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According to standard economic theory, households should equate the marginal revenue product of an input across activities within the household. Using data on agricultural plots and non-farm enterprises in Malawi, we test whether the marginal revenue product of labor (MRPL) is equal across agricultural and non-farm production within a household. We control for many household and production characteristics, including household fixed effects, and find agricultural MRPL to be consistently higher than non-farm MRPL. These results hold when restricting estimation to periods of high and low non-farm labor allocation. Further analyses suggest both production and price risk may be partially responsible for these deviations from MRPL equality. We also show that comparing average revenue products of labor is not sufficient evidence for claiming allocative inefficiency. In our data, the average revenue products of labor lead to an erroneous conclusion, reiterating the need to compare marginal products when testing for allocative efficiency.
Research report, comparison, men-headed households, female headed households, small farms, Malawi - sample survey 1983-1984, survey areas, land tenure, household income, nonfarm employment, participation in farmers associations. References, statistical tables.
By directing increasing shares of their farm production to the market and, thereby, realizing greater incomes, farming households can accelerate local rural economic development. In this study, we examine household and spatial factors that may drive smallholder farming households in Malawi to produce and sell maize, groundnut, and soyabean. Two cross-sectional analyses are done using household level data from rounds of the Malawi Integrated Household Survey (IHS). First, using data for farming households from the fifth IHS (2019/20) in a series of weighted logistical models, we examine which of a set of household and spatial level factors are associated with a household producing each of the three crops. For maize and groundnut, we extend the analysis by similarly identifying the factors associated with whether a producing household sells any of their maize or groundnut, and if, they do, whether they sell more than half of their harvest. The second analysis consists of replicating the logistical models for production and sales using household data from the fourth IHS (2016/17) and comparing those results to the results obtained from the fifth IHS. This is done to identify whether any drivers of the production and sale of the three crops are changing over time. Overall, only a few factors are consistently associated with a farming household choosing to produce a particular crop or to sell part of their production of the crop. We also see limited changes between 2016/17 and 2019/20 in the drivers of the production and sale of these crops. However, the strength of the positive associations between landholding size and the commercial production of the three crops intensified between the two surveys. This suggests that as landholdings become smaller with continuing population growth, commercial production will increasingly be limited to those households with the largest landholdings. Government and other stakeholders in rural economic development can consider the evidence from these analyses in developing strategies to foster greater diversity in employment in rural economies across Malawi away from agriculture, while nonetheless promoting increased production by those smallholders in a position to participate profitably in the value chains for these crops.
A joint FAO and World Bank study which shows how the farming systems approach can be used to identify priorities for the reduction of hunger and poverty in the main farming systems of the six major developing regions of the world.
ILO pub-WEP pub. Comparison of the impact of agrarian structure on agricultural production and agricultural employment in developing countries - comprises case studies of relationships between farm size, labour intensiveness, land utilization, agrarian reform and technological change in Brazil, Colombia, the Philippines, West Pakistan, India and Malaysia, concludes that small farms are more productive than larger farms, and falls within the framework of the WEP. Graphs, references and statistical tables.
Agriculture employs three-quarters of the population of Malawi. It makes up more than forty percent of the economy and sixty percent of all exports. Yet productivity in agriculture--measured as the amount of output for a given amount of inputs--is considerably lower than it could be, given Malawi's agricultural resources. Efforts to expand the economy and reduce poverty must involve agriculture. Where should the Government of Malawi invest?
This book takes forward our understanding of agricultural input subsidies in low income countries.
This book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far. The model assumes that households are price-takers and is therefore recursive. The decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor. Comparative results on selected elasticities are presented for a number of economies. The empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive. The book summarizes the implications of agricultural pricing policy for the welfare of farm households, marketed surplus, the demand for nonagricultural goods and services, the rural labor market, budget revenues, and foreign exchange earnings. In addition, it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition, nutritional status, health, saving, and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings. Methodological topics, primarily the data requirements of the basic model and its extensions, along with aggregation, market interaction, uncertainty, and market imperfections are discussed. The most important methodological issues - the question of the recursive property of these models - is also discussed.
An exploration of preindustrial agriculture that applies insights from biodemography, physiological ecology, and household demography.