Agricultural Value Addition Research Articles

Can efficient transport moderate real sector productivity?

PurposeThis study aims to test the role of infrastructure for economic growth. For this purpose, panel data of the world is selected from 1998 to 2018 and the study has used slope moderator to test the productivity of real economic activity with economic growth.Design/methodology/approachIn this context, the feasible generalized least square method is adopted to estimate the results. Four types of infrastructure indicators i.e. quality of air, port, rail and road are used along with disaggregated GDP.FindingsAccording to the results of this study, the role of industrial and agricultural value addition without infrastructure is negative. For industrial value addition, the cross product with all infrastructure types positively impacts economic growth. All the infrastructures, along with services value addition, except seaport, are contributing to economic growth positively. Along with agriculture value addition, only road infrastructure is contributing to economic growth positively. This study has also used two control variables i.e. quality of education and institutions. These variables are also found to be positive and significant with economic growth.Originality/valueThis study explores the moderating role of quality of infrastructure sector on real sector productivity, which is leading to economic growth.

Implication of quality uncertainty on market exchange: The case of seed industry in Kilolo district, Tanzania.

An increasing demand of agricultural intensification and value addition necessitates the use of improved inputs such as improved seed. Smallholder farmers contribute about 70% of agricultural production in Tanzania. Agriculture sector in Tanzania contributes about 24.1% of the GDP, 30% of exports and 65% of industrial raw materials. Thus, agriculture development, economic growth and industrialization are inseparable. Due to the nature of the product, smallholder farmers cannot judge the overall excellence of seed at the time of buying. This paper assessed quality uncertainty in maize and vegetable seed and its implication for market exchange between farmers and seed sellers in Kilolo district, Iringa Tanzania. The study used a random sample of 130 smallholder farmers and representatives from ten seed companies. Asymmetric information prevails between the two trading sides i.e. sellers and buyers leading into quality uncertainty. Moreover, product augmentation is profoundly overlooked whereby most of seed companies have not augmented their products. Because an improved seed is a quintessential example of an experience good, quality uncertainty of some crop varieties under field conditions favored some seed brands to be used more by farmers compared to others. This paper offers a thorough deduction on quality uncertainty under farmers’ field condition and its implication on market exchange. It adds information in the body of knowledge on how an improved seed can contribute to sustainable production of food and industrial raw materials, which is a step towards desired industrialization agenda in Tanzania.

Implication of quality uncertainty on market exchange: the case of seed industry in Kilolo district, Tanzania

An increasing demand of agricultural intensification and value addition necessitates the use of improved inputs such as improved seed. Smallholder farmers contribute about 70% of agricultural production in Tanzania. Agriculture sector in Tanzania contributes about 24.1% of the GDP, 30% of exports and 65% of industrial raw materials. Thus, agriculture development, economic growth and industrialization are inseparable. Due to the nature of the product, smallholder farmers cannot judge the overall excellence of seed at the time of buying. This paper assessed quality uncertainty in maize and vegetable seed and its implication for market exchange between farmers and seed sellers in Kilolo district, Iringa Tanzania. The study used a random sample of 130 smallholder farmers and representatives from ten seed companies. Asymmetric information prevails between the two trading sides, i.e. sellers and buyers, leading into quality uncertainty. Moreover, product augmentation is profoundly overlooked whereby most of seed companies have not augmented their products. Because an improved seed is a quintessential example of an experience good, quality uncertainty of some crop varieties under field conditions favored some seed brands to be used more by farmers compared to others. This paper offers a thorough deduction on quality uncertainty under farmers' field condition and its implication on market exchange. It adds information in the body of knowledge on how an improved seed can contribute to sustainable production of food and industrial raw materials, which is a step towards desired industrialization agenda in Tanzania.

