Seasonality, precautionary savings and health uncertainty: Evidence from farm households in central Kenya

The high prevalence of risks in low income economies makes managing uncertainty critical for productivity and survival. This paper analyzes seasonal changes in farm households’ per capita consumption and saving in response to weather and health shocks. Using a sample of 196 households in central Kenya, it tests the notion that people save most of their transitory income, and examines their precautionary saving motives. The results show that the propensity to save out of transitory income is about a fifth of what the permanent income hypothesis postulates. The propensity to save differs by wealth, with the poor exhibiting stronger precautionary motives towards rainfall variability. But the wealth effect is weak, suggesting that the asset base is vulnerable even for the better-off. However, precautionary savings tend to increase with wealth among HIV/AIDS affected households. Since illness is associated with higher consumption, and therefore less investment, we find more volatile consumption for HIV/AIDS affected households

Labor markets and labor allocative efficiency among farm households in western Kenya

This paper evaluates how efficiently farm households allocate labor between farm and offfarm activities. It estimates farm and off-farm labor supply functions to determine the factors that influence labor allocation. Both the shadow wage and the off-farm wage rate are included as regressors in the supply functions. The study reveals that, on average, farm households are inefficient, but when linked to labor markets their productivity and internal efficiency increase. The decision to sell labor is influenced by location, and off-farm employment is difficult to find, particularly for the better educated. Interventions should aim to increase opportunities for off-farm employment for persons with skills or with higher than the basic level of education, and to reduce the cost of participating in labor markets, for example by improving rural infrastructure. Addressing failures in rural financial markets would save poor households from having to sell their labor for less than they get from their farm

Kansen en bedreigingen van het EU-landbouwbeleid voor ontwikkelingslanden

Handelsbeperkende maatregelen tegenover ontwikkelingskansen voor derde wereld lande

Impact of Access to Credit on Farm Productivity of Fruit and Vegetable Growers in Chile

The objective of this paper is to analyze the factors that determine productivity of fruit and vegetable growers in central Chile, focusing especially on the effect of short-term credit on farm productivity for market-oriented farmers. We explicitly test for possible selection bias using a panel data set from a survey conducted in 2006 and 2008 with 177 farmers. Our results indicate that short-term credit does not have an impact on farm productivity, while other factors as education and the type of activity do. These results suggest that other providers of credit, such as informal credit institutions, may relax short-term credit constraints in rural financial markets in Chile

Determinants of labour mobility within smallholder farms in western Kenya and implications for labour use efficiency

Significant gains can be made if smallholder farms’ households can change their livelihood strategy. This paper is concerned with how smallholder farmers allocate labour within their farms and the barriers to cropping activities with higher outcomes. Efficiency of households in labour use across the farm was evaluated by comparing labour returns across various crops while controlling the variability in bio-physical characteristics of plots. The expectation was that returns to a single factor of production would be equal, an indication that households are likely to benefit from interventions aimed at improving their livelihood. The results obtained reveal that farmers allocate comparatively, more labour to food crops than to market-oriented crops. This suggests that labour mobility within smallholder farms is constrained. Interventions which reduce the marketing costs for food and cash crops; increase participation in labour markets; and improve other rural markets like the financial will, relax the labour constraint thereby empowering smallholder farms’ households to allocate labour more efficiently on their farms