Poor Farm Households Research Articles

Evaluating the distributional impacts of drought-tolerant maize varieties on productivity and welfare outcomes: an instrumental variable quantile treatment effects approach

ABSTRACT In an attempt to go beyond the conventional mean impact assessment of agricultural interventions, this paper examines the distributional impacts of adoption of drought-tolerant maize varieties (DTMVs) on the productivity and welfare outcomes of rural farming households in Nigeria. The study employed a conditional instrumental variable quantile treatment effects approach to control for selection bias that may arise from both observed and unobserved factors. The empirical findings revealed that adoption significantly impacts the distributions of maize yield and farming households’ welfare. In particular, the effects of adoption are larger at the lower tails of the distributions of yield and welfare outcomes, suggesting that the strategic roles of DTMVs adoption in raising productivity and reducing poverty are better among poor farming households. These findings emphasize that effective targeting and dissemination of improved agricultural technologies are critical for increasing maize yield and improving welfare outcomes of rural farmers in Nigeria. Policy measures targeted at tackling dissemination constraints, such as the promotion of informal seed sector, may help enhance the successful dissemination and adoption of DTMVs or any agricultural intervention without masking out any sub-groups.

Distributional Impacts of Weather and Climate in Rural India

Climate-related costs and benefits may not be evenly distributed across the population. We study distributional implications of seasonal weather and climate on within-country inequality in rural India. Utilizing a first difference approach, we find that the poor are more sensitive to weather variations than the non-poor. The poor respond more strongly to (seasonal) temperature changes: negatively in the (warm) spring season, more positively in the (cold) rabi season. Less precipitation is harmful to the poor in the monsoon kharif season and beneficial in the winter and spring seasons. We show that adverse weather aggravates inequality by reducing consumption of the poor farming households. Future global warming predicted under RCP8.5 is likely to exacerbate these effects, reducing consumption of poor farming households by one third until the year 2100. We also find inequality in consumption across seasons with higher consumption during the harvest and lower consumption during the sowing seasons.

Technology adoption and household food security among rural households in South Africa: The role of improved maize varieties

This study aimed to assess the impact of adoption of improved maize varieties on household food security among smallholder farmers in KwaZulu-Natal, South Africa. A sample of 415 maize producers was analysed using the propensity score matching method, the treatment effect model and the Tobit selection model. The results were consistent across the models, indicating that improved maize varieties positively increased household food security, and that the impact of adoption differed according to the adoption level and socio-economic characteristics of the farmers. The results showed that an additional 1 ha of land under improved maize varieties increases annual food expenditure per capita levels by over R4000. Female farmers were more likely to adopt improved maize varieties, and spent more to ensure household food security, and benefitted more from adoption, than their male counterparts. The findings suggest that policies that seek to increase the land under improved maize varieties among smallholder farmers, especially female farmers who are the majority of these farmers, can play a significant and positive role in increasing the levels of household food security in South Africa through technological innovations. The study recommends that policy makers should aim to facilitate the dissemination of less costly improved seed varieties, target female farmers, and improve their access to information to improve the adoption of technological innovations and food security among the poor farming households in South Africa.

Social Capital and Household Welfare: A Review of Contemporary Empirical Literature

Most studies on social capital especially in Africa, have adopted econometric models in explaining its role in the different developmental paths of societies with similar endowments. From a historical perspective, relying on aggregative national survey data on social welfare, ‘wellbeing’, ‘national happiness index’ to an examination using increasingly structured proximate measures of formal community organisational activities, in particular, membership participation and benefits and their impact on the rural household welfare, almost to the exclusion of informal social capital. Although the influence of technology, especially with the increasing penetration, access and massive impact of the social media have stimulated further research interest in social capital, particularly in Europe and America, econometric modeling and analytical techniques still dominates, while most African researchers have been more interested in how formal social capital impact the welfare of the poor rural farming households as a way to develop rural communities. This paper argues, following an extensive review of the literature that the fixation with ‘econometric analysis’ and ‘formal social capital’, presents only a partial view - it does not explain the significant role of informal social capital - resources that inhere in informal, yet durable social networks and relations that characterise the community social structure and are encapsulated in its social history. The paper further opines that greater attention should be given to the role of informal social capital in rural household welfare enhancement towards creating a structured role for kinship based groups in the development process, stripping them of the ‘negative’, ‘anti-development’ toga and optimise their potential capacity for mobilisation of rural poor households for active participation in the design and implementation of pro-poor policies and schemes. It would also help redirect research efforts and provide the much-needed evidence for realistic policies especially on ‘bottom-up’, community participatory implementation strategy for developing rural communities.