Mechanization Status, Promotional Activities and Government Strategies of Thailand and Vietnam in Comparison to Bangladesh

Reasonable use of agricultural machinery has an extraordinary potential for poverty alleviation by increasing land and labor productivity in Thailand, Vietnam, and even in Bangladesh. This study was conducted under a program entitled “Agriculture Mechanization, Agro-Processing, Value addition and Export Market Development in Thailand and Vietnam from 1–14 November, 20I9” from the Ministry of Agriculture, Bangladesh. In all three distinct nations, farming activities represent a significant area of activity and remains the biggest wellspring of agricultural business. About 10.5% of Thailand’s, 21.5% of Vietnam’s, and 14.23% of Bangladesh’s GDP come from agriculture. For sustainable development, it is essential to modernize agriculture through the mechanization of its operations, which is therefore inevitable in the studied countries. Thailand’s government started mechanization in 1891 with the import of steam-powered tractor and rotary hoes. Since then the country has witnessed several milestones in the course of mechanization development. The focal plain agro-ecological zone of the state is the maximum and almost fully modernized area. As of now, there are two methods of practicing farming apparatus use: as a proprietor and/or through custom renting provision which coincides with Vietnam and Bangladesh. Historically, mechanization patterns in Vietnam can been described by tillage machinery with associated implement equipment use preceding 1975. This was non-linear, followed by a decreasing trend during the 80s prior to recovery during the 90s, with significant disparities in implementation status across the areas. In 2018, the number of tillage implements and harvesters was boosted about 1.6 and 25.6 times, respectively compared with 2006. The percentage of machinery use in soil tillage operation is 80% of the whole territory of cultivable land in Vietnam, compared to about 90% in Bangladesh and 100% in Thailand. Mechanization in Bangladesh started before independence with the importation of 2-wheel tractors and irrigation pumps in the last part of the 1960s as part of ‘Green Revolution’ activities. To continue this momentum, the Bangladesh Government permitted the continuation of agricultural machinery importation after later autonomy. Machinery use in different agricultural activities has increased in recent years in the areas of irrigation, land preparation, intercultural operation, and threshing. Though its degree of advancement is by and large still quite low contrasted with other South Asian nations, it is noticeable that the most recent two decades, the pace of mechanization has increased rapidly with the increase of mechanical power use in farm activities. The use of farm machinery in rice cultivation has been the most amazing when contrasted with different crops in these three nations. A clear comparison has been given in the paper, which aims to help researchers and policymakers take necessary measures.

Implication of quality uncertainty on market exchange: The case of seed industry in Kilolo district, Tanzania.

An increasing demand of agricultural intensification and value addition necessitates the use of improved inputs such as improved seed. Smallholder farmers contribute about 70 % of agricultural production in Tanzania. Agriculture sector in Tanzania contributes about 24.1 % of the GDP, 30 % of exports and 65% of industrial raw materials. Thus, agriculture development, economic growth and industrialization are inseparable. Due to the nature of the product, smallholder farmers cannot judge the overall excellence of seed at the time of buying. This paper assessed quality uncertainty in maize and vegetable seed and its implication for market exchange between farmers and seed sellers in Kilolo district, Iringa Tanzania. The study used a random sample of 130 smallholder farmers and representatives from ten seed companies. Asymmetric information prevails between the two trading sides i.e. sellers and buyers leading into quality uncertainty. Moreover, product augmentation is profoundly overlooked whereby most of seed companies have not augmented their products. Because an improved seed is a quintessential example of an experience good, quality uncertainty of some crop varieties under field conditions favored some seed brands to be used more by farmers compared to others. This paper offers a thorough deduction on quality uncertainty under farmers’ field condition and its implication on market exchange. It adds information in the body of knowledge on how an improved seed can contribute to sustainable production of food and industrial raw materials, which is a step towards desired industrialization agenda in Tanzania.

