Markets and pro-poor agricultural growth: insights from livelihood and informal rural economy models in Malawi

This article presents the development of a set of programming models describing the major features of different rural livelihoods and of the informal rural economy they together make up in Malawi. The models allow for differentiated responses by different household types to change and for the partial equilibrium effects of consequent supply, demand, and price adjustments in labor and grain markets. The models provide insights into the relations between own‐farm and nonown‐farm activities in different households' livelihoods and in the informal rural economy as a whole, and are used to investigate possible impacts of increasing cash crop prices and of a more open rural economy. Impacts of these changes on the poor are found to be critically dependent upon supply and demand elasticities in labor and grain markets, but the poor could potentially suffer significant losses from increased openness of the local economy leading to increased expenditure by less poor households on imported goods and services.     

Drinking water and off‐farm labour supply: between‐gender and within‐gender bias

In this paper, we use the China Health and Nutrition Survey (CHNS) panel data to analyse the impact of drinking water on off‐farm labour supply. A two‐stage least squares (2SLS) multivariate Tobit regression model with random effects was applied. We find that impacts of drinking water conditions on off‐farm labour supply may be greater for women than men but depends on the specific family role or family structure. A strong within‐gender effect exists in households. For example, daughters are not sensitive to water access nor water quality, but householder's spouses are sensitive to water access, and daughters‐in‐law are sensitive to water quality. Our findings suggest that infrastructure development in improved access to safe water has contributed positively to reductions in traditional gender biases, evening the playing field between daughters, daughters‐in‐law, mothers and mothers‐in‐law. We also find that water the infrastructure program may actually encourage off‐farm labour mobility, reducing the supply of agricultural labour and the share of household labour on the farm. Thus, a broader approach to water policy should also include public investment in achieving greater labour efficiency and productivity.     

Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs

A bivariate probit model was employed to jointly and separately estimate banana market participation decisions of buying and selling households in Rwanda and Burundi using household survey data. Selectivity bias was corrected for estimating the transacted volumes using Heckman's procedure. The results showed that transaction cost‐related factors such as geographical location of households, market information sources, and travel time to the nearest urban center influence market participation. Non‐price‐related factors such as security of land tenure, labor availability, off‐farm income, gender of the household head, and years of farming experience had a significant influence on the transacted volumes. Output prices had a significant correlation with sales volume, indicating price incentives increased supply by sellers. Generally, the findings suggest that policies aimed at investments in rural road infrastructure, market information systems, collective marketing, and value addition of banana products may provide a potential avenue for mitigating transaction costs and enhancing market participation and production of marketed surplus by rural households.     

Household‐level Impacts of Dairy Cow Ownership in Coastal Kenya

This study uses heteroskedastic Tobit and Censored Least Absolute Deviations models to examine the impacts of dairy cow ownership on selected outcomes for a sample of 184 households in coastal Kenya. The outcomes examined include gross household cash income, gross non‐agricultural income, consumption of dairy products, time allocated to cattle‐related tasks, number of labourers hired and total wage payments to hired labourers. The number of dairy cows owned has a large and statistically significant impact on household cash income; each cow owned increased income by at least 53% of the mean total income of households without dairy cows. Dairy cow ownership also increases consumption of dairy products by 1.0 litre per week, even though most of the increase in milk production is sold. The number of dairy cows has no significant effect on total labour for cattle‐related tasks. However, in contrast to previous studies, labour allocation to cattle by household members decreases and labour requirements for dairy cows are met primarily by an increase in hired labour. Dairy cow ownership results in relatively modest increases in payments to hired labourers and the number of hired labourers employed. The large positive impacts on income and the substitution of hired for household labour in cattle care suggest that intensification of smallholder dairying can be beneficial as a development strategy in the region if disease and feed constraints are addressed.     

Rice Production,Trade and the Poor: Regional Effects of Rice Export Policy on Households in Vietnam

Analysing Vietnam's rice export policy and recent export ban in the context of rising food prices, this study combines insights from a regionally‐disaggregated or ‘bottom‐up’ CGE model and a micro‐simulation using household data. Three main conclusions are drawn. First, although there is little impact on GDP, there are substantial distributional impacts across regions and households from different export policies and market conditions. Second, both rural and urban households, including poor households, benefit from free trade, even though domestic rice prices are higher. Finally, under free trade, relatively large gains accrue to rural households, where poverty is most pervasive in Vietnam.     

