Center for Effective Global Action

For many poor farmers in developing countries, vulnerability to risk is a dominant feature of their livelihoods. Households' desires to protect themselves against shocks is thought to affect their production and savings decisions. Farmers who are fearful of future loss of earnings may be reluctant to adopt technological innovations with a variable or unknown return. This paper examines the relationship between agricultural development, vulnerability to shocks, and the risk management practices of small farmers in developing countries. It finds that adoption of new agricultural inputs and practices is a combination of both rational and behavioral motives, with peer effects appearing more important through studies of social networks and reinforcement and diffusion effects.

International development agencies have renewed interest over agriculture’s pro-poor potentials. South Africa’s agriculture though contributes less than 3% to GDP, has the highest employment per unit of GDP. The sector is sharply divided into small and large farms. Data reveals an increasing land productivity gap between both types of farms. Using data from various sources1, this paper assesses the agricultural production impacts of inequality and land redistribution, first in the whole agricultural sector, then the sugarcane sub-sector, comparing small-scale and largescale farm performances and considering the causes of the productivity gap. It also analyses the comparative poverty effects of both farm-types. Time series are corrected for unit roots and estimated using robust estimation, which corrects for heteroskedasticity and outliers. Specification tests help to determine the right panel model for sugarcane. The results suggest that inequality (land redistribution) is associated with slower (enhanced) agricultural productivity. This positive effect of land redistribution can be because land constraints in South African large farms may not be binding and therefore the negative impact on large-farms does not dominate. The impact of land redistribution though negative for large-scale and positive for small-scale producers is not significant. This implies that redistribution efforts must be accompanied by significant ease of other constraints facing small farmers. Other inputs like fertiliser and irrigation facilities show more significant impact on small farm production than land alone. Much of the difference in productivity arises from disparity in input use, specifically fertiliser and irrigation. There is possibility of positive external effects from large-scale chemical and labour use to small-scale production as they attenuate the gap in productivities. The finding also suggests the need to strengthen the human capital (particularly education) of small-scale producers. Both large and small-scale sugarcane production have significant poverty reduction effects, but the effect from small-scale production is clearly higher.

There are three reasons why land policies in Africa are attracting greater amounts of attention. First, it is recognized that enhancing smallholder productivity is critical for sustainable and broad-based growth as well as poverty reduction (World Bank 2007). However, land-related investment, technology adoption, establishment of processing, markets, and value chains, all are unlikely to come about unless land tenure is secure. Moreover, increased productivity will be capitalized in land values and unless explicit attention is devoted to traditional land rights and land access by weaker groups, in particular women, interventions aiming to increase agricultural productivity may have negative social consequences. This is particularly relevant in contexts where current interpretations of customary systems define women's rights only through their relationship with men and women are often unable to inherit land which is considered the property of their husband's lineage. Negative implications for productivity can be severe, in particular if, as almost everywhere, women make a major contribution to agricultural production and its management.

Second, demand for land, and in many cases land prices, have vastly increased with population growth, urbanization, and overall economic development. While higher land values makes land registration more rewarding, leaving land rights undefined increases the risk of having them appropriated by outsiders in a way that may neither be consistent with principles of equity nor conducive to the most productive use of this resource.

Third, in a decentralized setting, land administration can not only help provide public goods and improve government finance but also that are rural areas will not develop based on agriculture alone. Nonagricultural development will imply migration of households out of agriculture that requires secure land rights so as to allow transfer of land rights, either through rental on a temporary basis or through sale, to others who are able to make more effective use of it without the fear of losing it. In many cases, this is now complemented by demand for land by investors who want to use it for food production, bio-fuels, or in anticipation of carbon payments has increased significantly in the wake of recent commodity price booms. It has highlighted that, without clear processes to process requests or assign of land rights, land acquisition by outsiders may end up fostering corruption and leading to inequality and dispossession of traditional land users rather than as a positive force for growth.

This paper examines the theories identifying channels through which land rights can affect socioeconomic outcomes, points to realities which often prevent such effects from materializing, summarizes quantitative evidence on the actual impact of land registration interventions to assess the validity of theoretical arguments, and derives conclusions that can help guide applied work in this area. An example from Ethiopia is used to illustrate the potentially far-reaching impacts of ‘new' models of formalizing land rights and a number of policy conclusions are drawn.

Africa is the only region where agricultural productivity has continued to decline over the last decades and poverty levels have increased. This has necessitated the need to increase agricultural productivity. One way of increasing agricultural productivity is through introduction and use of improved agricultural technologies. This paper applied a double-hurdle model on a ten-year panel household survey data for 1,275 households to examine determinants of fertilizer adoption and use intensity in Kenya.

Results show that the proportion of households using fertilizer dramatically rose in the last decade while fertilizer application rates increased marginally. Fertilizer use in the drier agro ecological zones is still way below that in the higher agro ecologically potential zones, indicating higher risk involved in and lower profitability of using fertilizer in the drier areas. Econometric estimation results show that age, education, credit, presence of a cash crop, distance to fertilizer market and agro ecological potential are statistically significant in influencing the probability of adopting fertilizer. The strongest determinants of fertilizer use intensity are gender, dependency ratio, credit, presence of cash crop, distance to extension service and agro ecological potential.