Potential of renewable energy, agriculture, and financial sector for the economic growth: Evidence from politically free, partly free and not free countries

This study was designed to investigate the role of political stability in the nexus between financial development, renewable energy, total reserves, agriculture value addition, and economic growth from 1995 to 2017 in 100 countries. The long-run causality was confirmed for GDP in politically free countries, which implies that political stability is beneficial for the economy. The GDP had bi-directional causality with financial development and total reserves. The increase in GDP was 0.199% (free countries), 0.097% (partly free countries), and 0.055% (not free countries) for 1% rise in financial development. The renewable energy-led growth hypothesis was confirmed in politically free and partly free countries. The impact of total reserves and renewable energy on GDP was insignificant in politically not free countries. The increase in GDP was 0.024% (free countries) and 0.106% (partly free countries) for 1% rise in total reserves. The economic advantage of agriculture value addition was more in politically not free countries (0.461%) followed by partly free and free countries. The agriculture value addition is required to stimulate the economy and ensure food availability.

Technology, energy use, and agricultural value addition nexus: an exploratory analysis from SSA countries

This paper examines whether technology and energy have a role to play in agriculture value addition in nine sub-Saharan African countries for a sample period between 1981 and 2015. We employ the Autoregressive Distributed Lag modelling technique to examine the relationship among the variables. Models with technology, energy use, and a combination of technology and energy were considered, respectively. Only Nigeria recorded a positive and significant impact of technology on its agricultural value addition in both the short run and long run in the first model. In the second model, energy use positively and significantly influenced agricultural value addition in two countries (Botswana and South Africa) in the short run. However, the long-run coefficients of energy use were found to be positive and significant for Benin and South Africa. In the third model, short-run coefficients of technology were largely positive but statistically insignificant across the countries, while its long-run coefficient was largely positive but only statistically significant for Nigeria. Also, the short-run effect of energy use remained positively significant for Botswana and South Africa as observed in the earlier model. However, its long-run effect was only positive and statistically significant in three countries (Benin, South Africa, and Togo). Thus, the study recommends the need for huge investment in technology and energy use as well as the sensitisation of local farmers in adopting technology to further enhance the quality of their output.

Implication of quality uncertainty on market exchange: The case of seed industry in Kilolo district, Tanzania.

An increasing demand of agricultural intensification and value addition necessitates the use of improved inputs such as improved seed. Smallholder farmers contribute about 70 % of agricultural production in Tanzania. Agriculture sector in Tanzania contributes about 24.1 % of the GDP, 30 % of exports and 65% of industrial raw materials. Thus, agriculture development, economic growth and industrialization are inseparable. Due to the nature of the product, smallholder farmers cannot judge the overall excellence of seed at the time of buying. This paper assessed quality uncertainty in maize and vegetable seed and its implication for market exchange between farmers and seed sellers in Kilolo district, Iringa Tanzania. The study used a random sample of 130 smallholder farmers and representatives from ten seed companies. Asymmetric information prevails between the two trading sides i.e. sellers and buyers. Moreover, product augmentation is profoundly overlooked whereby most of seed companies have not augmented their products. Despite that genetic and environmental interaction sways crop performance, the paper offers a thorough deduction of the results and its implication on market exchange. This paper adds information in the body of knowledge on how an improved seed can intensify upsurge production of food and industrial raw materials, which is a step towards desired industrialization agenda in Tanzania.

Isolation, Characterization, Evaluation and Establishment of Polymeric Principles from Curcuma Angustifolia as Multitasking Excipient

In India, Chhattisgarh is famous as Herbal state with its beautiful natural resources of forests and agricultural fields and value addition has been done so far in Chhattisgarh to maintain or improve the quality of the plants before the material reaches the industry. Presently, the herbal industry in Chhattisgarh is not very organized. The plant derived gums, mucilages from natural sources like carrageen an, thaumatin, lard, storax, agar, gum acacia, tragacanth and many more to name comply with many requirements of pharmaceutical excipients. These can be preferred for formulation development as being stable and involving less regulatory issues as compared to their synthetic counter parts. They can also be easily modified to meet the specific needs, thereby being a potent and economic vehicle for delivering active pharmaceutical ingredient in formulation. Thus our concerned and aims of the study is to throw light on the potential of natural excipients which can be proposed to be used as diluent, binder, disintegrant as well as lubricant in various types of formulations as they are biocompatible and capable of giving additional nutrition to the developed dosage form from indigeneous sources of Chhattisgarh state which could serve for cost effective and economical medicament and will enhance the value addition to the proposed herb and herbal species.

