FARM BENEFITS AND NATURAL RESOURCE PROJECTS IN HONDURAS AND EL SALVADOR

A model of conservation adoption, diversification and household income, including farm and off-farm sources was formalized, wherein households simultaneously allocate assets to different activities. The mapping of assets to household income through both off and on farm activities can conceptually be considered as a production process, with assets corresponding to factors of production and income as the output. Either adoption of conservation technologies and farm output diversification are influenced by participation in natural resource management programs. Therefore, these technological improvements should foster farm production and productivity and, consequently, should be reflected in a greater household income,. Finally, household income improvement is considered a necessary condition for sustainability of the changes introduced by the projects. Overall, the results indicate that the variables more directly reflecting land allocation, such as area with staples and cash crops, output diversification and conservation practices are associated with the greatest gains in household income. Output diversification significantly decreases income from staple crops and greatly increases cash crop income. These results reaffirm the strategic role of diversification in fighting rural poverty. However, gains stemming from a more diversified income portfolio do not occur without cost, since an extra item added to the farm plan implies a reduction in the production of corn and beans (staples). This trade-off between diversification and subsistence food production suggests that switching to a more market-oriented production pattern may increase household food insecurity.Consumer/Household Economics,

Productividad total de los factores en la agricultura chilena: 1961-1996

Resumen: El objetivo de este trabajo es medir el cambio de la productividad en la agricultura chilena durante el período 1961-96. La Productividad Total de los Factores (PTF) fue calculada mediante índices Törnqvist. Los datos utilizados para estimar estos índices incluyen precios y cantidades de 51 cultivos, de la mano de obra, de la tierra, del capital y de factores intermedios. El análisis revela que mientras los productos crecieron un 2,69% anual, el uso de factores de producción bajó un 0,09%; por lo tanto, la PTF creció a una tasa promedio anual del 2,78% entre 1961 y 1996. Se realizó además un análisis para siete períodos correspondientes a diferentes regímenes políticos. La PTF creció a un promedio anual de 1,83% con Alessandri (1961-64), 3,12% bajo el período de Frei Montalva (1965-70), 1,52% durante Allende (1971-73), 6,11% en la primera parte del régimen de Pinochet y -0,28% en el segundo período de Pinochet (1981-89), 3,12% bajo Aylwin (1990-93) y 5,28% bajo Frei Ruiz-Tagle (1994-96). Los resultados sugieren que el programa de reforma agraria implementado en los sesenta no tuvo un efecto negativo en el crecimiento de la PTF. Palabras Claves: Productividad Total de los Factores; Indice Törnqvist; Agricultura; Chile Abstract: The main objective of this paper is to determine the productivity growth in the Chilean Agricultural sector during the 1961-1996 period. Total Factor Productivity (TFP) was calculated using the Törnqvist index, which is a discrete approximation to the Divisia index. The data used to estimate these indexes are prices and quantities for 51 crops, and for four inputs - labor, land, capital and intermediate factors. The rate of annual growth for the period 1961-96 was 2,69% and 0,09%, for products and inputs, respectively. Therefore, the TFP grew at an average annual rate of 2,78%. Given a significant annual variability in TFP growth, an analysis was carried out for seven sub-periods corresponding to different political regimes. TFP grew at an annual average of 1,83% with Alessandri (1961-64), 3,12% under the period of Frei Montalva (1965-70), 1,52% during the Allende years (1971-73), 6,11% during the first part of the Pinochet regime and 0,28% in the second period of Pinochet (1981-89), 3,12% during Aylwin (1990-93) and 5,28% under Frei Ruiz-Tagle (1994-96). The results suggest that the land reform program implemented in the 1960s did not have a negative effect on TFP growth, as has been previously argued by some authors.Total Factor Productivity, Törnqvist Index, Agriculture, Chile, Productivity Analysis, D24, O33,