THE IMPACT ANALYSIS OF RISING FOOD PRICES ON FARMER’S WELFARE IN EAST JAVA

Agriculture is one of the important contributor sectors to the implementation of sustainable economic growth, especially in East Java. Apart from absorbing a large portion of the workforce, agriculture is also a sector that drives other sectors such as trade, especially for food products. However, the increase in food prices is often a polemic in the community which is very detrimental to households. This study aims to analyze the function of household food consumption demand in East Java using the Quadratic Almost Ideal Demand System (QUAIDS) and Compensating Variation approaches to identify the impact of price changes on changes in household welfare in East Java, especially in farmer households. The data used in this study were obtained from the Indonesian Family Life Survey (IFLS) in 2000, 2007, and 2014. The results showed that consumption of various food commodities in the form of staple foods, fruits and vegetables, sugar, oil, milk, meat will be greatly affected by changes in prices, expenditure/income, and household demographic characteristics. The results of price and expenditure elasticity vary between household groups. Based on the analysis of changes in welfare, due to the increase in food prices, in general, households in East Java will experience a decrease in welfare. However, the decline for poor rural households and farming households is lower than for urban poor households and non-farmer households. The regional government of East Java province is expected to encourage and optimize the role of the agricultural sector to achieve sustainable household welfare in general and farmers in particular.
 JEL: D11, D60, E31, Q11

Analyzing Influencing Factors of Rural Poverty in Typical Poverty Areas of Hainan Province: A Case Study of Lingao County

Rural poverty and poverty reduction are not only the focal issues that have attracted worldwide attention, but also the vital issues on people’s livelihood that has attached great importance and aimed to be solved by the central and local governments of China. Based on the survey data of 354 farming households, this paper, taking the national poverty county of Lingao County, Hainan Province for an example, examined the characteristics of rural poverty of the county. Moreover, this paper established the spatial lag model (SLM) from five dimensions, namely, status of the household head, household structure, health status, income composition and traffic accessibility, to analyze the main influencing factors of rural poverty according to the values of Moran’s I and the diagnosis of spatial dependence of the OLS model. It is found that the poor farming households gathered mainly in five towns in the north and southwest of the county, and the rural poverty have the characteristics of low educational level of the heads, more minor children, high population of farming peasants, high incidence of disease and low proportion of household wage-equivalent income. The results also showed that the variables such as the number of minor children, the number of migrant worker, the number of farming peasants and the proportion of wage-equivalent income have significant effectiveness on rural poverty, while the status of the household head, health status and traffic accessibility have little influence. It is an important way to realize the goal of poverty alleviation by controlling the number of farmers’ fertility, strengthening the vocational skills training of farmers, vigorously developing specialization and large-scale agriculture and increasing the employment opportunities of farmers.

Economic impacts of fertilizer micro-dosing in the production of underutilized indigenous vegetables in south west Nigeria: an ex-ante approach

Optimum application of fertilizers to address low productivity of soils and reduce the quantity and the cost of fertilizer incurred by farmers is a major concern in enhancing the yield of underutilized indigenous vegetables (UIVs). This study analyzed the potential economic potential benefits of adoption of fertilizer micro-dosing by resource poor farming households in southwest Nigeria using primary and secondary data from baseline survey of farmers, consumers and scientists involved in UIV production in the study area. Using economic surplus model, the size and distribution of potential economic benefits of the innovation were determined quantitatively as producer and consumer surplus in a partial equilibrium framework. Both net returns and sensitivity analyses were also conducted to assess the stability of the results. Investment in the innovation in production of the UIVs is economically viable with 32-50% returns achieved at expected adoption rate of 25%. Sensitivity analysis shows that the results were robust to changes in basic parameters. Farmers and consumers of UIVs benefit from the innovation due to the reduction in the cost of fertilizer used as well as price of UIVs, respectively. The findings support the sustainability of investment in fertilizer micro-dosing in producing UIVs.

Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania

Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008–2013. Temperature shocks have a negative and significant impact on household growth if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households, at least in the short run. Crop yields and total factor productivity in agriculture are the main transmission channels. Extrapolating from short-term elasticities to long-run phenomena, these findings support the Schelling Conjecture: economic development would help poor farming households to reduce the impacts of climate change. Hence, closing the yield gap, modernizing agriculture and favouring the structural transformation of the economy are all crucial issues for adaptation of farmers to the negative effects of global warming.

Varietal seed technology and household income of maize farmers: An application of the doubly robust model

The study uses a sample of 962 maize-farming households to examine the effects of a varietal maize seed technology on annual household incomes of rural poor farming households in the Upper West region of Ghana. An approach that combines the regression adjustment method with weighting to estimate the treatment parameters was employed for the study. The approach is a generalization of the doubly robust estimation methods for different treatment parameters, which are defined in a multivalued treatment effect estimation framework. Doubly robust methods combine weighting and regression methods to produce consistent estimates of the treatment parameters even if one of the models is misspecified. Average gains in annual household income are estimated for the entire population, as well as conditional on having a specific varietal seed technology (i.e., pannar and/or Obatanpa). Results from the study show that the pannar varietal maize seed technology significantly increased the annual household incomes of the selected maize-farming households. Thus, the study recommends that safety net policies should generally pay more attention to the factors that allow increased maize production technology adoption by maize-farming households, since they could then build on existing pattern of increasing maize productivity whilst alleviating rural poverty.

Smallholder Agricultural Production Efficiency of Adopters and Nonadopters of Land Conservation Technologies in Tanzania

Promotion and supporting the adoption of land management and conservation technologies (LMCTs) among poor farming households has been considered to improve crop yields as well as production technical efficiency (TE). This article compares production efficiency between adopters and nonadopters of LMCTs in Tanzania. Using national panel data, the study applied stochastic frontier model to estimate the TE of adopters and nonadopters. The findings show that adopters of LMCTs had a relatively significantly higher TE (0.73) than their nonadopter counterparts (0.69). Therefore, promotion and supporting the adoption of LMCTs among smallholder farmers is pertinent for improving their TE as well as for increasing crop yield, thereby reducing encroachment into forest areas. There is also a need to understand how adopters and nonadopters of LMCTs are affected by different factors when designing the policies that promote the adoption of LMCTs among the smallholder farmers for sustainable increase of agricultural productivity and TE.

Who benefits from which agricultural research-for-development technologies? Evidence from farm household poverty analysis in Central Africa

It remains a challenge for agricultural research-for-development (AR4D) institutions to demonstrate to donors which technologies contribute significantly to poverty reduction due to a multitude of impact pathways. We attempt to overcome this challenge by utilizing the potential outcomes framework and quantile treatment effects analytical approaches applied on panel household data collected from Central Africa. Our findings show that adoption of AR4D technologies reduced the probability of being poor by 13 percentage points. A large share of this poverty reduction is causally attributable to adoption of improved crop varieties (32%) followed by adoption of post-harvest technologies (28%) and crop and natural resource management (26%), with the rest 14% attributable to unidentified and/or unmeasured intermediate outcomes or factors. The findings further indicate that relatively poor farm households benefit from adopting improved crop varieties more than the relatively better-off households. Correspondingly, the relatively better off households benefit from adopting post-harvest technologies enhancing crop commercialization much more than the relatively poor households. The findings reveal interesting policy implications for successful targeting of agricultural interventions aimed at reducing rural poverty.