Investigating Pakistan’s Revealed Comparative Advantage and competitiveness in Cotton Sector

Cotton sector, one of the most important sectors of agriculture, plays a pivot role in the socio-economic uplift of Pakistan as its contribution to agriculture value addition is 5.5 % and to GDP is 1 %. It along with low wage cost also ensures the massive availability of raw material for textile industry which enables Pakistan to attain competitiveness in the world market. The aim of present study is ,therefore, to measure the export competitiveness in cotton sector of Pakistan by utilizing a set of Revealed competitive advantage and Revealed comparative advantage (RCA) indices such as RCA, RCA#, Symmetric Comparative index (RSCA), Revealed Import Advantage index (RMA), Net export index (NEI)and Revealed Trade Advantage index (RTA) vis-a-vis world trade. The data was taken from International Trade Center (ITC) UN-COMTRADE Statistics for Pakistani cotton from 2003-17. The results of the study explored that Pakistan had a comparative and competitive advantage in cotton exports, while comparative disadvantage in cotton imports. Moreover, Pakistan had net competitive advantage in cotton sector.The study suggests that there should be more emphasis on Infrastructure, reduction in the cost of production, utilities and finance, use of modern technology, investment in agricultural sector and marketing in international market to boost the exports volume of cotton. Net export index (NEI), Revealed, Symmetric Comparative index (RSCA) (Larsen 1998), Vollrath index (1991) (RCA#), Revealed Import Advantage index (RMA) and Revealed Trade Advantage index (RTA).

Significance of Badri cattle in rural household of Uttarakhand hills

The present study was carried out to investigate the significance of Badri Cattle in rural household of Uttarakhand state of India. A total of 120 respondents, 60 each from Pauri Garhwal and Almora district were randomly selected for the study and data were collected using semi-structured interview schedule. The results revealed that majority of respondents (71.7%) had low level of income generation and consume less quantity of milk obtained from Badri cattle. The average annual income earned through Badri cattle was ` 13054/household, which contributed 19.9% to gross annual income. Average milk consumed and sold was 1.7 and 1.2 litres/day/household, respectively with average fat, protein and calcium contribution of 70 g, 55 g and 2000 mg, respectively. The results revealed that Badri cattle generated 91.2–136.9 mandays for 59.2% of household followed by 136.9–182.5 man days for 37.5% of household and 182.5–228.1 mandays for 3.3% of respondents annually with an average of 136.9 mandays/ annum. Majority of respondents (83.3%) had low level of Farm Yard Manure (FYM) production followed by medium (11.7%) and high (5%) levels of FYM production. The study showed that the average FYM production was 4.8 tonnes per annum with NPK production of 38.3, 19.1 and 76.6 kg/annum, respectively. The results also revealed that 20.8% of the respondents perceived Badri cattle as a security during uncertainties, 58.3% of respondents consider keeping Badri cattle a status symbol and cent percent of the respondents consider that Badri cattle has religious importance. Most preferred reason for rearing of Badri cattle by majority of respondents (94.2%) was fulfillment of need for milk and milk products followed by manure utilization (68.3%) and draught power (10%). The overall contribution of Badri cattle in the livelihood generation was very low and therefore, needs to be enhanced by improving the production performance of cattle and agriculture practices, marketing and value addition facilities.

