Job Market Paper
Smallholder maize market participation and choice of marketing channel in the presence of liquidity constraints: Evidence from Zambia (with Nicole Mason-Wardell, David Mather, Brian Chisanga, and Thomas Jayne) | first author
Abstract: Increasing smallholders’ market participation as food grain seller is acknowledged as a potential pathway towards agricultural commercialization and structural transformation. Thus, governments of developing countries sometimes intervene in domestic grain markets through grain purchase programs with the aim of providing market access to small farmers in rural areas where agricultural markets are believed to be uncompetitive. However, the benefits of such programs may not reach farmers who face production constraints that inhibit their ability to produce a marketable surplus. Specifically, there is a gap in literature in understanding how liquidity constraints that limit smallholders’ investments in productivity-enhancing agricultural inputs can affect their market participation and choice of marketing channel. In this article we explore this issue in context of smallholder maize growers in Zambia during a period when the country’s parastatal marketing board – the Food Reserve Agency (FRA) – operated alongside private buyers and purchased large volumes of maize at a pan-territorial price that exceeded average market prices. We find that smallholders who were liquidity constrained during the production periodproduced lower maize output, were less likely to sell maize, and less likely to sell to the FRA, as compared to those who did not face liquidity constraints. The key takeaway is that market policies, like those of the FRA, are less likely to benefit smallholders if they do not possess the resources to expand production. Rather, the benefits of such policies can be disproportionately captured by relatively wealthier farmers.
Does reducing import-related transactions cost increase fertilizer imports? Evidence from a cross-country panel analysis (with Nicole Mason, Maria N. Wanzala, and Saweda Liverpool-Tasie) (Abstract coming soon!)
Abstract: Developing nations pursuing the dual goals of development and conservation face high social and political costs in adopting pro-conservation policies. Such costs often hinder in embodying environmental valuation of natural resources into the market prices. This study has dealt with this macro issue by understanding the case-specific implications of intensive agricultural practices on the environment in the state of Punjab. The study is based on the primary data from 80 farmers of Punjab following the paddy-wheat rotation. The input use data of the crops have been used to compute the monetary cost of cultivation and the corresponding environmental cost has been expressed as carbon equivalents (CE). The analysis of variance has been carried out to address the issue of differing efficiencies of production across different landholding categories. The study has revealed that paddy crop is more expensive than wheat crop in both monetary and environmental terms and small farmers demonstrate larger inefficiencies in production as compared to medium and large farmers. Electricity has been found to be the major component for environmental cost for paddy while diesel and fertilizer occupied significant shares for both crops. Moreover, electricity for agricultural purposes being completely subsidized in Punjab, has not been reflected in the monetary cost, thus destroying an important incentive for rational use of resources.
Abstract: The rice and wheat crops are of major importance in the Indian context. They are staple food grains of India and were instrumental in ensuring food sufficiency of the nation. However, intensive agricultural practices associated with these crops are posing a threat to their viability. These trends are more prominent in the Indo-Gangetic plains of India, where monocultures of rice and wheat are widespread. This paper is an attempt to study these trends in the state of Punjab, one of the states following the most intensive agricultural practices. The study is based on secondary data spanning four decades from 1980 to 2010. It was found that over this time period fertilizer consumption increased 2.5 times, land under irrigation 1.8 times and electricity consumption 2.2 times. Simultaneously, productivity remained relatively stagnant while cost of cultivation rose steeply. These trends indicate towards the unsustainability of the present patterns of production. Recommended conservation techniques to overcome this problem are also documented along with the constraints being faced in their successful implementation.