Farm Household Model Research Articles

Impact of agricultural input subsidy policy on market participation and income distribution in Africa: A bottom-up/top-down approach

Previous literature on the effects of agricultural input subsidy programs on smallholder market participation has only focused on partial equilibrium analysis, while ignoring important general equilibrium effects. Therefore, this study fills this gap by highlighting the critical role of targeting in the implementation of the agricultural input policy in the Malawian context. Specifically, we establish a bi-directional link between a farm household model and a general equilibrium model in order to explore the spillover effects of the input policy on market orientation and income distribution. Based on the findings, the partial equilibrium analysis underestimates the effect of the input policy and neglects important heterogeneities between farmers. More importantly, we find that extending the program to farmers who are excluded from the cereal and/or labor markets can lead to higher market participation, economic growth, and a reduction in poverty. Our findings suggest better targeting to increase the impact of agricultural input policy on market participation.

Intensification options in cereal-legume production systems generate trade-offs between sustainability pillars for farm households in northern Morocco

CONTEXTFarmers in the MENA (Middle East and North Africa) region face several interrelated challenges including natural resource depletion, low crop productivity, and food and nutrition insecurity. To address some of these challenges, governments are considering different incentives to increase crop production. However, incentives often entail trade-offs and may have diverging effects on economic, social, and environmental sustainability. OBJECTIVESThis study assessed the ex-ante effects of incentives targeted towards increasing crop production on the production and consumption decisions of farm households on the Saïss plain of northern Morocco. METHODSThe assessment was conducted with a dynamic, intertemporal farm household model that simulates farm production and food consumption decisions. The model was calibrated using survey data from 85 farm households for 2014. Four scenarios were codesigned with local stakeholders and then simulated over a continuous 15-year period to capture rainfall variability: (1) increased availability of annual groundwater for irrigated cropping from 31 m3 ha−1 to 215 m3 ha−1, (2) a 15% increase in grain prices for cereals and legumes, (3) introduced drought tolerant crop varieties, and (4) a fourth scenario that combines all factors in the above three scenarios. RESULTS AND DISCUSSIONOur results showed that regardless of the scenario, the area of cereals and legumes cultivated only slightly changed compared to the Baseline scenario. However, according to the scenarios tested, the total production of cereals increased by 10% to 21% and of legumes increased by 2% to 9%. This production increase is the direct consequence of increased crop yields due to an intensification of crop production methods. The incentives increased the consumption of cereals and legumes by up to 43%. This increase was mainly due to a shift from grain to vegetable production that increases cash income, resulting in more food purchases from the market while consumption from own production dropped by up to 53%. The average increase in crop income was 14% in scenarios 1–3 and 28% in scenario 4. However, increased income had ramifications for nature resource stocks, with irrigation water use from groundwater increasing by 593% in the Water scenario and 320% in the combined scenario, relative to the Baseline scenario. In the Water scenario, incomes increased by 15% and nitrogen leached increased by 36%, highlighting the trade-off between economic and environmental sustainability. SIGNIFICANCEThese results show the challenges in obtaining acceptable compromises between the three sustainability pillars as the scenarios increased income but also led to increased groundwater extraction and nitrate leaching.

A Crossed Analysis of Participations in Labor and Grain Markets: Evidence from Malawi

Abstract This study contributes to the literature on the identification of factors shaping the decision to participate in the grain market in Africa. Unlike previous studies, we introduce labor market participation into the farm household model to highlight heterogeneities in decision making. Empirically, we rely on an extension of Heckman's approach and introduce control functions to mitigate endogeneity issues related to the adoption of agricultural technologies. We find that limited access to transportation infrastructure, by discouraging the supply of grain, constrains households to experience an excess of labor; price incentives may have a reverse effect on the choice of market regimes, even though the effect on production may be positive for households that are already participants. We also show that farmers' responses to grain prices are not sensitive to their labor market position. The use of agricultural technologies encourages cereal production and employment of external agricultural labor. This study thus provides a better targeting when designing policies promoting marketing and rural employment.