Assessment of skills gap among intermediaries of cotton supply chain in Punjab, Pakistan

Cotton is an important crop in Pakistan as it contributes 1.0% of GDP and 5.1% in agricultural value addition (GOP, 2017). Despite the fact that cotton value chain has strategic importance in Pakistan in terms of its contributions towards GDP, employment, export earnings, poverty alleviation, and empowerment of women, its real value has not yet been realized. One area that has an effect on income of farmers and that has not received attention is the role of middleman in the agricultural marketing. The aims of this study were to address the skill gap of the commission agents and to develop techniques to bridge those gaps. Random sampling technique was used to determine sample size. The total sample size of the study was 50 respondents. SPSS (Statistical Package for Social Sciences) was employed to analyze the collected data. Results show that most of the respondents were in their productive ages to make effective decisions and understand features of doing business. Of the total respondents 6% had no education while 94% had education of varied level. Respondents were experienced in doing business of cotton marketing. Most of the commission agents were having awareness gap regarding quality characteristics of cotton. Commission agents had moderate skills level in management of various marketing costs. Mostly the commission agents were not considering fiber fineness, fiber length, fiber strength, fiber maturity and contamination due to hair as factors towards low prices and poor quality of cotton. Weak capacity of institutional infrastructure and lack of marketing system was the major constraint in marketing of cotton. Commission agents should be equipped with training regarding maintenance of quality attributes, management of marketing costs and controlling of various factors affecting price and quality of cotton.

Value Addition and Productivity Differentials in the Nigerian Cassava System

There is an increasing need to improve value addition in order to get maximum utility from agricultural systems. Using a retrospective panel data from 482 cassava farmers covering the years 2015–2017, this study examined the effect of value addition on productivity of farmers in the cassava system in Nigeria. We analysed a non-parametric Data Envelopment Analysis to examine productivity across cassava production systems over the three year period. We also examined the impact of value addition on productivity using an endogenous switching regression to account for unobservables that determine the decision to add value and productivity of the farmers. The study found that cost and revenue outlays increased with value addition. Cassava farmers in general operated below the efficiency frontier, with total productivity declining over the 2015–2017 period. However, higher value addition farmers had better efficiency and non-reducing productivity in the periods studied. We found evidence of selection bias in the decision to add value and productivity of the farmers. The conditional and unconditional outcome estimates revealed positive gains in productivity with value addition, confirming the hypothesis that value addition increases farming households’ productivity. We recommend that essential services such as extension services, agricultural training, and ease of enterprise registration that drive agricultural value addition be made available to farmers.

Robustness of geography as an instrument to assess impact of climate change on agriculture

PurposeThe empirical literature on climate change and agriculture does not adequately address the issue of potential endogeneity between climatic variables and agriculture, which makes their estimates unreliable. This paper aims to investigate the relationships between climate change and agriculture and test the potential reverse causality and endogeneity of climatic variables to agriculture.Design/methodology/approachThis study introduces a geographical instrument, longitude and latitude, for temperature to assess the impact of climate change on agriculture by estimating regression using IV-two-stage least squares method over annual panel data for 60 countries for the period of 1999-2011. The identification and F-statistic tests are used to choose and exclude the instrument. The inclusion of some control variables is supposed to reduce the omitted variable bias.FindingsThe study finds a negative relationship between temperature and agriculture. Surprisingly, the magnitude of the coefficient on temperature is mild, at least 20 per cent, as compared to previous studies, which may be because of the use of the instrumental variable (IV), which is also supported by an alternative robust measure when estimated across different regions.Practical implicationsThe study provides strong implications for policymakers to confront climate change, which is an impending danger to agriculture. In designing effective policies and strategies, policymakers should focus not only on crop production but also on other agricultural activities such as livestock production and fisheries, in addition to national and international socio-economic and geopolitical dynamics.Originality/valueThis paper contributes to the growing literature in at least four aspects. First, empirical settings introduce an innovative geographical instrument, Second, it includes a wider set of control variables in the analysis. Third, it extends previous studies by involving agriculture value addition. Finally, the effects of temperature and precipitation on a single aggregate measure, agriculture value addition, are separately investigated.

