Economies of diversification and stochastic dominance analysis in French mixed sheep farms

Farm diversification is mainly driven by risk mitigation effects and economic gains related to complementarities between production activities. By combining these two aspects, we investigate diversification economies in a sample of French mixed sheep farming systems and rank these systems using stochastic dominance criteria. Partially diversified systems (Sheep-Grass, Sheep-Crop, Sheep-Landless) and fully diversified systems (Sheep-Grass-Crop-Landless) were evaluated. We find a high degree of diversification diseconomies in the sheep farming systems considered. The results also indicate that the fully diversified system is driven by its risk-reducing effects (including downside risk exposure) and that Sheep-Crop is the dominant system in terms of risk-adjusted returns.

Evaluating complementary synergies in integrated crop-livestock systems in Ghana

Purpose The purpose of this paper is to investigate the characteristics of crop-livestock diversification among smallholders in the forest-savannah agroecological zone of Ghana. Design/methodology/approach The study uses a stochastic input distance function to investigate the evidence of economies of diversification and its effect on determining diversification decisions of smallholders in Ghana. Furthermore, this study also explores evidence of scale economies in integrated crop-livestock systems among smallholder farmers. Findings The empirical results show that economies of diversification are significant in determining diversification decisions of smallholders. The economies of scale are evident in integrated crop-livestock systems in Ghana, suggesting that opportunities exist to expand crop-livestock outputs without employing additional inputs or improved production technologies. Crop-livestock diversification is a desirable strategy for improving overall farm productivity among smallholders in Ghana. Economies of diversification were found to be significant among the output combinations, maize with other crops and other crops with livestock, in integrated crop-livestock production systems. Research limitations/implications This study is based on a cross-sectional data set. Hence, the findings may be subject to some limitations; however, the authors have sought to minimise such limitations. Practical implications The results imply that crop-livestock diversification is a desirable strategy for improving overall farm productivity. Therefore, the findings are useful for policymakers to design appropriate strategies for enhancing the production of specific output combinations in crop-livestock diversification systems among smallholders in Ghana. Specifically, such policies should promote the production and integration of crops such as legumes with other crops, and livestock with other crops in diversified farming systems to enhance overall farm productivity. This will reduce food insecurity and poverty among rural farm households and the entire rural population. Originality/value These results indicate that to improve crop-livestock productivity through diversification, and reduce the effect of climate variability, it is imperative to provide the enabling environment that will facilitate and encourage production of these output combinations among smallholders in Ghana. The empirical results enhance the literature by providing empirical evidence of the complementary synergies and economies of diversification in integrated farming systems and, hence, make recommendations for improving these farming systems. Peer review The peer review history for this paper is available at: https://publons.com/publon/10.1108/IJSE-04-2019-0274.