Promoting Market Participation Research Articles

Diversified agriculture leads to diversified diets: panel data evidence from Bangladesh

This study used a panel data model to examine the relationship between agricultural diversification and dietary diversity of farm households across three waves of nationally representative Bangladesh Integrated Household Survey data (BIHS- 2011-12, 2015, and 2018). Prior research measured diversification in terms of crop cultivation and livestock rearing. However, this study takes a different approach to measuring agricultural diversification by combining the three major sectors—crop, fish, and livestock production—at the farm household level to evaluate the impact of such agricultural diversification on the diversification of diets in households. The panel data allows us to establish that agricultural production diversification has a significantly positive effect on the dietary diversity of farm households. Moreover, other important factors that impact agricultural diversification to improve dietary diversity, like women’s employment, market access, engagement with non-farm income sources, and access to information also have a strong association in improving the dietary status, food and nutritional security of households. Participation in the market helps farming households to become more commercially oriented but negatively affects the dietary diversification of the households. However, participation in non-farming activities was reported to have a significant positive influence on dietary diversity, though not as much as agricultural diversification. From the perspective of policy that requires nutrition into consideration, the findings suggest to focus on providing support for diversified farming systems can directly increase the nutritionally enriched dietary intake, increasing the employability of women. Promoting market participation through modern infrastructural facilities should be prioritized to improve the current scenarios.

Issuer and Investor Proprietary Rights in Eastern and Southern African Frontier Securities Markets—The Role of the Compensation Fund, and the Case for a Regional Compensation Fund

Although empirical evidence shows that investment flows to Sub-Saharan Africa, in form of foreign portfolio investment (FPI), have been on the rise in the past two decades, further evidence shows that actually, investment flows into the Common Market for Eastern and Southern Africa (the COMESA Region) have been very low. Against this backdrop, the need for an efficient Domestic Compensation Fund (DCF) has been highlighted. It is also against the said background that the establishment of a Regional Compensation Fund (RCF)—as a complement of the DCF—has been mooted as a possible way of enhancing the attractiveness regional securities markets as they compete with other markets outside the COMESA Region for those FPI flows to Sub-Saharan Africa. This article examines mainly the Zambian regulatory and institutional framework which regulates the public distribution of securities domestically and across international borders so as establish whether or not it provides adequate incentives and safeguards for prompt and adequate compensation of investors and other market participants who suffer pecuniary loss on account of the default of a licenced person or their employee. The study employs the doctrinal and the non-doctrinal approaches to examining the effectiveness of regulatory rules and institutions. The main finding of the study was that the regulatory and institutional framework for the public distribution of securities does not provide adequate incentives and safeguards for prompt and adequate compensation of investors and other market participants as aforesaid. In particular, the results of the study show that (a) although the regulatory and institutional framework provides for the compensation of the investors and other market participants for their losses, it does not (i) provide for recourse to other bodies for the recovery of unmet or unsatisfied claims or portion of the claim, (ii) fix the time-frame for the determination of compensation claims, (iii) provide for a statutory right of appeal against the determinations or decisions of the DCF, and (iv) a RCF has not been mooted yet or established as a complement to the DCFs in the COMESA Region. The central argument of this article is that liquid and efficient DCFs which are supported by a vibrant RCF are likely to promote market participation and enhance the resilience and fortitude of domestic securities markets in the COMESA Region as they strive to recover from the financial shocks of COVID-19.

Market Participation of Smallholder Farmers and Food Crop Productivity: Evidence from Burkina Faso

Subsistence farming is frequently viewed as a low yielding and inefficient to ensure sustainable food security in sub-Sahara Africa. Commercial agriculture induces profit maximization and promotes on-farm investment. However, for most farmers in Burkina Faso, home consumption is the main objective of the agricultural production activities. Using survey data collected over 1178 farm households, this paper analyses the effects of participation of smallholder farmers in the output market on input use and food crop productivity in Burkina Faso. We estimate a Tobit model of the relationship between market participation (measured by the proportion of crop sold) and fertilizer use. The results show that an increase in level of sale leads to an increase in the level of fertilizer adoption. We also estimate a model of production using the instrumental variable regression approach to correct for the endogeneity of the crop commercialization index. The findings indicate that agricultural commercialization has a positive and significant effect on food crop productivity. This means that higher integration of farmers to markets increases their incentives to adopt new technologies which results in yield growth. Therefore, the findings confirm the need for promoting market participation of smallholders to induce technological change and productivity growth of agriculture in Africa.

