Can Producer Associations Improve Rural Livelihoods? Evidence from Farmer Centres in India

Abstract

Rural producer associations are considered a potential community-driven solution to the problems of smallholder agriculture. This article evaluates the impact of organising female farmers into producer associations in Gujarat, India. The initiative provided training, information, access to inputs, risk mitigation, and market linkages. Over 18 months, the programme weakly increased members’ non-farm income and access to output markets. It had stronger impacts on members’ awareness and utilisation of financial services. Impacts were heterogeneous, varying by pre-existing socioeconomic conditions. These findings suggest that producer associations can lower transaction costs for smallholders, but that poverty alleviation may be a longer-term prospect.     

The Impact of Trade Liberalisation on Household Welfare in a Developing Country with Imperfect Labour Markets

Abstract

I develop an empirical methodology to assess the distributional impact of trade-induced price shocks when labour markets are imperfect. The proposed methodology relates exogenous variations in prices to changes in household welfare using a separable agricultural household model that flexibly allows the data to determine the degree of labour market imperfections. Applying this approach to Vietnam, I investigate the impact of agriculture trade liberalisation between 1993 and 1998 on overall household welfare, measured using per capita household expenditure. I find that accounting for labour market imperfections results in welfare gains that are nearly four times larger than those found when assuming complete labour markets.     

Mobile Phones and Financial Services in Developing Countries: a review of concepts,methods, issues,evidence and future research directions

Abstract

Research concerning mobile phones and financial services in developing countries has undergone rapid growth in recent years. This paper seeks to improve understanding of the current state of knowledge by reviewing the content of 43 research articles. A framework is developed that differentiates research activity according to a lifecycle model that incorporates financial needs, design, adoption and impact. The review finds that research to date has resulted in a high level of practitioner involvement, providing valuable links from the mobile phone industry to the research community but, as a consequence, research has become too narrowly defined. Thus, issues of assessing financial need and the measurement of impact have been comparatively neglected, while application design and adoption studies have received greater attention. This paper suggests a future direction for research and practice within the mainstream of micro-financial services and finance for the poor, correcting this imbalance, and contributing towards the mobiles-in-development-research agenda.     

Look Who's Talking: The Impacts of the Intrahousehold Allocation of Mobile Phones on Agricultural Prices

Using data from the Philippines, we study the impact of mobile phones on the prices agricultural producers receive for their cash crop. We first look at the impact on price of mobile phone ownership at the household level. Because this masks a considerable amount of heterogeneity, we then look at the impact on price of the intrahousehold allocation of mobile phones. We find that whether the household owns a mobile phone has no impact on price, but whether a farmer or spouse owns a mobile phone is associated with a 5- to 8-per cent increase in price.     

Food Price Volatility and Vulnerability in the Global South: considering the global economic context

Abstract

Most official analyses of the recent food price crisis have focused on the market fundamentals of supply and demand for food as key explanatory factors. As a result, most of the policy recommendations emanating from the major international institutions include measures to boost supply and temper demand. In this paper I argue that international macroeconomic factors played a key role in fostering both price volatility and vulnerability, and as such they need to be recognised. With respect to the recent price volatility, the weak US dollar and speculation on agricultural commodities futures markets greatly influenced agricultural prices. With respect to price vulnerability, global economic forces played an important role in dampening production incentives in the world's poorest countries over the past 30 years, leading to a situation of food import dependence. Policy responses to the food crisis must consider the role of these broader international macroeconomic forces—both in the immediate context and their longer term impact.     

Cows,Missing Milk Markets,and Nutrition in Rural Ethiopia

Abstract

In rural economies encumbered by significant market imperfections, farming decisions may partly be motivated by nutritional considerations, in addition to income and risk factors. These imperfections create the potential for farm assets to have direct dietary impacts on nutrition in addition to any indirect effects via income. We test this hypothesis for the dairy sector in rural Ethiopia, finding that cow ownership raises children’s milk consumption, increases linear growth, and reduces stunting. We also find that household cow ownership is less important where there is good access to local markets, suggesting that market development can substitute for household cow ownership.     

The Contradictory Effects in Efficiency and Citizens’ Participation when Employing Geo-ICT Apps within Local Government

Abstract

With the increasing use of web-based mapping applications, inter-mediation between public planning agencies and citizens is changing. This article investigates how one form of inter-mediation, geo-ICT-enabled apps (applications on mobile phones and/or internet that use maps or locations as basic references for any functional analysis), influences the degree of efficiency and participation in managing public space. The theoretical assumption here is that such apps encourage information disclosure and therefore have the potential to make a local government more responsive and transparent. Drawing on observation, interviews, and document and web content analysis conducted as part of a case study, this article suggests that the apps have indeed enhanced one municipality’s response and have made citizens more active in uploading their complaints. However, unexpected and contradictory effects include an increase in trivial complaints, which has made the handling of reports less efficient, and the emergence of opportunistic behaviour by third parties on the basis of the complaints, which has made the services less effective. Consequently, the assumed causal relation between enhanced citizen participation and increased transparency and information disclosure requires an adaptation that incorporates such wicked effects.     

