Credit constraints and labour allocation decisions in rural Burkina Faso

2017 ◽  
Vol 77 (2) ◽  
pp. 257-274 ◽  
Author(s):  
Mohamed Porgo ◽  
John K.M. Kuwornu ◽  
Pam Zahonogo ◽  
John Baptist D. Jatoe ◽  
Irene S. Egyir
Keyword(s):  
Burkina Faso ◽  
Agricultural Production ◽  
Credit Constraints ◽  
Probit Model ◽  
Multinomial Logit Model ◽  
Farm Households ◽  
Content Type ◽  
Labour Market Participation ◽  
On Farm ◽  
Allocation Decisions

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.

The rationale of part-time farming: empirical evidence from Norway

2017 ◽  
Vol 44 (1) ◽  
pp. 53-59 ◽  
Author(s):  
Klaus Mittenzwei ◽  
Stefan Mann
Keyword(s):  
Empirical Evidence ◽  
Household Income ◽  
Design Methodology ◽  
Farm Households ◽  
Apparent Contradiction ◽  
Content Type ◽  
Level Data ◽  
Part Time ◽  
On Farm ◽  
Practical Implications

Purpose Outside farming, pluriactivity is generally considered as undesirable, whereas agricultural economists tend to recommend part-time farming. This contradiction is to be solved. The paper aims to discuss this issue. Design/methodology/approach Linking tax-payer and statistical farm-level data from Norway, the authors tested how profitable part-time farming is for Norwegian farm households. Findings The analysis showed that concentrating on either working on-farm or off-farm generates a higher household income than combining the two. Practical implications Part-time farming may be a lifestyle decision, but apparently is not economically optimal for most farms. Originality/value The contribution solves an apparent contradiction between the discourses inside and outside agriculture.

Credit constraints and cropland allocation decisions in rural Burkina Faso

2018 ◽  
Vol 70 ◽  
pp. 666-674 ◽  
Author(s):  
Mohamed Porgo ◽  
John K.M. Kuwornu ◽  
Pam Zahonogo ◽  
John Baptist D. Jatoe ◽  
Irene S. Egyir
Keyword(s):  
Burkina Faso ◽  
Credit Constraints ◽  
Cropland Allocation ◽  
Allocation Decisions

The Impact of Credit Constraints on Farm Households: Survey Results from India and China

2013 ◽  
Vol 35 (3) ◽  
pp. 508-527 ◽  
Author(s):  
Chandra S. Kumar ◽  
Calum G. Turvey ◽  
Jaclyn D. Kropp
Keyword(s):  
Credit Constraints ◽  
Farm Households ◽  
Survey Results ◽  
On Farm ◽  
The Impact ◽  
India And China

Credit constraints and their impact on farm household welfare

2016 ◽  
Vol 43 (8) ◽  
pp. 782-803 ◽  
Author(s):  
Minh Chau Tran ◽  
Christopher E.C. Gan ◽  
Baiding Hu
Keyword(s):  
Transaction Cost ◽  
Credit Constraints ◽  
Credit Rationing ◽  
Farm Households ◽  
Farm Income ◽  
Farm Household ◽  
Household Welfare ◽  
Switching Regression ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to identify factors affecting formal credit constraint status of rural farm households in Vietnam’s North Central Coast (NCC) region. Design/methodology/approach – Using the direct elicitation method (DEM), the authors consider both internal and external credit rationing. Findings – Empirical evidences confirm the importance of household head’s age, gender and education to household’s likelihood of being credit constrained. In addition, households who have advantages in farm land size, labour resources and non-farm income are less likely to be credit constrained. Poor households are observed to remain restricted by formal credit institutions. Results from the endogenous switching regression model suggest that credit constraints negatively impact household’s consumption per capita and informal credit can act as a substitute to mitigate the negative influence of formal credit constraints. Research limitations/implications – One limitation arises from the usage of the DEM to identify credit constrained households. The method cannot detect effective and ineffective constraints. Another limitation is the inability of cross-section data to capture long-term impacts of credit constraints on household welfare. Finally, causes of credit constraints from the lender’s view cannot be observed. Practical implications – The results suggest that it is necessary to enhance the credit allocation regime to reduce the transaction cost and provide target households with sufficient credit. It should be emphasized that high transaction cost and the mismatch between credit demand and supply stemming from information asymmetry. The government can help formal financial institutions to reduce information cost by encouraging the active role of social organizations such as Women Unions, Youth Unions and Veteran Unions in bridging rural farm households with formal lenders. Originality/value – There are limited studies focusing on determinants of credit constraints and their impacts on rural farm households. To the best of the knowledge, there is no study evaluating the impact of credit constraints on rural farm household welfare particularly in Vietnam. In addition, the studies related to credit constraints only considered full quantity rationing (households applied for the loan but were rejected), omitting the case of partly quantity rationing (loan obtained by the borrowers is less than their demand) and self-rationing.