Management of Root Rot Diseases of Cool Season Food Legumes Crops in Ethiopia

Particularly in Ethiopia legumes grown in 2014/15 covered 12.41% (1,558,442.04 hectares) of the grain crop area and 9.88% (about 26,718,430.40 quintals) of the grain production was drawn from the same crops. Legumes, which occupy approximately 13 percent of cultivated land and account for approximately 10 percent of the agricultural value addition, are critical to smallholder livelihoods in Ethiopia. The major constraints to the production of these crops are diseases, insect pest attack, poor agronomic practices and lack of improved cultivars and crop protection technologies. Root rot diseases are a major limiting factor in legume production. The diseases depress seedling germination and cause post emergence damping off, resulting in poor crop stand and low yields. Several root rot casing pathogen such as Rhizoctonia bataticola, Rhizoctonia solani and Fusarium solani on chickpea, Rhizoctonia bataticola and Rhizoctonia solani on lentil and Rhizoctonia bataticola, Rhizoctonia solani and Fusarium solani on faba bean have been reported in Ethiopia. They can cause yield loss up to 45% and 50% in faba bean and chickpea if properly not manage. Based on this information review was made to review some available root rot management methods of legume crops and to make some suggestions on the methods which are not practice yet. Several chemicals, cultural practice and bio-gent used to control this disease. Among bio-agent mostly used to control this disease are Trichoderma viride and Bacillus megaterium take a great share. In the future particularly in our country full exploitation of the potential of biological control of this disease has to be done. In general techniques which are based on the molecular techniques like marker assisted selection to deploy resistance has to be applied in the processes of creating resistant variety development.

Econometric analysis of short-run and long-run determinants of agricultural value addition in Africa

The study investigated the effects of trade openness, electricity consumption, education and technology on agricultural value addition growth in Africa. It used data accessed from World Bank Data Base (1971-2011) which were subjected to econometric tests before applying the bound test for cointegration using Autoregressive Distributed Lag model. Results indicated the existence of a steady-state long-run relationship between agricultural value addition and its hypothesized determinants. Finally, technology (0.446) at p < 0.01and electricity consumption (1.695), at p<0.01 were the major long-run determinants of agricultural value addition growth. However technology (Wald stat = -0.551) with p <0.01, electricity (Wald Stat = 0.246) at p<0.01 and education (Wald F Stat = -0.417) with p < 0.01 explained the variation in agricultural value addition in Africa in the short-run. It was recommended that African nations should invest on electricity generation, technology development and skill acquisitions for developing agricultural value chain on the continent.Keywords: Agricultural value addition, Trade openness, Autoregressive Distributed Lag Model, Time Series Modeling, electricity consumption

Non-timber forest products and their contribution to households income around Falgore Game Reserve in Kano, Nigeria

IntroductionIn the recent decades, there has been growing interest in the contribution of non-timber forest products (NTFPs) to livelihoods, development, and poverty alleviation among the rural populace. This has been prompted by the fact that communities living adjacent to forest reserves rely to a great extent on the NTFPs for their livelihoods, and therefore any effort to conserve such resources should as a prerequisite understand how the host communities interact with them.MethodsMultistage sampling technique was used for the study. A representative sample of 400 households was used to explore the utilization of NTFPs and their contribution to households’ income in communities proximate to Falgore Game Reserve (FGR) in Kano State, Nigeria. Descriptive statistics and logistic regression analysis were used to analyze and summarize the data collected.ResultsThe findings reveal that communities proximate to FGR mostly rely on the reserve for firewood, medicinal herbs, fodder, and fruit nuts for household use and sales. Income from NTFPs accounts for 20–60% of the total income of most (68%) of the sampled households. The utilization of NTFPs was significantly influenced by age, sex, household size, main occupation, distance to forest and market.ConclusionsThe findings suggest that NTFPs play an important role in supporting livelihoods, and therefore provide an important safety net for households throughout the year particularly during periods of hardship occasioned by drought. It is suggested that stakeholders should prioritize technical and financial support programs on agricultural value addition and handcrafts that would promote off-farm income generating activities, in addition, provision of alternative domestic cooking energy such as biogas in communities proximate to FGR in order to reduce pressure relating to fuelwood gathering from the forest, this will help to improve forest resources quality.