Market,Freedom and the Illusions of Microcredit. Patronage,Caste, Class and Patriarchy in Rural South India

Abstract

As a market tool, microcredit is expected to promote individual freedom, for women in particular. By drawing on a southern Indian case, this paper argues that microcredit is in fact shaped by the power structures it is supposed to eradicate. Even if they are partly reshaped, local structures of power remain unavoidable to protect populations (something that microcredit fails to do) but also to build the microcredit market and ensure its legitimacy, for donors, local political arenas and local populations. Far beyond microcredit, our findings question the uneasy relationships between markets and individual freedoms.     

Regulations,Brokers, and Interlinkages: The Institutional Organization of Wholesale Markets in India

There is a vigorous debate on the liberalisation of heavily regulated agricultural markets in India. A crucial institutional characteristic is the role of state regulated brokers in wholesale markets. Relying on data from a unique survey in Uttarakhand, a state in North India, we find that regulations on margins are ineffective as most brokers charge rates that significantly exceed the regulated ones. We also find that a majority of farmers self-select into long-term relationships with brokers. These relationships allow some of the farmers to interlink credit and insurance markets to the agricultural output market. This interlinkage does however not appear to be an instrument for farmer exploitation (as it does not lead to worse inputs, high interest rates, or lower implicit output prices), but is seemingly an extra service by brokers as to establish farmer loyalty to them and thus to ensure future supplies.     

Social Networks and Factor Markets: Panel Data Evidence from Ethiopia

We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. We use detailed longitudinal household survey data and employ fixed effects estimation approaches to identify the effect of iddir membership on factor market transactions among farmers. We find that joining an iddir network improves households’ access to land, labour and credit transactions. Our findings also hint that iddir networks may crowd-out borrowing from local moneylenders (locally referred as ‘Arata Abedari’), a relatively expensive credit source. These results suggest that non-market institutions can play crucial roles in facilitating market transactions.     

Wage Subsidy and Labour Market Flexibility in South Africa

Abstract

We use a general equilibrium model to analyse the employment effects and fiscal cost of a wage subsidy in South Africa. We capture the structural characteristics of the labour market with several labour categories and substitution possibilities, linking the economy-wide results to a micro-simulation model with occupational choice probabilities to investigate the poverty and distributional consequences. The employment impact depends greatly on the elasticities of substitution of factors of production, being very minimal if unskilled and skilled labour are complements in production. The impact is improved by supporting policies, but the gains remain modest if the labour market is rigid.     

Technical change and dualism within agriculture in India

The dichotomy between subsistence and market‐oriented farmers in many developing countries is a well‐recognized fact. There have been empirical studies in India of the differences between subsistence and market‐oriented or ‘commercial’ farmers; and interest is now developing in the impact of the new agricultural policy on dualism within agriculture. While the theoretical literature deals extensively with dualism between a traditional agricultural sector and an advanced industrial sector, dualism within the agricultural sector itself is less discussed.¹

However, this dualism has become of increasing practical importance in India with the introduction of the ‘New Strategy for Agricultural Development’ in 1966–67.² This policy concentrates on raising output per acre very sharply, especially for the food crops, by the use of new high‐yielding varieties of seeds and complementary inputs. In the beginning, at least, these measures are to be confined to a small part of the total acreage under food grains. Critics have also alleged that they have been confined to the larger farmers, thus accentuating the existing inequality of agricultural incomes, and that this inequality must have several undesirable social, economic and political consequences. But these consequences have not been elaborated, partly for lack of data, but partly also because the theoretical implications of technical change for a dualist development of agriculture have not been adequately discussed. The first object of this paper is to examine the changes in income distribution within agriculture when technical progress is confined to the commercial sector. Thereafter we show that if dualism cannot be directly attacked by such measures as land reform, the second‐best policy from the point of view of maximizing output may in fact be to encourage the use of ‘new’ inputs, such as fertilizers, in the commercial sector.     

On the use and misuse of profit functions for measuring the price responsiveness of peasant farmers: A comment

The standard profit function approach has been applied successfully in a number of LDCs to measure the price responsiveness of peasant farmers. Yet, various problems afflict this approach including, but not restricted to, the existence of non‐competitive market structures, zero‐valued observations, exclusion of relevant variables, lack of participation in output and/or input markets, and endogeneity of input and/or output prices. The impact of these problems on estimation results, however, can be minimised through modifications and adaptations of the standard approach, better specification of the underlying technology, and the use of selected functional forms.     