Productividad total de los factores en la agricultura chilena: 1961-1996

[EN] The main objective of this paper is to determine the productivity growth in the Chilean Agricultural sector during the 1961-1996 period. Total Factor Productivity (TFP) was calculated using the Törnqvist index, which is a discrete approximation to the Divisia index. The data used to estimate these indexes are prices and quantities for 51 crops, and for four inputs —labor, land, capital and intermediate factors. The rate of annual growth for the period 1961-96 was 2,69% and –0,09%, for products and inputs, respectively. Therefore, the TFP grew at an average annual rate of 2,78%. Given a significant annual variability in TFP growth, an analysis was carried out for seven sub-periods corresponding to different political regimes. TFP grew at an annual average of 1,83% with Alessandri (1961-64), 3,12% under the period of Frei Montalva (1965-70), 1,52% during the Allende years (1971-73), 6,11% during the first part of the Pinochet regime and –0,28% in the second period of Pinochet (1981-89), 3,12% during Aylwin (1990-93) and 5,28% under Frei Ruiz-Tagle (1994-96). The results suggest that the land reform program implemented in the 1960s did not have a negative effect on TFP growth, as has been previously argued by some authors.[ES] El objetivo de este trabajo es medir el cambio de la productividad en la agricultura chilena durante el período 1961-1996. La Productividad Total de los Factores (PTF) fue calculada mediante índices Törnqvist. Los datos utilizados para estimar estos índices incluyen precios y cantidades de 51 cultivos, de la mano de obra, de la tierra, del capital y de factores intermedios. El análisis revela que mientras los productos crecieron un 2,69% anual, el uso de factores de producción bajó un 0,09%; por lo tanto, la PTF creció a una tasa promedio anual del 2,78% entre 1961 y 1996. Se realizó además un análisis para siete períodos correspondientes a diferentes regímenes políticos. La PTF creció a un promedio anual de 1,83% con Alessandri (1961-64), 3,12% bajo el período de Frei Montalva (1965-70), 1,52% durante Allende (1971-73), 6,11% en la primera parte del régimen de Pinochet y -0,28% en el segundo período de Pinochet (1981-89), 3,12% bajo Aylwin (1990-93) y 5,28% bajo Frei Ruiz-Tagle (1994-96). Los resultados sugieren que el programa de reforma agraria implementado en los sesenta no tuvo un efecto negativo en el crecimiento de la PTF.Olavarría, JA.; Bravo-Ureta, B.; Cocchi, H. (2004). Total factor productivity in the chilean crop sector: 1961-1996. Economía Agraria y Recursos Naturales - Agricultural and Resource Economics. 4(8):121-132. doi:10.7201/earn.2004.08.07SWORD1211324

Soil conservation, output diversification and farm income: Evidence from hillside farmers in Central America

This dissertation studies the determinants of adoption of soil conservation technologies, output diversification and income-generating activities among hillside farmers in Central America. The analysis is based on a cross-sectional data set of 695 farm households obtained from surveys applied to representative samples of beneficiaries of two natural resource management projects in El Salvador and Honduras. A model of adoption of conservation technologies, farm output diversification and income was formalized, wherein households simultaneously allocate natural and human capital to three different income-generating activities: staples or subsistence crops, cash crops, and off-farm employment. ^ The results indicate the greatest gains in household income are associated with the activities more directly related with land allocation, such as area with cash crops, output diversification and soil conservation practices such as crop-mulching, green manure, and minimum tillage. In contrast, we found that conservation structures such as terraces, stonewalls and drainage ditches are not profitable at the farm-level, at least in the short run. These results also reaffirm the strategic role of portfolio diversification and natural resource management in fighting rural poverty, since land allocation away from the traditional production of subsistence crops, like corn and beans, substantially increases household income. ^ Human capital, measured by average household education, soil erosion awareness, participation in training activities, frequency of rural extension visits, and years of involvement with a natural resource management project, plays a positive and significant role on the determination of income levels and adoption of conservation technologies. Farmers involved in training other farmers and participating in communal organizations are also more likely to adopt conservation technologies, which reveals the importance of the social dimension on the adoption of conservation technologies. Education plays a significant and positive role in all income-generating activities. The returns from schooling are highest in cash crop production and off-farm activities and lowest in food staple production. These returns to education by economic activity suggest that farm households may reap rewards from schooling by abandoning traditional agriculture, where returns from schooling are limited, in favor of modern agriculture or non-crop production, where the returns are higher. Larger farms are more engaged in conservation activities, implying that poorer farmers may face a larger risk of land degradation. ^ Several public policy implications are drawn from the analysis, including: (a) Support for farm diversification; (b) Promote conservation practices and structures based on detailed studies of expected profitability; (c) Improve the use of incentive mechanisms wherein the farmer is more a client than a beneficiary; (d) Guarantee the access to formal education and technical assistance via rural extension; (e) Stimulate the development of communal organizations; (f) Facilitate the access to land ownership; (g) Examine the optimal duration of the natural resource management projects; and (h) Develop local labor markets and infrastructure to expand job opportunities to improve household income and quality of life.