ANALISIS LAPORAN KEUANGAN HASIL PENGELOLAAN DANA PENGEMBANGAN USAHA AGRIBISNIS PERDESAAN (PUAP) (Kasus di Gapoktan Srijaya Sari Kecamatan Sukahening Kabupaten Tasikmalaya)

Rural Agribusiness Development Program (PUAP) implemented by the farmers (owners or tenants), farm laborers and poor farm households through coordination diperdesaan Gapoktan as an institution that is owned and managed by farmers. Gapoktan important role as a social institution peasant economy to be important in increasing production and the welfare of farmers. Given the role of the performance evaluation results gapoktan need to be input in developing Gapoktan development model so that it can better contribute in accelerating the improvement of the welfare of farmers, the growth of the agricultural sector and economic development of rural areas. The purpose of this research was to determine results financial statement analysis Gapoktan Srijaya Sari subdistrict Sukahening using Financial Ratios through Ratios Profitability who aim to measure the ability Gapoktan Srijaya Sari to generate profit, by using an approach on the calculation of Return On assest (ROA) and Return On Equity (ROE).Results in mind that the results of Financial Statement Analysis Rural Agribusiness Development (PUAP) which has been managed by Gapoktan Srijaya Sari subdistrict Sukahening has shown a number of very good because it has to generate profits for the group union. This is evident from the results with regard Profitability Ratios ROA calculation results (Renturn on Assets) amounted to 16.01% and ROE (ReturnOn Equity) amounted to 25.27%.

Productivity effects and natural resource management: econometric evidence from POSAF‐II in Nicaragua

Understanding how natural resource management (NRM) technologies impact agricultural productivity is essential in order to ensure that policies designed to reduce environmental degradation and alleviate poverty are successful. In this paper, we analyze the impact of natural resource technologies delivered by the Socio‐environmental and Forestry Development Programme‐II (POSAF‐II) in Nicaragua. Using cross‐sectional data for 1,201 farmers (475 beneficiaries, 726 control farmers), we provide empirical evidence concerning the effects of a NRM programme on two critical components of productivity: technological change (TC) and technical efficiency (TE). We use propensity score matching (PSM) to mitigate potential biases from observable variables and a recent stochastic production frontier (SPF) model that addresses sample selection bias arising from unobservable variables. Our results show that POSAF‐II has had a positive impact on the two dimensions of productivity analyzed, i.e., TC and TE. This study contributes to the literature on impact evaluation by showing how an intervention designed to improve NRM can also enhance the income of poor farm households through increases in productivity.

Agricultural intensification scenarios, household food availability and greenhouse gas emissions in Rwanda: Ex-ante impacts and trade-offs

Rwanda's agricultural sector is facing severe challenges of increasing environmental degradation, resulting in declining productivity. The problem is likely to be further aggravated by the growing population pressure. A viable pathway is climate smart agriculture, aiming at the triple win of improving food security and climate change adaptation, while contributing to mitigation if possible. The Government of Rwanda has initiated ambitious policies and programs aiming at low emission agricultural development. Crop focused policies include the Crop Intensification Program (CIP) which facilitates access to inorganic fertilizer and improved seeds. In the livestock subsector, zero-grazing and improved livestock feeding are encouraged, and the Girinka program provides poor farm households with a crossbred dairy cow. In this study, we aimed at assessing the potential impact of these policy programs on food availability and greenhouse gas (GHG) emissions of 884 households across different agro-ecologies and farming systems in Rwanda. Household level calculations were used to assess the contribution of current crops, livestock and off-farm activities to food availability and GHG emissions. Across all sites, 46% of households were below the 2500kcalMAE−1yr−1 line, with lower food availability in the Southern and Eastern Rwanda. Consumed and sold food crops were the mainstay of food availability, contributing between 81.2% (low FA class) to 53.1% (high FA class). Livestock and off-farm income were the most important pathways to higher FA. Baseline GHG emissions were low, ranging between 395 and 1506kg CO2e hh−1yr−1 per site, and livestock related emissions from enteric fermentation (47.6–48.9%) and manure (26.7–31.8%) were the largest contributors to total GHG emissions across sites and FA classes. GHG emissions increased with FA, with 50% of the total GHG being emitted by 22% of the households with the highest FA scores. Scenario assessment of the three policy options showed strong differences in potential impacts: Girinka only reached one third of the household population, but acted highly pro-poor by decreasing the households below the 2500kcalMAE−1yr−1 line from 46% to 35%. However, Girinka also increased GHG by 1174kg CO2e hh−1yr−1, and can therefore not be considered climate-smart. Improved livestock feeding was the least equitable strategy, decreasing food insufficient households by only 3%. However, it increased median FA by 755kcalMAE−1yr−1 at a small GHG increase (50kg CO2e hh−1yr−1). Therefore, it is a promising option to reach the CSA triple win. Crop and soil improvement resulted in the smallest increase in median FA (FA by 322kcalMAE−1yr−1), and decreasing the proportion of households below 2500kcalMAE−1yr−1 by 6%. This came only at minimal increase in GHG emissions (23kg CO2e hh−1yr−1). All policy programs had different potential impacts and trade-offs on different sections of the farm household population. Quick calculations like the ones presented in this study can assist in policy dialogue and stakeholder engagement to better select and prioritize policies and development programs, despite the complexity of its impacts and trade-offs.