Agricultural resource and risk management with multiperiod stochastics: A case of the mixed crop-livestock production system in the drylands of Jordan

Generally, agricultural production involves several challenges. In the drylands, it is further complicated by weather-related risks and resource degradation. In this paper, we present a case study of the mixed crop-livestock production system in Jordan. To better capture the nature of response farming in the drylands, we develop a methodology for using crop simulation models to directly generate data for optimizing production practices of an integrated crop-livestock producing household in a dynamic stochastic context. The approach optimizes producer’s adaptations to random events, such as weather, which are realized throughout the planning horizon. To ensure the sustainability of the optimized production decisions, long-term valuations of end of horizon soil attributes are included in the objective function. This approach endogenizes the tradeoff between short-and long-run productivity. Model results show that due to the limited natural resource endowments and financial liquidity constraints of the typical farm households in the study area, we find these households have limited options. To optimally respond to weather conditions during the production season, better manage risk, and achieve improvements in soil attributes, a typical household would need larger farm size, larger flock, and better financial liquidity than it currently commands. Like all such models, the farm household model used in this paper is not suitable for drawing policy implications. Therefore, targeted analysis using appropriate sectoral or economy-wide models will be needed in the future to identify and test the efficacy of different policy and institutional interventions including land consolidation, establishment of producer and marketing cooperatives, access to financial services including agricultural credit, and crop insurance in expanding the resource base of farmers—thereby positioning them for higher earnings, ensuring soil conservation, and enhancing the sustainability of the production system.

Off-farm work and rural residential energy transition: a farm-household model and empirical evidence from China

PurposeThis paper aims to examine the role of off-farm work in the rural residential energy transition in China.Design/methodology/approachTo guide this empirical work, the authors present a simple farm-household model to explain rural energy consumption. The authors then empirically assess three main mechanisms through which off-farm work can speed up energy transition in rural China using panel data methods.FindingsThe study shows that income growth from off-farm work can reduce the consumption of traditional biomass energy and facilitate a shift to commercial energy. The losses of labor available for on-farm production raise the shadow price of non-tradable biomass energy and further dampen the demand for traditional biomass energy. More importantly, the authors find that working in service sectors can significantly promote the consumption of commercial energy by rural households. The sectoral exposure effect indicates that a new working environment may influence rural households' energy preferences and thus accelerate the transition away from traditional biomass energy.Originality/valuePrevious studies focus mainly on the income effect of off-farm work on rural energy consumption. The authors first identify three related but essentially different effects of off-farm work on rural energy transition in China. This study provides new insights into the process of energy consumption transition in rural China.

Eucalyptus Succession on Croplands in the Highlands of Northwestern Ethiopia: Economic Impact Analysis Using Farm Household Model

The northwestern highlands of Ethiopia are characterized by severe land degradation and apparently low agricultural productivity. This situation is continuously threatening the livelihoods of smallholder farmers who mainly sustain their living from the cultivation of annual crops. In recent years, however, smallholder farmers have started converting their croplands to plantations of Eucalyptus, a non-native tree species to Africa, for its rewarding economic contributions. In this study, we aggregated data from 388 smallholder Eucalyptus growers located in three agroecology zones (onwards called farm typologies). We measured the economic impact of Eucalyptus succession on croplands using a farm household model which is provided in the GAMS (General Algebraic Modeling System) platform. The results of the model varied between farm typologies and showed that households’ gross margins increased with a corresponding increase in the conversion of croplands. Results also showed that gross margins from plantations of Eucalyptus were higher than that of cultivation of food crops. Furthermore, evaluation of farm portfolios indicated a higher benefit-cost ratio (BCR) for the plantation of Eucalyptus. We concluded that the conversion of croplands in the study area is an incentive-driven process in a dynamic farming system, which strongly demands bringing policy-emanated livelihood alternatives. With this arena, the expansion of Eucalyptus is recommended for lands of terrain features, high marginality and low suitability for the cultivation of food crops and setting aside fertile arable lands. We generalized that an increase in Eucalyptus plantation pays off given the implementation of proper land resource management and the apparent impacts of Eucalyptus on biodiversity and cultural landscape is managed with sustainability perspectives. However, it demands collaborative policy efforts that can especially meet socioeconomic, environmental and public interests.