The study suggests improving access to gricultural credit by especially low income farmers; concerted efforts to promote fertilizer use among farmers in the drier areas; and government investment in rural infrastructure, efficient port facilities and standards of commerce to reduce the cost of distributing fertilizer, as some of the ways to promote fertilizer use.

This article analyses the determinants of the discrete decision of a household on whether to participate in banana markets using the FIML bivariate probit method. The continuous decision on how much to sell or buy is analyzed by establishing the supply and demand functions while accounting for the selectivity bias.

Results indicate that buying and selling decisions are not statistically independent and the random disturbances in the buying and selling decisions are affected in opposite directions by random shocks. Transaction cost related factors such as geographical location of households, market information sources and travel time to the nearest urban centre do influence participation. Other factors such as labour availability, farming experience, gender of household head, off-farm income and the asset base of the household also affect the likelihood and intensity of participation.

Policies guiding central and local governments towards increased investment in rural infrastructure (i.e. feeder roads networks, trunk roads, telecommunication services and establishment of market places) can help reduce transaction costs and thereby improve participation of smallholder farmers in markets. Policies supporting group formation may lead to improving economies of scale and flow of information amongst farmers which may increase market participation.

The transition from subsistence to commercial agriculture, often referred to as the commercialization of agriculture, has long been considered an important part of the agrarian transformation of low income economies and a means of ensuring food security, enhanced nutrition, and enhanced incomes. However, in the face of imperfect markets and high transaction costs, smallholders are rarely able to exploit all the potential gains from commercialization. With the objective of better understanding smallholder participation in markets, the paper proceeds in Section 1 to examine the impact of early reforms on smallholder market participation. In Section 2, we characterize the dimensions of smallholder agriculture that constrain market participation. In Section 3, a conceptual framework for understanding market participation through the lens of market institutions is proposed, followed by an exposition to recent efforts to promote market development in Section 4 and an overview of participation through the market institution of a commodity exchange in Section 5, before proceeding to conclusions in Section 6.

This paper examines the informational origin of the low adoption rates of modern agricultural technologies frequently observed in smallholder agriculture in Sub-Sahran Africa. The paper argues that a large part of these observed low adoption rates can be explained by a simple fact: The lack of awareness of the existence of the technology by a large proportion of the smallholder farming population. The paper analyzes the structure of the adoption gap resulting from this lack of awareness and presents a methodology for estimating that gap and truly informative adoption rates and their determinants. This methodology is then used to provide estimates of the New Rice for Africa (NERICA)

population potential adoption rates and gaps as well as estimates of the determinants of NERICA exposure and adoption in four West African Countries: Cote d’Ivoire, Guinea, Benin and Gambia.

The implied estimated adoption gaps of 21% in Cote-d’Ivoire, 41% in Guinea, 28% in Benin and 47% in Gambia suggest that there is potential for increasing NERICA adoption significantly in these four countries. The results of the analysis of the

determinants of NERICA adoption highlight the importance of Participatory Varietal Selection (PVS) trials and farmer access to extension services in promoting the adoption of NERICAs beyond their beneficial effects in making farmers aware of the existence of the varieties. The findings also points to some possible gender biases in the dissemination of NERICA varieties in Guinea.

The paper reports on a series of field experiments based on a non-standard common-pool resource model and carried out with communal farmers in southern Africa. We frame an experimental design used by Cardenas et al. (2008) in Thailand and Colombia according to the grazing situation in semi-arid regions. We analyse the efficiency of two simple, imperfectly enforced property-rights mechanisms that base on both, informal realworld arrangements practised in the communal areas as well as on the procedure pursued by the Namibian government, where mostly those farmers with big herd sizes get granted access to resettlement farms. Our results suggest that in the short run, the introduction of property rights increases the economic returns and has positive ecological effects, but that these effects diminish in the long-run if imperfectly enforced. It further seems that players’ propensity to co-operate is constant across the experiment: farmers who behave less co-operatively in an open access situation do so as well when they get granted exclusive property rights.

The objective of this introduction is to put the May 2009 conference "on Agriculture for Development" in perspective of current and expected changes in the broad process of using agriculture for development in Sub-Saharan Africa. This is to help the conference achieve its two main purposes: assess the frontiers of research in economics applied to agricultural development and smallholder competitiveness; and establish research priorities for future efforts in that direction. It uses the WDR 2008 as a starting point for this task.

This paper analyzes the use of improved agricultural technologies, and implications for food security and poverty reduction in rural Mozambique. The results are drawn from a nationally representative household survey covering the agricultural season of 2004/05. As a robustness check, the paper uses three econometric approaches: the doubly robust estimator, regression and matching, and sub-classification and regression. The results show that the impact of improved technologies is positive, conditional on irrigation use. Additionally, the results attest to the importance of increasing agricultural productivity in tandem with improvements on farmers’ ability to store food.