Satisfaction principle or efficiency principle? Decision-making behavior of peasant households in China’s rural land market

Transaction prices often deviate from the market price in rural land markets. This has been attributed to the decision process being driven by satisficing behaviors. Owing to bounded rationality, individuals tend to adopt the satisfaction principle (searching for a satisfactory solution) rather than the efficiency principle (striving to maximization) when making decisions. Accordingly, we have developed a conceptual framework to explore how decision principles cause decision biases in China’s rural land market and their driving factors. Drawing on unique survey data from 31 Chinese provinces in 2018, we employ regression models to test the theoretical hypotheses. Empirical verifications reveal the following: i) The cause of decision bias, such as non-market prices, is farmers’ adopting the satisfaction principle to make decisions. ii) Economic development, market maturity, and land registration can help reduce transaction costs, thereby reducing decision bias. iii) Given that experienced farmers are more likely to adopt the efficiency principle, their experience can help partly reduce decision biases in the rural land market. Thus, for the purpose of avoiding these anomalies in the market, policies to promote market participation and conduct land certifications should be implemented according to local economic conditions. Additionally, farmers need more opportunities to learn about the market and transactions.

Household characteristics and market participation competence of smallholder farmers supplying cassava to starch processors in Nigeria

The household head characteristics of smallholder cassava farmers supplying raw materials to the major commercial starch processors in Nigeria were examined alongside their market participation categories. A multi-stage random sampling technique was used to select 96 farmers working in clusters in the eight cassava producing states. Data were analyzed using a combination of descriptive and inferential statistics, including the use of independent sample t-test technique to compare farmer's characteristics for the farmers' market participation categories. Results revealed that majority of the farmers were farming for subsistence with only 19.80% selling up to 50% of their farm produce as against 80.20% who sold less. Average mean values were found to be higher for the high market participants compared with the low participants for the age, farming experiences, education, farm size, gender, marital status, household size, training, season of harvesting and fertilizer use, but lower for use of credit, improved cassava variety, harvesting method, farming time devotion, and road access. Only farm size, gender and harvesting season at p<0.01 level and training at p<0.05 level were found to be statistically significant in distinguishing the high and low market participation categories. Policies and programmes aimed at promoting market participation among cassava farmers in Nigeria should be more impactful if directed at these significant factors.Int. J. Agril. Res. Innov. & Tech. 6 (2): 42-56, December, 2016

Double Exposure to Climate Change and Globalization in a Peruvian Highland Community

Livelihood strategies in the Peruvian Highlands are currently at risk as smallholder farmers are simultaneously confronted by two major disruptions: economic globalization and climate change. Results of interviews conducted in Langui, Peru, with 40 farming households show that agriculture in the region is undergoing a number of adaptations as households transition from planting traditional staple crops to planting improved varieties of grasses for livestock for dairy production. These adaptations are a response to increased extreme weather events and increased opportunity for participation in the formal market. There is a need for balanced development strategies in this region that promote market participation while allowing smallholder farmers to maintain food self-sufficiency and agrobiodiversity in the face of climate change and a changing global economy.

A cyclic time-dependent Markov process to model daily patterns in wind turbine power production

Wind energy is becoming a top contributor to the renewable energy mix, which raises potential reliability issues for the grid due to the fluctuating nature of its source. To achieve adequate reserve commitment and to promote market participation, it is necessary to provide models that can capture daily patterns in wind power production. This paper presents a cyclic inhomogeneous Markov process, which is based on a three-dimensional state-space (wind power, speed and direction). Each time-dependent transition probability is expressed as a Bernstein polynomial. The model parameters are estimated by solving a constrained optimization problem: The objective function combines two maximum likelihood estimators, one to ensure that the Markov process long-term behavior reproduces the data accurately and another to capture daily fluctuations. A convex formulation for the overall optimization problem is presented and its applicability demonstrated through the analysis of a case-study. The proposed model is capable of reproducing the diurnal patterns of a three-year dataset collected from a wind turbine located in a mountainous region in Portugal. In addition, it is shown how to compute persistence statistics directly from the Markov process transition matrices. Based on the case-study, the power production persistence through the daily cycle is analyzed and discussed.