On-Site Costs and Benefits of Soil Conservation Among Hillside Farmers in El Salvador

This study analyses the relationships between farm income, adoption of conservation technologies and output diversification among PAES participants by comparing their performance at two points in time, 2002 and 2005, and against non-participants (control group) in 2005. The indicators reveal that the soil conservation and agroforestry component of PAES has been highly profitable. The outcome of the study shows crop diversification and soil conservation practices exhibit a strong positive association with the length of farmers' involvement with PAES and their participation in social organizations, and the positive association between conservation practices and income contrasts with the effects of conservation structures, which is negative but non-significant

Output Diversification among Small-Scale Hillside Farmers in El Salvador

In this study the authors analyze the degree of output diversification (anything produced in the farm that is not a subsistence crop, i.e., corn or beans) among 520 hillside farmers in El Salvador. Techniques were employed to construct a comparison group that resembles the treatment group based on observed characteristics while statistical controls were applied to measure differences on diversification for the treatment group at two points in time (2002 and 2005) and between the treatment and comparison groups at a given point in time (2005), allowing for before-after and with-without comparisons. The outcome of the study showed that overall, more diversified farm plans are positively associated with farm size, schooling, participation in communal organizations, and with the frequency of extension visits, which captures the PAES intervention. Also, farmers involved with PAES have significantly increased the number of agricultural activities in their farms between 2002 and 2005

On-Site Costs and Benefits of Soil Conservation Among Hillside Farmers in El Salvador.

This study analyses the relationships between farm income, adoption of conservation technologies and output diversification among PAES participants by comparing their performance at two points in time, 2002 and 2005, and against non-participants (control group) in 2005. An endogeneity test confirms that conservation adoption and diversification are endogenous. Therefore, the diversification and adoption equations are estimated first and the predicted values of both endogenous variables are used in a second step as additional explanatory variables in the farm income equation where the latter is estimated using the Tobit technique. The Tobit results are then used to generate the net present value (NPV) and internal rate of return (IRR) of the soil conservation and agroforestry component of PAES between 1998 and 2005. Crop diversification and soil conservation practices exhibit a strong positive association with the length of farmers’ involvement with PAES and their participation in social organizations. Soil conservation practices and crop diversification, measured by an entropy index, significantly increase farm income, which highlights the strategic role of diversification in fighting rural poverty. The positive association between conservation practices and income contrasts with the effects of conservation structures, which is negative but non-significant. A substantial body of literature increasingly recognizes that structures are expensive to build and maintain whereas they add little to the land productivity in the short run. Such drawbacks may clearly affect the profitability of these conservation technologies.Then we compare cost and benefit figures over the life-span of PAES (1998-2005) to compute the IRR and NPV. Average income gains per family per year amount to $280, while the NPV is$13,674,100 at a 12% discount rate with an IRR of 48.45%. These indicators clearly reveal that the soil conservation and agroforestry component of PAES has been highly profitable, which is in line with similar evaluations of natural resource management programs in Central America and elsewhere. Finally, the estimates of NPV and IRR are robust, according to diverse scenarios generated using bootstrapping and sensitivity analysis.

Output Diversification Among Small-Scale Hillside Farmers In El Salvador.

In this study we analyze the degree of output diversification (anything produced in the farm that is not a subsistence crop, i.e., corn or beans) among 520 hillside farmers in El Salvador. Half of those farmers have participated in the Environmental Program for El Salvador (PAES) implemented between 1998 and 2005. This study is an ex-post evaluation of PAES for which there was no baseline and no randomized control group. Therefore, quasi-experimental techniques were applied to select the treatment and comparison groups after the intervention occurred. Matching techniques were employed to construct a comparison group that resembles the treatment group based on observed characteristics while statistical controls were applied to measure differences on diversification for the treatment group at two points in time (2002 and 2005) and between the treatment and comparison groups at a given point in time (2005), allowing for before-after and with-without comparisons. Count regression models are used to econometrically estimate diversification, while Probit models evaluate factors associated with disadoption of a diversified cropping system over the 2002-2005 period. Overall, more diversified farm plans are positively associated with farm size, schooling, participation in communal organizations, and with the frequency of extension visits, which captures the PAES intervention. Also, farmers involved with PAES have significantly increased the number of agricultural activities in their farms between 2002 and 2005. The Probit model estimated to examine disadoption indicates that schooling, frequency of extension visits, erosion perception and participation in communal organizations are significant contributors to reducing the probability of disadoption of diversification. In turn, disadoption is significantly associated with farm size and land tenure.--

Adoption of Soil Conservation Technologies in El Salvador: A cross-Section and Over-Time Analysis.