Deprived land-use intensification in shifting cultivation: the population pressure hypothesis revisited

This article provides a theoretical framework, based on optimal control theory, to analyze farm households' land‐use intensification decisions in forest‐based shifting cultivation (slash‐and‐burn) agroecosystems. The main results from the analysis generally coincide with the “Population Pressure Hypothesis” (PPH) as an important driver of soil degradation due to the so‐called “fallow crisis” or “deprived land‐use intensification” in shifting cultivation. However, the model also shows, from a supply perspective, that such a vicious circle of lower yields and greater forest land clearing may be avoided when the production elasticity of on‐farm labor outweighs the elasticity of substitution between farm labor and soil fertility. Furthermore, using data from shifting cultivating households from Yucatán, Mexico, we calibrate the effect of changes in population density. The numerical analysis suggests that by contrast to better‐off households, when population density increases, poorer shifting cultivating households' optimal labor allocation strategy is to further extensify land use by clearing more forest in the village common property land, or ejido land.     

劳动力转移下不同生计农户低碳用能影响因素以浙豫陕3省农户为例

目的 农户用能的低碳转型对推进我国能源消费革命、缓解能源贫困和减少环境污染具有重要意义。方法 文章利用“劳动力转移与农村生活能源”2018年专项调查数据并采用多元线性及Logit回归模型考察劳动力转移下不同生计农户低碳用能影响因素。结果 劳动力转移程度及性别对一兼户低碳用能有显著负向影响,而劳动力转移空间对其有显著正向影响;劳动力转移程度及空间对二兼户低碳用能有显著正向影响,而劳动力转移性别对其有显著负向影响;劳动力转移程度、空间及性别对非农户低碳用能均有显著正向影响;户主受教育水平对4类农户高质商品用能有显著正向影响,而能源价格对其有显著负向影响;户主年龄、耕地面积对4类农户新型可再生能源选择有显著负向影响。结论 在乡村振兴战略进程中劳动力转移能够促进农户生活用能向可持续低碳转型,户主受教育水平、户主年龄、能源价格及耕地面积的影响不容忽视;科学引导劳动力转移及低碳用能亟待加强。     

The estimation of long term impacts of China's key priority forestry programs on rural household incomes

We use a large unique household panel dataset spanning 16 years to estimate the impacts of three Key Priority Forestry Programs (the KPFPs) in China on household incomes. The programs are the most significant of China's forest policies namely the Sloping Land Conversion Program (the SLCP), the Natural Forest Protection Program (the NFPP), and the Desertification Combating Program around Beijing and Tianjin (the DCBT). A fixed effect model with clustered standard errors is used to identify programs’ impacts based on variation in participation across households and time. In addition to estimating the total impacts of these programs, individually and in combination, we disaggregate the effects by income source, stage of policy implementation, and duration of participation. Overall, the impacts of the KPFPs on rural households’ income vary with time of enrollment and policy stage. We observe that the KPFPs in their initial stages of implementation, and for the early years of household participation, had negative, or at best neutral impacts on household incomes, in particular incomes from land. However, the later stages of the SLCP and the DCBT have tended to raise land-based incomes, and the NFPP has ceased to have a negative effect. This is likely to be in part the result of adjustments made by rural households over time in response to changes in the programs, as well as in market and environmental conditions.     

Labour Migration and Gendered Agricultural Relations: The Feminization of Agriculture in the Ejidal Sector of Calakmul,Mexico

We examine the nature of the ‘feminization of agriculture’ in the semi‐subsistence, peasant production sector of southeastern Mexico, as associated with male labour out‐migration. Presenting findings from empirical work with smallholder producers, we discuss the impact of men's migration to the United States on women's participation in agriculture and gendered relations of agricultural production. In 2007, we conducted a survey of 155 semi‐subsistence, smallholder households in six ejidos. This survey was supplemented by ethnographic research in a single ejido. Our findings demonstrate the need to distinguish between farm labour and management in this sector, and the potentially significant (but focused) changes in the local relations of agricultural production wrought by gendered patterns of labour migration – specifically in tenure, land‐use decision‐making and the management of hired labour.     

Heterogeneity of commercialization gains in the rural economy

Farmers in low‐income rural economies often fail to switch to cash crops from staple production despite the positive income effects of commercialization expected by policy makers. The literature suggests that market failures prevent households from cash crop adoption but remains inconclusive regarding farmers' motives and the effects of commercialization. This article contributes to the debate by offering an original approach to the analysis of commercialization outcomes and farmers' decisions. It consists of applying a model with essential heterogeneity and a semiparametric estimation technique to analyzing harvest value returns to cash cropping. Using Malawian data, we show considerable heterogeneity in harvest value returns to cash cropping both within and between groups of farmers choosing different crop portfolios. Importantly, the results imply rational choices based on comparative advantage considerations of farming households: farmers self‐select into the activity where they expect higher gains and adopt cash crops when facing weaker market barriers.     

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.     

