to be significantly overstated. The fact that panel data regressions accounting for village‐level fixed effects found only one instance of education raising earnings—the effect of literacy on nonfarm income—suggests that considerable heterogeneity may have been ignored in cross‐sectional data analyses, especially ones that omitted village‐level effects.     

Examining rural income and employment in Bangladesh: A case of structural changes in the rural nonfarm sector in a developing country

This study uncovers some important stylised facts about the structural changes in the rural nonfarm (RNF) economy in Bangladesh for the period 2000–2016 and identifies some broad determinants. Our work uses household-level, secondary sources such as Household Income and Expenditure Survey, Labour Force Survey and Bangladesh Integrated Household Survey. We find that the positive relationship between landownership and rural income has become weaker in recent years, indicating the increasing role of nonland inputs in generating rural income. The share of RNF income in total rural income has increased substantially over the years. The increase in nonfarm income is largely driven by the nonfarm wage income of the richer households, indicating adverse distributional consequences. There are also indications for specialisation in nonfarm activities—the share of income from the ‘mixed’ sources of farm and nonfarm has decreased, and the ‘only nonfarm’ source has increased. Households tend to move away from agriculture and specialise in RNF occupations as the education level increases. Our results offer important insights into rural development strategies and contribute to the broader questions of the development discourse on the structural changes in developing countries.     

Enhancing food security through diet quality: The role of nonfarm work in rural India

India has achieved food security at the macro level. However, at the micro level, the country still struggles with extensive problems of food nutrition insecurity. In this paper, we assess the impact of nonfarm income and nonfarm work status (casual and full-time nonfarm work) of operator, spouses, and couples on the diet quality of smallholder households in India. We find that nonfarm income decreases the likelihood of farming household being in the poor-diet quality group by 31% and the medium-diet quality group by 3%. Full-time nonfarm work by operators and spouses decreases the likelihood of farming households being in the poor-diet quality group by 3% and 9%, respectively. Finally, national programs like public food distribution programs increase the probability of rural farming households in the poor-diet quality group. Findings from this study underscore the importance of nonfarm income and full-time nonfarm work in improving diet quality of rural Indian households.     

Income Diversification of Rural Households in China

This article examines how different patterns of farm‐level diversification affect the income levels of rural households in China. Using quantile regression analysis of data from a rural household survey, the empirical results exhibit significant differences in diversification effects across rural income strata and various structural characteristics. Diversification, especially involving nonfarm employment and migration, brings a monetary premium to low‐income rural families and an income discount to high‐income families. The policy implications suggest the encouragement of labor‐intensive enterprises in rural areas and improvement of labor quality through rural education and training programs.     

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.     

A System Comparison Approach to Distinguish Two Nonseparable and Nonnested Agricultural Household Models

This study distinguishes two nonseparable agricultural household models for a self-employed farm household. One assumes heterogeneity of farm and nonfarm labor and a competitive market for nonfarm labor. The other assumes homogeneity of the two types of labor and a restricted market for nonfarm labor. We compare demand systems that are derived from them, which have different dependent variables and different numbers of equations. We apply a Cox-type test to compare these complicated nonnested systems. Results show clearly that the former is better for Japanese rice-farming households. Comparison of price elasticities for those models verifies the importance of that test.