This paper examines the determinants of adoption of soil conservation technologies among farmers participating in the Environmental Program of El Salvador (PAES). A sample of PAES participants was surveyed in 2002, from which a sub-sample was re-surveyed in 2005 along with a control group of non-participating households. This is an ex-post evaluation of PAES and there is no baseline and no randomized control group. Therefore, quasi-experimental techniques were applied to select the treatment and comparison groups after the intervention occurred. Matching techniques were employed to construct a comparison group that resembles the treatment group based on observed characteristics while statistical controls were applied to measure differences on adoption of soil conservation for the treatment group at two points in time (2002 and 2005) and between the treatment and comparison groups at a given point in time (2005), allowing for before-after and with-without comparisons. Two adoption models (Conservation Practices and Conservation Structures) were estimated using two separate samples (PAES beneficiaries 2002-2005 and beneficiaries-control group 2005). We then analyzed the factors associated with disadoption of the technologies in 2005 relative to 2002. Overall, the adoption of practices and structures is positively associated with schooling, off-farm earnings, crop diversification, technical assistance, participation in social organizations, frequency of extension visits and access to local markets. More importantly, PAES beneficiaries have increased significantly the area treated with conservation between 2002 and 2005. The results confirm that the project intervention (frequency of extension visits and years with project) is positively associated with adoption. Our findings also indicate that access to agricultural markets and rural infrastructure and institutions is crucial for adoption and diffusion of new technologies. Two probit models are estimated to examine the disadoption of practices and structures using the 2002-2005 data for PAES beneficiaries. These models indicate that off-farm income, education, frequency of extension visits, years with PAES and participation in social organizations are significant contributors to reducing the probability of disadoption of conservation technologies. In turn, disadoption is significantly associated with farm size. Disadopters of practices tend to be younger than adopters and have more diversified and larger farms with more access to input and output markets. In turn, disadopters of structures tend to have larger and more steeply farms, are more involved in social organizations and have less access to input and output markets and local infrastructure.--

Productividad total de los factores en la agricultura chilena: 1961-1996

Resumen : El objetivo de este trabajo es medir el cambio de la productividad en la agricultura chilena durante el período 1961-96. La Productividad Total de los Factores (PTF) fue calculada mediante índices Törnqvist. Los datos utilizados para estimar estos índices incluyen precios y cantidades de 51 cultivos, de la mano de obra, de la tierra, del capital y de factores intermedios. El análisis revela que mientras los productos crecieron un 2,69% anual, el uso de factores de producción bajó un 0,09%; por lo tanto, la PTF creció a una tasa promedio anual del 2,78% entre 1961 y 1996. Se realizó además un análisis para siete períodos correspondientes a diferentes regímenes políticos. La PTF creció a un promedio anual de 1,83% con Alessandri (1961-64), 3,12% bajo el período de Frei Montalva (1965-70), 1,52% durante Allende (1971-73), 6,11% en la primera parte del régimen de Pinochet y -0,28% en el segundo período de Pinochet (1981-89), 3,12% bajo Aylwin (1990-93) y 5,28% bajo Frei Ruiz-Tagle (1994-96). Los resultados sugieren que el programa de reforma agraria implementado en los sesenta no tuvo un efecto negativo en el crecimiento de la PTF. Palabras Claves: Productividad Total de los Factores; Indice Törnqvist; Agricultura; Chile Abstract: The main objective of this paper is to determine the productivity growth in the Chilean Agricultural sector during the 1961-1996 period. Total Factor Productivity (TFP) was calculated using the Törnqvist index, which is a discrete approximation to the Divisia index. The data used to estimate these indexes are prices and quantities for 51 crops, and for four inputs - labor, land, capital and intermediate factors. The rate of annual growth for the period 1961-96 was 2,69% and 0,09%, for products and inputs, respectively. Therefore, the TFP grew at an average annual rate of 2,78%. Given a significant annual variability in TFP growth, an analysis was carried out for seven sub-periods corresponding to different political regimes. TFP grew at an annual average of 1,83% with Alessandri (1961-64), 3,12% under the period of Frei Montalva (1965-70), 1,52% during the Allende years (1971-73), 6,11% during the first part of the Pinochet regime and 0,28% in the second period of Pinochet (1981-89), 3,12% during Aylwin (1990-93) and 5,28% under Frei Ruiz-Tagle (1994-96). The results suggest that the land reform program implemented in the 1960s did not have a negative effect on TFP growth, as has been previously argued by some authors