Sector value addition, technology and CO2 emissions in Saudi Arabia

This study assesses the Environmental Kuznets Curve (EKC) hypothesis with the case study of Saudi Arabia by considering three channels: volume of production, sector value addition to GDP and technological innovation. Using a long time-series data set and applying autoregressive distributed lags (ARDL) methodology, this study nullifies the existence of the EKC hypothesis in the case of Saudi Arabia. The study also provides robust evidence that economic growth fosters CO2 emissions linearly. The results also present that the value addition of growth in the industrial and service sectors is responsible for faster growth in CO2 emissions, while agriculture value addition is negatively and insignificantly associated with emissions. Finally, this study shows that technological innovation is insignificant in helping to reduce CO2 emissions. Thus, substantial technological progress in the production process would reduce CO2 emissions without harming economic growth.

English

Being the queen of fibers, cotton (Gossypium hirsutum L.) enjoys itself a predominant position amongst all other cash crops. It holds a lion’s share in the foreign exchange (55%) of Pakistan and it production accounts for 1.5% in GDP and 7.1% in agriculture value addition (GOP, 2015). Invention of Bt. (Bacillus thuringiensis) genotypes has caused a hesitation among farmers whether to sow it or not owing to the controversial debates regarding it’s sowing windows and some other complications. It is a well-known fact that crop growth, and development are weather dependent and it is considered as the most limiting factor in crop production (Hoogenboom, 2000; Yucel and Gormus, 2002). Among environmental factors affect cotton growth, developmental rate and yield, temperature plays a crucial role as it determines the initiation and ending period of phenological stages during crop growing cycle (Luo, 2014). Cotton crop requires specific thermal time for the completion of each phenophase (Bange and Milroy, 2004) but critical phenophases are detrimentally affected by extremely high and cold temperature stresses. Although cotton is a perennial and morphologically indeterminate crop but it is phot period sensitive (Bange et al., 2008). Degree day’s accretion above an effective threshold temperature is considered as a good estimate for temperature impact on growth and development. Each phenological stage of varieties requires a specific thermal time for its initiation and completion but it is strongly influenced by sowing time (Sikder, 2009). Sowing time and duration of growth cycle are determined by the Pak. J. Agri. Sci., Vol. 53(4), xxx-xxx; 2016 ISSN (Print) 0552-9034, ISSN (Online) 2076-0906 DOI: 10.21162/PAKJAS/16.4549 http://www.pakjas.com.pk

Determinants of Earnings from Tea Export in Kenya: 1980-2011

Fluctuation of tea export earnings affects the profitability of firms in the sector and therefore farmers’ earnings (bonus). To this end, there is dire need for stabilizing the earnings to farmers hence need to know the key factors which could be targets for policy and hence the need for this study. The dependent variable was tea export earning while the independent variables were real exchange rate, foreign income and inflation. To enhance accuracy and credibility of this study, control variables used include unit prices of tea, agriculture value added as well as export of goods and services. The specific objectives included exploring the effect of real exchange rate on tea export earnings; the effect of inflation rate, and establishing the effect of foreign income of major trading partners on tea export earnings. Various regression methods are used to test the research hypothesis, including unit root tests, co integration, and error correction model. The long run and short run analysis of these variables is taken to account. Findings ascertain that indeed the model gives a good description of the variables. Foreign income has an indirect relationship with tea export earnings. On the other hand, they are all significant except inflation. There is a direct relationship between tea export earnings and real exchange rate, tea price, export of goods and services, and agriculture value addition. The study recommends tea exporters to hedge against foreign exchange risk through derivative markets. It encourages stakeholders to engage in marketing and value addition. Value addition is a sustainable solution to ensure stability of earnings from tea exports in the country. Finally, strong monetary policies are recommended to enhance price stability and tea export earnings. This is because such policies should curb the problem of extensive volatility of inflation and exchange rates.