The importance of off-farm employment for smallholder farmers in Rwanda

2018 ◽  
Vol 45 (1) ◽  
pp. 14-26
Author(s):  
Ildephonse Musafiri ◽  
Pär Sjölander
Keyword(s):  
Developing Countries ◽  
Rural Areas ◽  
Agricultural Production ◽  
Production Efficiency ◽  
Smallholder Farmers ◽  
Data Set ◽  
Content Type ◽  
Farm Work ◽  
Agricultural Business ◽  
On Farm

Purpose Based on unique data the authors analyze the Rwandan non-farm employment expansion in rural areas and its relation to agricultural productivity. The purpose of this paper is to analyze the factors that determine off-farm work hours in Rwanda, and how farmers’ off-farm employment affects agricultural output. Since production efficiency may depend on off-farm work and off-farm work depend on production efficiency (Lien et al., 2010), both production and off-farm work are endogenous. While controlling for endogeneity, the authors investigate the relationship between off-farm work and agricultural production. Design/methodology/approach In this paper the authors use a unique panel data set spanning over 26 years originating from household surveys conducted in the northwest and densely populated districts of Rwanda. Econometric estimations are based on a random effects two-stage Tobit model to control for endogeneity. Findings The study confirms theoretical and empirical findings from other developing countries that off-farm employment is one of the essential conditions for having an economically viable agricultural business and vice versa. Research limitations/implications The study is carried out in only one district of Rwanda. Even though most rural areas in Rwanda have similar features the findings cannot necessarily be generalized for the entire country of Rwanda. As in any study, the raw data set suffer from a number of shortcomings which cannot be fully eliminated by the econometric estimation, but this is a new data set which has the best data available for this research question in Rwanda. Practical implications The authors can conclude that there are synergy effects of investing government resources into both on-farm and off-farm employment expansions. Thus, in Rwanda on-farm investments can actually partly contribute to a future natural smooth transformation to more off-farm total output and productivity and vice versa. Though there are still limited off-farm employment opportunities in the studied area, there are considerable potentials to generate income and increase agricultural production through the purchase of additional inputs. Social implications The findings imply that a favorable business climate for off-farm businesses creates spill-over effects which enhance the smallholder farmers’ opportunities to survive, generate wealth, create employment and in effect reduce poverty. Originality/value From the best of the authors’ knowledge, similar studies have not been conducted in Rwanda, nor elsewhere with this type of data set. The findings provide original insights regarding off-farm and agricultural relationships in rural areas under dense population pressure. The results provide some indications that off-farm employment in developing countries (such as Rwanda) is one of the essential conditions for having an economically viable agricultural business and vice versa. The second wave of data was collected by the authors and was used solely for the purpose of this paper.

Does agro-processing adoption affect farm income and farm diversification? Empirical evidence from Taiwan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lin Lin ◽  
Hung-Hao Chang
Keyword(s):  
Large Scale ◽  
Farm Households ◽  
Farm Income ◽  
Processing Methods ◽  
Content Type ◽  
Farm Diversification ◽  
Effect Model ◽  
Agricultural Census ◽  
On Farm ◽  
The Impact

PurposeThe purpose of this paper is to identify the factors associated with the adoption of agro-processing methods and to estimate their impact on farm income and farm diversification.Design/methodology/approachUsing a large-scale sample of 12,122 special crop farm households drawn from the 2015 Agricultural Census Survey in Taiwan, the semiparametric multivalued treatment effect model was estimated.FindingsThe authors found that agro-processing farm households obtain higher farm incomes than non-agro-processing farm households. Among the agro-processing methods, self-processing generates higher farm income than outsourced-processing. Moreover, farm households that adopt either agro-processing method are more likely to diversify into agritourism and other agribusinesses than non-agro-processing farms.Research limitations/implicationsThe authors could only access data on farm income and not on agro-processing costs. Future studies may address the impact of agro-processing on farm profitability if relevant data are available.Originality/valueVery few studies have examined the relationship between agro-processing, farm income and farm diversification. To the best of the authors’ knowledge, this is one of the first papers to examine the impact of different agro-processing practices on farm income and farm diversification.

scholarly journals The interrelationships among the formal, semiformal and informal credit demands of farm households in Vietnam

2021 ◽  
Vol 48 (5) ◽  
pp. 776-791
Author(s):  
Nguyen Tuan Anh ◽  
Christopher Gan ◽  
Dao Le Trang Anh
Keyword(s):  
Credit Markets ◽  
Smallholder Farmers ◽  
Probit Model ◽  
Farm Households ◽  
Red River Delta ◽  
Informal Credit ◽  
Content Type ◽  
Access To Credit ◽  
Credit Demand ◽  
Practical Implications

Purpose This study simultaneously explores the nexus among formal, semiformal and informal credit markets and farm households' credit demand determinants in Vietnam. Design/methodology/approach This study uses a multistage stratified random sampling process for a survey of 648 smallholder farmers in the Red River Delta (RRD), Vietnam. The trivariate probit model (TVPM) is used to address the interdependence of farm households' credit demands in different credit markets. Findings The results reveal complementary relationships among two pairs of credit markets (formal versus informal and semiformal versus informal). There are dissimilarities among the determinants (household characteristics, household head's characteristics, credit history and geographic factors) of farm households' credit demands in different markets, reflecting segmentation of Vietnam credit markets. Practical implications The study's empirical findings are important for policymakers and credit providers to enhance farm households' access to credit for agriculture and to improve the operations of the three credit markets. Originality/value This is the first empirical study in Vietnam and one of few in other developing countries simultaneously exploring the determinants of credit demand in and interrelationships among all three credit markets to provide more comprehensive and accurate results.

