Credit constraints and cropland allocation decisions in rural Burkina Faso

Purpose Credit is central in labour allocation decisions in smallholder agriculture in developing countries. The purpose of this paper is to analyse the effect of credit constraints on farm households’ labour allocation decisions in rural Burkina Faso. Design/methodology/approach The study used a direct elicitation approach of credit constraints and applied a farm household model to categorize households into four labour market participation regimes. A joint estimation of both the multinomial logit model and probit model was applied on survey data from Burkina Faso to assess the effect of credit constraint on the probability of choosing one of the four alternatives. Findings The results of the probit model showed that households’ endowment of livestock, access to news, and membership to an farmer-based organization were factors lowering the probability of being credit constrained in rural Burkina Faso. The multinomial logit model results showed that credit constraints negatively influenced the likelihood of a farm household to use hired labour in agricultural production and perhaps more importantly it induces farm households to hire out labour off farm. The results also showed that the other components of household characteristics and farm attributes are important factors determining the relative probability of selecting a particular labour market participation regime. Social implications Facilitating access to credit in rural Burkina Faso can encourage farm households to use hired labour in agricultural production and thereby positively impacting farm productivity and relieving unemployment pressures. Originality/value In order to identify the effect of credit constraints on farm households’ labour decisions, this study examined farm households’ decisions of hiring on-farm labour, supplying labour off-farm or simultaneously hiring on-farm labour and supplying family labour off-farm under credit constraints using the direct elicitation approach of credit constraints. To the best of the authors’ knowledge, this study is the first to examine this problem in Burkina Faso.

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Cropland Allocation Decisions: The Role of Agricultural Commodity Programs and the Reclamation Program

The Economics and Management of Water and Drainage in Agriculture ◽

10.1007/978-1-4615-4028-1_29 ◽

1991 ◽

pp. 575-596 ◽

Cited By ~ 2

Author(s):

Michael R. Moore ◽

Donald H. Negri ◽

John A. Miranowski

Keyword(s):

Agricultural Commodity ◽

Commodity Programs ◽

Cropland Allocation ◽

Allocation Decisions

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Farmers' response to COVID-19 disruptions in the food systems in Ghana: the case of cropland allocation decision.

10.31220/agrirxiv.2021.00032 ◽

2021 ◽

Author(s):

Edward Martey ◽

Peter Goldsmith ◽

Prince M. Etwire

Keyword(s):

Food Systems ◽

Agricultural Sector ◽

Mitigation Strategies ◽

Seemingly Unrelated Regression ◽

Sub Saharan Africa ◽

Allocation Decision ◽

Sub Saharan ◽

Food Commodities ◽

Cropland Allocation ◽

Allocation Decisions

Abstract The COVID-19 pandemic is a global health issue with disruption effects in the agricultural food systems especially in Sub-Saharan Africa (SSA) where most of the population is engaged in the agricultural sector. While prices of food commodities continue to increase, farmers are likely to be food insecure or market-oriented by allocating land resources between commercial and staple crops. This study provides new evidence on the determining factors of cropland allocation decisions within the context of the COVID-19 pandemic. The study employs the probit and seemingly unrelated regression (SUR) models on 309 farm households. The results reveal that socio-economic, production, institutional, and political factors significantly influence the choice of cropland allocation decisions and the size of cropland allocated to legumes and cereals. Beyond these factors, we find that COVID-19 education increases land area allocated to staples while farmers' perception that COVID-19 will impact negatively on agricultural production leads to an increase in the area under commercial crop (soybean) production. The result suggests that promoting farmer education on the disruptive effects of the COVID-19 pandemic and understanding farmer perceptions of the disruptive effects of the COVID-19 will guide future adaptation and mitigation strategies as well as determining the "best" possible cropland allocation decision.

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