Risk perception, farmer−herder conflicts and production decisions: evidence from Nigeria

AbstractThis paper investigates the influence of the risk perception of farmer−herder (FH) conflicts on rural households’ production decisions. Extending the farm household model to include the risk perception of farmer−herder conflicts, we test hypotheses derived using primary data from 401 rural households in Nigeria. Results indicate that higher risk perception of FH conflict reduces fertiliser use and increases the time allocated for farm work. Dividing households based on their risk aversion, we find that risk-averse households rent-in significantly less cropland compared to risk-taking households. Findings highlight the need for policies that sustainably tackle FH conflicts for improved agricultural production.

Off-farm income and direct payments—an indispensable diversification strategy of Swiss farmers

Abstract Following the theory of a farm household model, the relations between farm and farmer characteristics, including two different kinds of direct payments, and their effects on the off-farm labour allocation decisions of farm operators were analysed. Swiss farm accountancy data network (FADN) data of the years 2017, 2018, and 2019 for the whole sample and two different income groups were used to model both off-farm labour participation and supply decisions. The results show that diversification into off-farm employment is a highly relevant strategy of Swiss farmers and that direct payments are a complementary income source. Above a certain level, biodiversity payments show a substitution effect, meaning that off-farm participation is reduced. Off-farm labour supply is related not to direct payments but to production type and technology, with dairy and organic farmers having spent fewer days engaging in off-farm employment. Education positively correlates to off-farm labour participation. Even though off-farm income and direct payments are an indispensable income source for Swiss farmers, income-related policy goals cannot be considered achieved in terms of either farm or household income. Whether public money would be better spent on education than on unprofitable farm businesses should be analysed in future studies.

Pendekatan Sosioekonomi Pertanian Berkelanjutan

Sustainable agriculture is an alternatif choice to replace the unwise west type agriculture with high chemical input, but the strategy and the technology to be implemented is not ready due to the varied environment. Sustainable agriculture should consider four aspects i.e. ecology/technology, financial/economic, human! institution, and combined. The problem of natural resource and environment in Indonesia is the consequence of several trends, like population growth, deforestation for expanding agricultural land, rapid economic growth in the last three decades, over centralized development planning, and focusing economic development in Java. The dilemma between economic growth and degradation of natural resource base is not always a problem. There should be a new paradigm in the approach of the agricultural development to be long term approach considering to synchronize the conservation of natural resources and the economic development. The new paradigm of the synchronized growth and environment needs to lower the population growth, to maintain the production increase, to lessen the environment impact, to change the human perception, to respect the ecosystems integrity, and to optimize the complementary effects to environment improvement and socioeconomic development. Farming System Development and Farming System Research as holistic approaches are expected can be used to facilitate the production objective and the natural resource conservation objective in agricultural development Simulation model on each agroecological as well as socioeconomic zone can be developed on a farm-household model Key words: Socioeconomic, sustainable agriculture, conservation of natural resource

Agricultural Resources and Trade Strategies: Response to Falling Land-to-Labor Ratios in Malawi

This study assesses how growing land scarcity relative to family labor is influencing farm household decisions to trade in agricultural land and labor markets to improve their livelihood. Using the farm household model, I analyze decisions to rent-in land or hire out labor among smallholders in Malawi. I use data from two rounds of a nationally representative balanced-household panel and apply a systems approach to jointly estimate land rental and labor market decisions while controlling for simultaneity and unobserved heterogeneity. The results indicate that the falling owned-land-to-labor-endowment ratio can push households to participate in either land rental or seasonal agricultural labor markets. However, the probability of hiring out labor for casual work and short-term gains decreases when potential tenant households rent-in land. Based on asset-wealth-to-labor-endowment ratios, wealthier households are more likely to rent-in land while poorer households, including most smallholder households, are more likely to hire out labor. These results suggest higher friction in the land rental market compared to the agricultural labor markets and liquidity constraints dictating what is necessary to support agricultural operations and household needs. Accordingly, agricultural policy in Malawi should aim to reduce friction in factor markets.