A comparative assessment of the poverty impacts of pond and cage aquaculture in Ghana

Aquaculture is being promoted for poverty reduction in Low Income Countries. Theoretically, aquaculture can impact poverty directly by increasing income and food security of poor fish farming households, and indirectly by generating food and economic growth. However, there is limited empirical evidence of aquaculture significantly impacting poverty, especially in sub-Saharan Africa. The emerging paradigm in aquaculture development argues that indirect poverty impacts from commercial small and medium enterprises (SMEs) are greater than direct poverty impacts on small-scale producers. This paper assesses the potential poverty impacts of small-scale pond aquaculture and SME cage aquaculture in Ghana, comparing the relative significance of their direct and indirect impacts. Non-poor small-scale pond fish farmers who have been trained and/or use better management practices (BMPs) (termed fish farming type A) are found to hold the most potential to impact poverty indirectly through generating economic growth. These indirect impacts are higher than the direct impacts on poor small-scale fish farmers and the indirect impacts from SMEs. The findings support the current move away from a narrow focus on poor producers. However, it is unclear whether the arguments for expanding support to include SMEs are fully supported due to the ambiguity of standard fish farmer categories. If type A fish farmers are categorised as ‘commercial micro enterprises’ the findings support the paradigm shift. However, it is more likely that these farmers lie between ‘non commercial’ and ‘commercial’ categories. A more nuanced approach to aquaculture development, accounting for the wide spectrum of farmers whose characteristics differ between contexts, is required.

Vulnerability to Climate Change in the Eastern Cape Province of South Africa: What Does the Future Holds for Smallholder Crop Farmers?

ABSTRACT Assessment of the level of smallholders’ vulnerability to climate variability and the adaptive capacity will provide information required for adequate policy formulation for the adaptation and improvement of food security among poor farming households. This article utilised data from a survey of 223 small farming households in the Eastern Cape province, one of the poorest agrarian provinces in South Africa, to explore the exposure of smallholder farmers to climate change, their adaptive capacity and their vulnerability to climate shock across major agro-ecological zones. Data on the production of main staple foods, household assets and access to institutional facilities were analysed by means of principal component analysis. General circulation model scenarios were used with a crop model (EPIC) to explore the impact of future plausible climate patterns on farmers’ income. Farmers in the Karoo zone are currently the most vulnerable to climate variability. A scenario analysis also showed that maize production in the Eastern Cape will be positively affected by climate change under both low-input and irrigated management systems, whereas potato yield will decrease. It is projected that smallholder farmers who significantly rely on maize can expect an increase of up to 45 per cent revenue by 2050 under the UKMO-HADGEM1 climate scenario if the average estimated future yields materialise. Both institutional and infrastructural support in the form of access to credit and irrigation facilities are recommended for adequate adaptation to future climate change impact, in particular climate volatility, which was not taken into account in our yield projections.