SME ambidexterity during economic recessions: the role of managerial external capabilities

2019 ◽  
Vol 57 (1) ◽  
pp. 21-40 ◽  
Author(s):  
Henar Alcalde-Heras ◽  
Cristina Iturrioz-Landart ◽  
Cristina Aragon-Amonarriz
Keyword(s):  
Economic Recession ◽  
Probit Model ◽  
Multinomial Logit Model ◽  
Organizational Structures ◽  
Top Management ◽  
Large Firms ◽  
Content Type ◽  
External Resources ◽  
Using Data

Purpose Most literature on ambidexterity has focused on large firms and on the influence of internal issues in this strategy, that is, organizational structures, top management integration, or internal knowledge management processes (Lutbatkin et al., 2006; Chang et al., 2011; Lee and Huang, 2012). The purpose of this paper is to assess small- to medium-sized enterprises (SMEs)’ ambidexterity strategies during economic recession periods in comparison with those of large firms and identify the managerial external capabilities which are associated with the development of SMEs’ ambidexterity. Design/methodology/approach A multinomial logit model and a probit model are proposed and tested using data collected from 2,150 Spanish firms during the period of 2009-2013. Findings The data analysis reveals that SMEs develop more ambidextrous innovation strategies in recession periods than larger firms do. Moreover, two managerial external capabilities have been identified as drivers of SMEs’ ambidextrous behavior in crisis periods: first, the capability of top management to anticipate scenarios; and second, the capacity to acquire adequate external resources through co-operation. Practical implications The results show that SME managers wanting to develop ambidextrous strategies in recession periods have to forecast scenarios in terms of innovation difficulties and strengthen their resources through co-operation. Implementation of public policy is encouraged to support these capabilities, thus enhancing SME sustainability in uncertain contexts. Originality/value Prior studies have paid little attention to the role of external capabilities. Although their role was revealed as a relevant dimension in the study of SME ambidexterity in adverse contexts by Cao et al. (2010), it remained underexplored. This paper aims to fill this gap.

scholarly journals The effect of climate change adaptation strategy on farm households welfare in the Nile basin of Ethiopia

2019 ◽  
Vol 11 (4) ◽  
pp. 518-535
Author(s):  
Fissha Asmare ◽  
Hailemariam Teklewold ◽  
Alemu Mekonnen
Keyword(s):  
Climate Change ◽  
Climate Change Adaptation ◽  
Labor Demand ◽  
Adaptation Strategy ◽  
Adaptation Strategies ◽  
Farm Households ◽  
Farm Income ◽  
Farm Labor ◽  
Content Type ◽  
On Farm

Purpose This study aims to examine the effect of crop diversification (CD), as a climate change adaptation strategy, on farm household’s welfare in terms of farm income and demand for labor. It explores whether adoption of CD is a win-win strategy on household income and demand for on-farm labor. It also examines the determinants of rural household’s net farm income and family labor demand. Design/methodology/approach A household-plot level data were collected in 2015 from 929 rural farm households and 4,778 plots in the Nile Basin of Ethiopia. The data comprise farm and household characteristics accompanied by geo-referenced climate data such as long-term average temperature and amount and variability of growing season rainfall. The authors estimate an endogenous switching regression model to measure the effect of CD on the farm household’s welfare, using net farm income and household labor demand as a welfare indicator. Findings The results indicate heterogeneous effects of climate variables on farm income between adopters and non-adopters of CD. The study also confirms the win-win effect of adoption of CD with a positive and significant effect on farm income and a reduction in demand for on-farm labor. The results suggest that adoption of CD helps improve the well-being of farm households and build a resilient agricultural system. Research limitations/implications As the study used a cross-sectional data, it is limited to show the time effect of practicing CD on the household’s welfare. Originality/value First, the authors investigate, to their knowledge for the first time, the existence of synergy or tradeoff in the effect of CD on two dimensions of rural households’ welfare (net farm income and labor demand). Second, they investigate the heterogeneous effect of climate change adaptation strategies on the farm household’s welfare between adopters and non-adopters. This is unlike previous studies that consider climate change adaptation strategies as having a homogeneous effect. However, this approach is inappropriate since the effect of adaptation strategies is different for adopters and non-adopters.

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