Livestock as an indicator of socioeconomic changes in Medieval Prague (Czech Republic)

The continuity of occupation at the settlement of Prague, Czech Republic, from the ninth to fourteenth centuries makes it a good case study for investigating the evolution of animal husbandry practices during the Early and High Middle Ages. Previous archaeozoological work shows that people’s dietary behaviour in Prague underwent a transformation at the beginning of the High Middle Ages (thirteenth century). This change has been attributed to large-scale socioeconomic transformations, which may have affected animal management practices. Stable carbon (δ13C) and nitrogen (δ15N) isotope analysis of the tooth dentine collagen of livestock (cattle, domestic pigs, sheep and goats) from three different areas in Prague (the Lesser Town, Prague Castle and the Old Town) presented in this study provides support for this hypothesis. The range of stable isotope values increased over time, which may, in addition to a farm-household model, indicate a more advanced system of livestock supply–for example, through urban markets–and may also be explained by more diversified breeding conditions in the town and its surroundings. The results show an increase in the δ15N values in pig diet over time and suggest that their management changed. This difference may have been caused by increased animal protein intake or higher δ15N value of the dietary sources. It has also been corroborated that the root dentine collagen of High Medieval cattle has slightly higher average δ15N values when compared to cattle from the earlier period, which could be related to gradual changes in landscape utilization and soil processing, such as fertilization.

Revisión Sistemática: análisis de la biodiversidad en las economías rurales mediante el modelo de hogares agrícolas y recomendaciones para futuros reportes

The Farm-Household models have been used to analyze ex-ante different policies; however, the state of the art is unknown in relation to the evaluation of biodiversity within these models. For this reason, a systematic review on Farm-Household models that integrate the “biodiversity” variable is required. For this purpose, we consulted a specialized search engine, applying a generic search strategy, which identified 1420 articles, of which only 23 were selected based on specific inclusion criteria. There is a gap in the evaluation of biodiversity within Farm-Household models.

Responding to future regime shifts with agrobiodiversity: A multi-level perspective on small-scale farming in Uganda

We analyse the impact of two large-scale regime shifts caused by disease incidence or climate change, and associated crop productivity and price changes, on banana-based smallholders in Uganda. We evaluate these farmers' vulnerability and assess the potential of using increased crop diversity to improve their resilience. We further explore trade-offs and synergies between environmental, economic and nutritional outcomes faced by the farmers in their decision making when a regime shift occurs. We simulate the large-scale scenarios with the IMPACT model and use the results obtained to assess their effect at the local level using the bio-economic farm-household model, FarmDESIGN.Our results indicate that climate change can lead to a regime shift that expands revenue variance, increases soil erosion and reduces vitamin A yield for farmers. Banana disease can negatively impact income levels and species diversity. We show that under both scenarios farmers have scope to reconfigure their farms and recover farm performance. Specifically, we discuss the benefits of species diversity; increasing agrobiodiversity by adding new crops increases the farm's adaptive capacity and resilience, allowing for much higher revenues, on-farm crop diversity and vitamin A production.The conceptual approach and the method we developed can be applied to assess the local synergies and trade-offs between crop diversity conservation, nutrition, environmental protection and human nutrition that farmers face as a result of global drivers. Our results offer a further understanding of how biodiverse systems respond to regime shifts, which can inform effective policy design. Our method can be also useful to help farmers manage their farms in a way to better meet their complex needs.

Examining the Effect of Animal Resource Scarcity on Farm Labor and Farm Production in Northern Ethiopia

AbstractRural households in Ethiopia suffer from the scarcity of grazing land and water. This article examines the economic impact of time spent looking for water and grazing lands for livestock on crop farming labor and crop output based on a nonseparable farm household model. We estimated a general Cobb-Douglas production function using 518 farmers in Ethiopia. Our results confirm a negative relationship between labor input to crop farming and resource scarcity. On average, a 1% reduction in the time spent looking for water, grazing, and straw led to an increase in food production by 0.16%, 0.28% and 0.33%, respectively.