Is informal risk-sharing less effective for the poor? Risk externalities and moral hazard in mutual insurance

Poor farm-households are less keen to adopt high risk/high return technologies than rich households. Yet, the poor are more vulnerable to income shocks. We develop a model of endogenous risk-taking to explain these facts. In autarky, poor households adopt less risky production plans and obtain lower expected returns, but face higher relative risk than the rich. The introduction of risk-sharing generates negative risk externalities between agents. At the first best, the social planner imposes a homogeneous level of risk-taking in the group. At the second best, risk-taking is not enforceable and increases with insurance, generating moral hazard. Interestingly, the poor's risk-taking behavior is more sensitive to insurance. The social planner thus mitigates risk-taking by applying a lower insurance coverage in poor groups. The introduction of risk-sharing therefore reinforces the gap between rich and poor in terms of expected income and absolute risk, while the effect on relative risk is ambiguous.

Rural Labor Outmigration and Gender Dimension in an Assessment of Farm Technical Efficiency: A Case Study in Selected Rice Villages in the Philippines

Several studies have shown that labor outmigration is one of the livelihood strategies of poor farming households. However, no studies have shown its effect on rice crop production including a gender dimension on technical efficiency in rice farming. This paper attempts to improve the understanding of the relationship between male and female labor migration and farm technical efficiency in selected rice-based farming villages in the Philippines. Using cross-section data from 670 farm households in the Luzon area in the Philippines, results indicate that the type of migration, experience of the migrant, and frequency of home visits enhance farm technical efficiency; however, sex of the migrant increases inefficiencies. The average technical efficiency is 0.74. This implies that, in the short run, there is scope for increasing rice productivity by about 26 percent by conducting formal and informal trainings among the adult household members and providing them access to technical knowledge on the use of improved rice varieties and associated crop and resource management practices.

Do the Poor Benefit Less from Informal Risk-Sharing? Risk Externalities and Moral Hazard in Decentralized Insurance Arrangements

Empirical evidence on developing countries highlights that poor farm-households are less keen to adopt high risk/high return technologies than rich households. Yet, they tend to be more vulnerable to income shocks than the rich. This paper develops a model of informal risk-sharing with endogenous risk-taking which provides a rationale for these observations. In our framework, informal risk-sharing is incomplete due to risk externalities, which leads to moral hazard. We compare the first best and second best to a decentralized bargaining process, where the lack of coordination amplifies moral hazard. The analysis of group composition yields counterintuitive results. First, if groups are homogeneous, poor groups share less risks than rich groups even though the rich take more risks. Second, the insurance level of rich households decreases in the presence of poor households, potentially making them reluctant to share risk with poorer households.

The Effect of Shocks on Household Consumption in Rural Nigeria

Farm households in rural areas of Nigeria are naturally prone to various forms of idiosyncratic and covariate shocks. The frequent occurrence of shocks among the households coupled with lack of effective shock coping mechanisms in the region has made the households vulnerable to poverty. Idiosyncratic shocks affects only an individual household, for example illness or death of a household member. On the other hand, covariate shocks impinge an impact on a larger group of population in the same area at the same time, for instance adverse weather condition. In the absence of functioning formal coping mechanisms, the households resort to borrowing, adjustment in food intake, sale of goods or removing children from formal school. However, little is known about the impact of shocks on household consumption. To contribute to literature, this paper used the nationally representative survey data of rural farm household in Nigeria to empirically examine the effect of both idiosyncratic and covariate shocks on their consumption expenditure, using ordinary least square method. The least square method deemed to be appropriate for the analysis because of the exogeneity nature of shocks to consumption. In contrast to the existing works, the study measures shock as a continuous variable and also disaggregated the sample into and non-poor households on the basis of world poverty line of $ 1.20 per day with a view to recommend possible social protection measures to cope with adverse effect of shocks on household consumption. The framework of the study was developed from Permanent income hypothesis which postulates that any transitory changes in income will not have no any effect on permanent income and hence on actual consumption. The result of the ordinary least square regression used in the analysis revealed that whilst idiosyncratic and climatic shocks have no significant effect on household consumption, price shock is having a significant negative impact on household consumption. Further, the result of disaggregated sample suggests that that the non-poor households are able to adequately insure against the effect of idiosyncratic shocks as well as the climatic shock on their consumption while the poorer ones had not been able to insure against the effect of shocks related to death, livestock loss, climate change and price changes on their consumption. This implies that both poor and non-poor farm households should be provided with an adequate and effective social protection measures that would mitigate the effect of shocks on their consumption and welfare.