Impacts of tenancy arrangements on investment and efficiency: evidence from Pakistan

In this article, we use farm‐level data from the Punjab Province in Pakistan to analyze the impact of three tenancy contracts on investment in soil‐improving and productivity‐enhancing measures and farm productivity. A multivariate tobit model that accounts for potential substitutability and complementarity of investment options, as well as endogeneity of tenure arrangements was employed in the empirical analysis. Our empirical results indicate that land tenure arrangements influence farmers’ decisions to invest in soil‐improving and productivity‐enhancing measures. In particular, owner‐cultivators with secured tenancy arrangements were found to be more likely to invest in soil‐improving and productivity‐enhancing measures, compared to those on leased contracts. We also find that output per hectare was highest on land cultivated by owners and lowest on land under sharecropping tenancy, lending support to the Marshallian inefficiency hypothesis.     

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.     

Adoption of climate‐smart practices and its impact on farm performance and risk exposure among smallholder farmers in Ghana

Increased climate variability during the last four decades has made the agricultural environment in many developing countries more uncertain, resulting in increasing exposure to risk when producing crops. In this study, we use recent farm‐level data from Ghana to examine the drivers of individual and joint adoption of crop choice and soil and water conservation practices, and how adoption of these practices impacts on farm performance (crop revenue) and exposure to risks (skewness of crop yield). We employ a multinomial endogenous switching regression model to account for selectivity bias due to both observable and unobservable factors. The empirical results reveal that farmers’ adoption of crop choice and soil and water conservation leads to higher crop revenues and reduced riskiness in crop production, with the largest impact on crop revenues coming from joint adoption. The findings also show that education of the household head, access to extension and weather information influence the likelihood of adopting these practices. Thus, enhancing extension services and access to climate information and irrigation can reduce gaps in adoption of soil and water conservation and crop choice, considered as climate‐smart practices that will eventually improve crop revenues and reduce farmers’ exposure to climate‐related production risks.     

Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain

This paper examines the nature and determinants of coordination mechanisms used in the Kenyan fresh milk supply chains, using recent survey data of market participants from Nakuru and Nyandarua districts in Kenya. Three main contractual arrangements are observed in the fresh milk supply chain. These include spot markets, verbal contracts and written contracts. The empirical results indicate that though written contracts are sparingly used in the milk transactions, milk producers are more likely to adopt such contracts compared to traders. The results also show that location of producer, source of market information, distance to markets, travel time to buyers or suppliers, gender of operator, and presence or absence of enforceable contracts significantly influence the type of coordination mechanism used in both producer–buyer and retailer–seller transactions and travel time to milk suppliers.     

Social networks,rice value chain participation and market performance of smallholder farmers in Ghana

This paper examines the impact of rice value chain participation and social networks on smallholder farmers' market performance outcomes (paddy price, quantity of paddy traded, and net returns), using data from a recent survey of 458 smallholder rice farmers in northern Ghana. We employed a treatment effects model to account for potential selection bias associated with observable and unobservable factors. The empirical results reveal that smallholder farmers' participation in a rice value chain is associated with increased paddy price, quantity traded, and net returns. We also find that value chain participation decisions and market performance are positively and significantly influenced by social networks. The empirical results also suggest that sex, farm size, mobile phone ownership, and access to credit significantly increase paddy prices, quantity traded, and net returns of smallholder rice farmers in the value chain.     

Time-Related Characteristics of Tenancy Contracts and Investment in Soil Conservation Practices

We present a dynamic model that shows how different types of land tenancy contracts and their time-related characteristics influence farmers’ decisions to invest in soil improvement and productive inputs. Using recent household and plot-level data from the Brong-Ahafo Region in Ghana, we analyze the impact of land tenancy arrangements, contract duration, as well as the number of times the contract has been renewed in the past on the intensity of investment in soil conservation measures such as ditches and farmyard manure and productive inputs like chemical fertilizer. The empirical findings generally confirm the predictions of the theoretical model and reveal that the intensity of investments on different plots cultivated by a given farmer varies significantly with the type of tenancy arrangement on the plot as well as the time-related characteristics of the contract.     

Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms

This article uses panel data estimation techniques to examinetechnical efficiency of individual dairy farms in northern Germany.To the extent that agricultural production is characterisedby heterogeneous production conditions, estimation techniquesthat do not account for unobserved heterogeneity produce biasedefficiency estimates. We therefore estimate a number of conventionalpanel data models and Greene's recently proposed ‘true’random-effects model, as well as an extension of the model toascertain the effects of different specification on the productionfunction and efficiency estimates. Our results appear to supporttheoretical expectations and previous findings according towhich a specification that is both time-variant and also controlscorrelations between unobserved heterogeneity and the explanatoryvariables avoids heterogeneity bias and thus ensures consistentefficiency estimates.     

A cross-section analysis of household demand for food and nutrients in Tanzania

Undernutrition and malnutrition are still problems of unacceptable proportions in many developing countries. However, the debate on the roles of income and other socio-economic variables such as women’s education and household size on food and nutrient demand continues. This study examines the demand for food and nutrients amongst households in Tanzania, using recent survey data. A quadratic almost ideal demand system (QUAIDS) is employed to estimate price and expenditure elasticities, as well as the impact of socio-economic variables on food demand patterns. A moment-based instrumental variable approach is then used to analyse the determinants of nutrient demand. The results show that income and other socio-economic variables exert significant effects on the demand for food and nutrients. The estimated expenditure elasticities for the nutrients range from 0.307 for iron to 1.26 for Vitamin B₁₂. The elasticities are higher for those micronutrients that are consumed through animal products and lower for those micronutrients that are mainly obtained through staple foods. These results reflect the higher expenditure elasticities for meat, fish, eggs, milk, and milk products, as well as fruits and vegetables, relative to cereals and pulses, reinforcing the assertion that the demand for Vitamins A and B₁₂, as well as calcium and zinc will increase with rising income.     

Economies of Scale and the Demand for Food in Switzerland: Parametric and Non‐Parametric Analysis

This paper examines the role of household public goods arising from co‐residence and economies of scale in the allocation of household expenditure. Using both parametric and non‐parametric methods, the paper tests the theoretical prediction that in the presence of shared public goods, larger households should have higher per capita consumption of private goods like food, provided that they do not substitute too much towards the effectively cheaper public good. The results indicate that, at constant per capita total expenditure, the per capita demand for food declines with household size. No evidence is found in favour of the hypothesis that the endogeneity of male and female hours of work in the labour force could be responsible for this anomaly. However, an examination of the role of direct economies of scale in explaining this negative relationship yielded a negative relationship between household size and quality adjusted unit values, suggesting that the effects of direct economies of scale dominate those generated by public goods.     

Implicit Prices of Indigenous Bull Traits in Crop‐Livestock Mixed Production Systems of Ethiopia*

Abstract: This study examines the bull trait preferences of cattle buyers and estimates the relative willingness to pay for the preferred attributes. Data were generated using choice experiment method in five markets in central Ethiopia. Standard and Heterogeneity in Mean (H‐M) Random Parameters Logit (RPL) models were used to analyze buyers’ preferences for traits, while kernel density estimators were employed to examine the distribution of the willingness to pay for the individual traits. The results show that cattle buyers of central Ethiopia assign high values for good traction potential, big body size, disease resistance, calf vigor, and for places of origin when choosing bulls in the market. The preferences cattle buyers have for these attributes do vary essentially due to differences in occupation, education and age. The main implication of the findings is the necessity of identification and reckoning of trait preferences while designing crossbreeding efforts meant to sustain development of cattle production. Comprehensive and informed approach in this regard will also contribute in reducing the erosion of the genetic diversity of the indigenous animal genetic resources.