Exploring solution spaces for nutrition-sensitive agriculture in Kenya and Vietnam

Smallholder agriculture is an important source of livelihoods in South Asia and sub-Saharan Africa. In these regions the highest concentrations of nutritionally vulnerable populations are found. Agricultural development needs to be nutrition-sensitive, and contribute simultaneously to improving household nutrition, farm productivity and environmental performance. We explored the windows of opportunities for farm development and the potential of crop diversification options for meeting household dietary requirements, whilst concurrently improving household economic performance in contrasting smallholder farm systems in Kenya and Vietnam. Farm and household features and farmer perspectives and priorities were integrated into a farm-household model that allowed quantification of a diverse set of nutritional, labour and productive indicators. Using a multi-objective optimization algorithm, we generated ‘solution spaces’ comprising crop compositions and management configurations that would satisfy household dietary needs and allowed income gains. Results indicated site-specific synergies between income and nutritional system yield for vitamin A. Diversification with novel vegetables could cover vitamin A requirements of 10 to 31 extra people per hectare and lead to greater income (25 to 185% increase) for some households, but reduced leisure time. Although the Vietnamese sites exhibited greater nutrient system yields than those in Kenya, the household diets in Kenya had greater nutrient adequacy due to the fact that the Vietnamese farmers sold greater proportions of their on-farm produced foods. We conclude that nutrition-sensitive, multi-method approaches have potential to identify solutions to simultaneously improve household income, nutrition and resource management in vulnerable smallholder farming systems.

Interlinking dietary diversity, production diversity, and climate change: Non-separable farm household model approach

Interlinking dietary diversity, production diversity, and climate change: Non-separable farm household model approach

A model-based exploration of farm-household livelihood and nutrition indicators to guide nutrition-sensitive agriculture interventions

Assessing progress towards healthier people, farms and landscapes through nutrition-sensitive agriculture (NSA) requires transdisciplinary methods with robust models and metrics. Farm-household models could facilitate disentangling the complex agriculture-nutrition nexus, by jointly assessing performance indicators on different farm system components such as farm productivity, farm environmental performance, household nutrition, and livelihoods. We, therefore, applied a farm-household model, FarmDESIGN, expanded to more comprehensively capture household nutrition and production diversity, diet diversity, and nutrient adequacy metrics. We estimated the potential contribution of an NSA intervention targeting the diversification of home gardens, aimed at reducing nutritional gaps and improving livelihoods in rural Vietnam. We addressed three central questions: (1) Do ‘Selected Crops’ (i.e. crops identified in a participatory process) in the intervention contribute to satisfying household dietary requirements?; (2) Does the adoption of Selected Crops contribute to improving household livelihoods (i.e. does it increase leisure time for non-earning activities as well as the dispensable budget)?; and (3) Do the proposed nutrition-related metrics estimate the contribution of home-garden diversification towards satisfying household dietary requirements? Results indicate trade-offs between nutrition and dispensable budget, with limited farm-household configurations leading to jointly improved nutrition and livelihoods. FarmDESIGN facilitated testing the robustness and limitations of commonly used metrics to monitor progress towards NSA. Results indicate that most of the production diversity metrics performed poorly at predicting desirable nutritional outcomes in this modelling study. This study demonstrates that farm-household models can facilitate anticipating the effect (positive or negative) of agricultural interventions on nutrition and the environment, identifying complementary interventions for significant and positive results and helping to foresee the trade-offs that farm-households could face. Furthermore, FarmDESIGN could contribute to identifying agreed-upon and robust metrics for measuring nutritional outcomes at the farm-household level, to allow comparability between contexts and NSA interventions.