Determinants of economic well-being among U.S. farm operator households

Participation in government programs has a mild impact on the economic well‐being of U.S. farm households. Major factors that determine farm household prosperity are the primary operator's education level and ethnicity, education level of the spouse, and other characteristics such as forward purchasing of inputs, use of contract shipping of products, having a succession plan, farm ownership, and location in a metro area. This article uses the 2001 Agricultural Resource Management Survey (ARMS) as well as relative and an absolute measure to assess U.S. farm households' economic well‐being. The relative measure compares the income and wealth position of farm households relative to median income and median wealth of the general population. The absolute measure adds annualized wealth to a farm household's income.     

Impact of risk aversion on fertiliser use: evidence from Vietnam

This study utilises a large nationally representative household survey of unusual scope and richness from Indonesia to analyse how the receipt of educational transfers, scholarships and related assistance programmes affects the labour supply of children and the marginal spending behaviour of households on children's educational goods. We found strong evidence of educational cash transfers and related assistance programmes significantly decreasing the time spent by children in income-generating activities in Indonesia. Households receiving educational transfers, scholarships and assistance were also found to spend more at the margin on voluntary educational goods. These results were stronger for children living in poor families. Our results are particularly relevant for understanding the role of cash transfers and educational assistance in middle-income countries where enrolment rates are already at satisfactory levels, but the challenge is to keep the students in school at post-primary levels.     

Can economic incentives encourage actual reductions in pesticide use and environmental spillovers?

Chemical pesticides constitute an important input in crop production. But their indiscriminate use can impact negatively agricultural productivity, human health, and the environment. Recently, attention is focused on the use of economic incentives to reduce pesticide use and its related indirect effects. The aim of this work is to assess the effectiveness of different economic instruments such as taxes and levies in encouraging farmers to decrease pesticide use and their environmental spillovers. A policy simulation model is employed using data from Dutch cash crop producers including two pesticide categories that differ in terms of toxicity and pesticides’ environmental spillovers. Four different instruments were selected for evaluation: pesticide taxes, price penalties on pesticides’ environmental spillovers, subsidies, and quotas. The results of the study indicate that even high taxes and penalties would result in a small decrease in pesticide use and environmental spillovers. Taxes that differentiate according to toxicity do not lead to substitution of high‐ with low‐toxicity pesticides. Subsidies on low‐toxicity products are not able to affect the use of high‐toxicity products. Pesticide quotas are more effective in reducing pesticide use and environmental spillovers.     

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.     

Are farmers ‘efficient but poor’? The impact of crop choices on technical efficiency and poverty in Nigeria

We test the ‘efficient-but-poor’ hypothesis by estimating the determinants of smallholders' choice over cash or food crops and whether their crop choice affects technical efficiency and poverty using the national household panel data in Nigeria. We employ the stochastic frontier analyses correcting for sample selection about farmers' crop choice. Our results indicate that smallholders are generally efficient in their resource allocations. A treatment effects model is employed to estimate farmers' crop choice in the first stage and the impact of their choices on technical efficiency and poverty outcomes in the second stage. The results show that farmers' access to free inputs, non-farm income and the use of seeds from the previous growing season are important determinants of crop choice. The adoption of cash crops by food-crop producing households will not generally reduce poverty, although it will improve technical efficiency marginally. However, if cash crops are commercialised, poverty tends to decline.     

Not my problem: Growth spillovers from uncoordinated land use policy

Land use policy is administered at the local level in the U.S. However, many of the benefits and costs have broader spatial impacts. Thus, a lack of coordination across local jurisdictions may lead to unintended spillovers. Using historical data from the Baltimore, Maryland metro, we examine the impact that an extensive zoning policy change in Baltimore County had on new housing supply in surrounding counties. Defining treatment and control locations in surrounding counties based on their adjacency to Baltimore County, we find that the change in zoning policy led to an increase in housing supply of 42%–97% in adjacent counties. In both spatial and temporal falsification tests, we fail to find evidence of a spillover effect suggesting that the increased development was likely the result of spillovers from uncoordinated policy.     

Energy price reform and food markets: the case of bread supply chain in Iran

Reforming energy price is the core of Iranian economic reform plan during 2010–2014. However, increasing price of energy may have adverse effects on the agricultural and food markets. This study was conducted to address these problems in the most important food of Iranian people “bread” by developing a spatial supply chain model. Results show that consumers’ welfare would experience a sharp decrease though the impacts on farmers are trivial. Also, results indicate that the key to success the reform without political backlash in the short‐run is the cash transfer program under which the government redistributes part of the reform's benefits among consumers. Per capita compensation payments would be equal to 51.50 and 46.09 US$ per year for a typical rural and urban person, respectively. Moreover, the results provide more detailed information about the market characteristics and the payments both in nationwide and regional scale as well as in different income groups.     

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.     

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.