'Out Of Sight, Out Of Mind': Assessing The Impact Of Markets For Children's Residential Care

This article is concerned with assessing the effectiveness of markets for complex professional services in social care. The issue is explored through an account of developments in the children's residential care sector. Over the past five years there has been a steady expansion in the role of external markets in this area. However, this was not required by the Children Act 1989 and has become the subject of considerable debate between policy makers and practitioners. While some favour an extension of choice, others argue that a further decline in local authority run provision will be both costly and detrimental in terms of meeting key policy goals. In order to assess these claims, reference is made to the findings of a study of purchasing practices for children's residential care in twelve local authorities in England and Wales. The impact of the emerging market is analysed along two dimensions. Firstly, we assess how far it is operating efficiently, concentrating on market structure, information and transaction costs. Secondly, attention is given to the impact of market changes on the policy objectives of: localized placements; ensuring adequate safeguards; and matching needs and services. The results reveal that there have been significant costs associated with markets in children's services. In a context of government efforts to promote modes of service delivery on the basis of 'what works', these difficulties have certain implications. Not only do they draw attention to the need for greater collaboration between purchasers and providers, they also point to the continued relevance and usefulness of local authority managed provision.     

Some management objectives of the peasant farmer: An analysis of risk aversion in the choice of cropping pattern,Surat district,India

The basis of peasant farmers’ decision‐making is a critical factor in the formation of agricultural policy in developing countries. If farmers operate efficiently, implying that profits are maximised, then incomes can only be increased by introducing improved methods of production; if farmers do not act efficiently, it may be desirable to reallocate resources within traditional agriculture. Similarly, predictions of farmers’ responses to price changes and thus the impact on aggregate production and employment¹ are based on assumptions regarding farmers’ management objectives.

The primary aim of this paper is to examine empirically the cropping patterns chosen by a group of peasant farmers in Surat District, India, using a simple model of risk aversion. The data show that the observed behaviour corresponds very closely to the hypothesis that farmers allocate land to different crops by striking some balance between the competing criteria of (a) increasing income and (b) decreasing risk measured by income variability. The actual definition of risk is, in this case, the mean absolute deviation of income around its mean level. Secondly, the contrasting importance of risk and credit between irrigated and unirrigated farms is illustrated, and finally, some policy implications are discussed briefly.     

Risk,Credit Constraints and Financial Efficiency in Peruvian Agriculture

Based on a panel data set, we use a two-stage analysis to evaluate the effects of access to formal credit on financial efficiency of farms in northern Peru. The first stage uses non-parametric data envelope analysis to estimate farm-specific measures of financial efficiency; 28 per cent of farmers are financially inefficient and credit constraints reduce profits of these farmers by an average of between 17 and 27 per cent. The second stage uses Tobit regression to evaluate the determinants of financial inefficiency; the results point to uninsured risk as a key determinant of financial inefficiency and suggest that policies to strengthen agricultural insurance markets would likely pay large dividends in rural Peru.     

Cattle Markets Integration and Price Discovery: The Case of Mali

This article analyses the level of integration in 10 cattle markets in Mali. The results indicate a limited interdependence among markets where, in majority of cases, more than 70 per cent of price variation is due to own-price shocks. However, the Ségou market exhibited a high level of interaction with other markets, behaving mostly as a price information receiver. Some markets behaved as sources of price information, however, without taking a clear price leadership role. This low level of market integration may be attributed to limited access to livestock markets and timely price information.     

The impact of the commonwealth preference system on the exports of Latin America to the United Kingdom

This paper quantitatively assesses the effect of value chain development projects on market linkages of small-scale farmers of a staple crop and agricultural income. We focus on Nicaraguan bean producers participating in a value chain development project. Using a panel data set, we apply difference-in-differences and instrumental variables estimators to identify causal effects of programme participation. We first quantify the positive direct effect of training on bean sales in terms of quantity and percentage of beans sold in linked markets. Second, we show that intensified commercialisation contributes to total agricultural income, suggesting a positive indirect effect of the intervention. Our results indicate that market linkage of smallholder farmers requires different sets of intervention tools than farm technical assistance.     

Exchange Rate Pass-Through in Developing and Emerging Markets: A Survey of Conceptual,Methodological and Policy Issues,and Selected Empirical Findings

Abstract

Global integration has increased the international linkages of financial markets for emerging market countries. A key channel for the international transmission of inflation and economic cycles is from exchange rate movements to domestic prices, known as exchange rate pass-through (ERPT). This article reviews the conceptual, methodological and policy issues connected with ERPT in emerging market and developing countries, and critically surveys selected empirical studies. A key contribution is to categorise and compare the heterogeneous methodologies used to extract ERPT measures in the empirical literature. Single equation models and systems methods are contrasted; frequent misspecifications that produce unreliable ERPT estimates are highlighted. The discerning policy-maker needs to ascertain by which methods ERPT measures were calculated, the controls and restrictions applied, and the time frame and stability of the estimates.     

Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research

Abstract

This paper reviews the literature on taxation of the informal economy, taking stock of key debates and drawing attention to recent innovations. Conventionally, the debate on whether to tax has frequently focused on the limited revenue potential, high cost of collection, and potentially adverse impact on small firms. Recent arguments have increasingly emphasised the more indirect benefits of informal taxation in relation to economic growth, broader tax compliance, and governance. More research is needed, we argue, into the relevant costs and benefits for all, including quasi-voluntary compliance, political and administrative incentives for reform, and citizen-state bargaining over taxation.