The impacts of trade and self‐sufficiency policies on heterogeneous rice farms in Malaysia

AbstractThis paper develops a farm household model of heterogeneous Malaysian rice farmers. The model determines the domestic price of milled rice in equilibrium. The model is simulated to analyze the effects of free trade, self‐sufficiency achieved through trade policy, and the impact of free trade and self‐sufficiency when rice productivity expands. The ex ante results for free trade predict that total rice supply rises as the increase in imports offsets the decrease in domestic production, causing the domestic price of milled rice to fall by 15.8 percent. While this price decrease generates negative income effects for rice farmers, it leads to an expansion of consumption of milled rice by both the farm and urban populations. The results for self‐sufficiency through heightened tariffs predict that production for domestic rice farmers increases. However, with fewer imports, total rice supply falls, causing the domestic price of rice to increase by 41.5 percent. Because free trade is politically unfeasible and trade‐driven self‐sufficiency policies contract total rice consumption, boosting rice production through research and development is an effective way for Malaysia to increase the total supply of rice while limiting its dependence on imports.

Is there any chance for the poor to cope with extreme environmental events? Two case studies in the Solomon Islands

Our paper analyses the patterns and factors that explain households’ responses to extreme environmental events (EEEs) in two case studies of indigenous communities in the Solomon Islands. We used the ethnographic approach to describe the case studies and carried out thematic analysis to disentangle the factors that explain such responses. The first case was that of a rural community from Ranogha Island in the Western Province that was hit by the Tsunami of April 2007; the second was of a community settled in an informal development on a flood-prone area in peri-urban Honiara that was hit by a flash flood in April 2014. Drawing from the villagers’ experiences, we found that aid and support from family and community, referred to by the respondents as the “wantok” system, was key to recovering from the disasters. Many respondents identified climate change as one leading factor that explained such catastrophic events. The social cooperation system, the government’s role in responding to catastrophes and household net worth were identified among the main components of household responses. These constitute an effective engine to build palliative and preventive responses against catastrophic events and climate change risks. In spite of the extreme poverty observed, and the lack of government assistance, we conclude that amenities obtained from the community (through the wantok system) and household net worth (including the availability of common pool resources) enabled them to cope with the catastrophes. These factors are critical for long-term adaptation to EEEs and climate change risks. The community responses analysed with thematic analysis showed to be consistent with the conceptualization led by a farm-household model, and the household net worth as a source of income appears to be the correct measure of wealth instead the level of income in these less monetarised communities. Learning from how these communities and households responded to such EEEs provides evidence on how other communities could successfully adapt to increasing climate change risks.

Estimating the economic incentives necessary for eliminating child labor in Ghanaian cocoa production.

Concerns about the use of child labor in West African cocoa production became widespread in the early 2000s in many high-income countries. In 2015 in Ghana, 91.8% (or a total of 878,595) of the children working in the cocoa sector were involved in a form of hazardous work. Child labor in cocoa production is not just a symptom of poverty but also a contributing factor, as children often forgo a formal education to work in cocoa orchards. Current Ghanaian law prohibits child labor, but, with many cocoa households living in poverty, child labor becomes a necessity for survival, and as such, current child labor laws are rarely enforced. Therefore, an effective policy that eliminates child labor could compensate farmers by providing an economic incentive. In this paper, we develop and calibrate a farm household model to estimate the cocoa price premium necessary to eliminate child labor from cocoa production while leaving the farm household welfare unchanged. This welfare-neutral price premium removes the negative effects of eliminating child labor for the farm household. Varying degrees of child labor exists, with certain forms posing a greater risk to children’s wellbeing. The results show that eliminating the worst forms of child labor would require a cocoa price premium of 2.81% and eliminating regular work (non-hazardous work but over the maximum hours allowed for a child) and the worst forms would require an 11.81% premium, which could be paid for by the well-established Ghanaian Cocoa Marketing Board. An incentive for the Cocoa Marketing Board to pay the price premium and monitor and enforce this policy would be the ability to differentiate their cocoa as child-labor free and not lose market share to countries who cannot currently certify this practice.