Agricultural Commercialisation In Coffee Growing Areas Of Ethiopia

The coffee sub-sector is very important to the Ethiopian economy – in 2005, coffee export generated 41% of foreign exchange earnings – and provides income for approximately 8 million smallholder households. Policy attention to the sector was always considerable, and its importance has been renewed in the latest Poverty Reduction Strategy, the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). PASDEP puts forward a development strategy based on accelerated economic growth, part of which is hoped to be achieved via increased smallholder commercialisation and market integration. This paper addresses commercialisation in selected coffee growing areas in Ethiopia. The objectives of the study were (i) to assess the scale of commercialisation in coffee growing areas and to detect household and farm characteristics which might explain variation in the levels of coffee commercialisation among households; and (ii) to answer two separate questions: why some sampled households didn\'t take part in output markets (i.e. identify determinants of market entry) and why some households sold more products than others (i.e. determinants of market supply). Answering these questions will help to identify policy options promoting market participation and commercialisation of smallholder agriculture. Agricultural commercialisation was found to be comparatively high in the studied Weredas (Districts). On the average, farmers marketed 84% of their farm production. Overall, coffee contributed 70% to the total value of output sold. There is, however, a high inter-household differentiation: the 25% highly commercialised smallholders generated over 95% of their cash income from coffee sales, while the bottom 25% earned 63% of their cash income from selling food crops. Keeping other factors constant, the total volume of farm production explained about 72% of the variation in the degree of commercialisation among sampled farm households. Demographic and household factors, wealth and total farm size had no effect on the observed variation in the degree of coffee commercialisation among sampled households. A negative and significant association between the level of household coffee commercialisation and land productivity in non-coffee crops was found, indicating potential trade-offs between the production of coffee, the major cash crop, and other, mainly food crops. No evidence was found of increasing labour intensity as a result of increased coffee production. Similarly, the degree of coffee commercialisation was found to have a statistically insignificant effect on household-level food consumption. Overall, the findings demonstrate the integrated nature of the farming system in coffee growing areas. Despite an overall high level of coffee commercialisation, diversified farming is a strategy pursued by the majority of the surveyed households. The study findings, however, suggest that further specialisation in coffee could enhance overall agricultural commercialisation in the study areas. As the propensity to supply more coffee is significantly higher among households depending more heavily on purchased food, minimising the trade-offs in the production of coffee and non-coffee staple food crops, especially in the short-term, is very important, which signifies the importance of addressing risks associated with food supply and price. In general, increasing smallholder coffee commercialisation is expected to be a viable pathway for agricultural development in coffee growing areas of Ethiopia, if the problem of low productivity, barriers for production expansion (e.g. shortage of farm land or constrained access to farm land) and addressing market risks in both the food and coffee market are addressed by increased research and policy attention. Ethiopian Journal of Economics Vol. 16 (1) 2007: pp. 89-118

Policy options promoting market participation among smallholder livestock producers: a case study from the Phillipines

We investigate the factors precipitating market entry where smallholders make decisions about participation (a discrete choice about whether to sell quantities of products) and supply (a continuous-valued choice about how much quantity to sell) in a cross-section of smallholders in Northern Luzon, Philippines, in a model that combines basic probit and Tobit ideas, is implemented using Bayesian methods, and generates precise estimates of the inputs required in order to effect entry among the non-participants. We estimate the total amounts of (cattle, buffalo, pig and chicken) livestock input required to effect entry and compare and contrast the alternative input requirements. To the extent that our smallholder sample may be representative of a wide and broader set of circumstances, our findings shed light on offsetting impacts of conflicting factors that complicate the roles for policy in the context of expanding the density of participation.