Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
Impact Of Agricultural Market Reforms On Smallholder Farmers In ... Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
insignificant. The coefficient on tobacco price may be insignificant because there is little variation in the variable. Alternatively, farmers may perceive fertilization of tobacco to be “always” profitable, so fertilizer demand is limited only by cash and credit constraints. On the other hand, the price of maize is positive and significant. This suggests that farmers base their decision to use fertilizer on the fertilizer-maize price ratio, rather than on the price of fertilizer alone. Tobacco, maize and vegetable plots are more likely to receive fertilizer than other plots. Growing tobacco on a plot increases the probability of using fertilizer by 33 percentage points, while a maize or vegetable plot increases this probability by 19 to 20 percentage points compared to other plots. One very interesting result is that tobacco growers are more likely to apply fertilizer on their maize plots than nontobacco growers. This result confirms the descriptive analysis which showed that tobacco growers are three times as likely to fertilize their maize plots than non-tobacco producers. Cash derived from tobacco sales provides farmers with additional income to buy fertilizer. It is also possible that the residual of the fertilizer purchased for tobacco production is used on the farmers’ maize plot. Use of purchased seeds for maize are also positively associated with fertilizer use. This is an expected finding because hybrid maize seed, which is purchased on a yearly basis, responds better to fertilizer than retained seed. Purchased tobacco seed, however, is not significant, because there is little variation in the variable (almost all tobacco seeds are purchased). Membership in a credit club or a cooperative/association seem to increase the likelihood of using fertilizer. Both credit clubs and cooperatives/associations in Malawi increase the access of farmers to group-based credit and to input and output markets. The number of extension visits shows no significant impact. This result may be due to the fact that there was not much variability among the farmers regarding the number of visits. Most farmers received between 16 and 18 extension visits per year. The variable that measures the distance to the fertilizer market is not significant. This finding 243
suggests that farmers in remote areas may not be at a disadvantage regarding access to fertilizer. Table 5.15 also reveals differences in the probability of using fertilizer among ethnic groups. For example, the Ngoni and the Yawo are more likely to use fertilizer than other groups. However, the magnitude of these differences are less than 7 percentage points. The ethnic variations regarding fertilizer use may be due to cultural practices or other sub-regional and agro-ecological factors that are not captured by the other independent variables. Per capita consumption expenditures (a proxy for per capita income) has a positive and significant effect on the probability of fertilizer use. This is expected in Malawi since most fertilizer purchases are cash-based and require a certain amount of cash income. The magnitude of this effect is small however. A ten percent increase in per capita expenditures increases the likelihood of fertilizer use by less than 0.5 percentage points. Non-farm income, however, is not a significant determinant of the choice to use fertilizer. Number of animals, which approximate wealth or the use of manure, are all non-significant, except for number of pigs. Pig farms in Malawi are becoming more common and are an important source of income to farmers. This might raise the ability of farmers to purchase fertilizer. Determinants of the quantity of fertilizer used in Malawi. In Table 5.16, the factors that influence the quantity of fertilizer used per plot are estimated. Most of the variables that are significant determinants of the likelihood of using fertilizer also influence the quantity of fertilizer used. Household size and secondary level education of the household head have a positive impact on the quantity of fertilizer used. Household size is a proxy for amount of family labor available and its positive coefficient (although only significant at the 7 percent level) suggests that family labor complements fertilizer application in crop production. Secondary education of the household head is associated with 76 kg of additional fertilizer use per plot. This may reflect better access to information about crop production. 244
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suggests that farmers in remote areas may not be at a disadvantage regarding access to<br />
fertilizer.<br />
<br />
Table 5.15 also reveals differences in the probability of using fertilizer among ethnic<br />
groups. For example, the Ngoni and the Yawo are more likely to use fertilizer than<br />
other groups. However, the magnitude of these differences are less than 7 percentage<br />
points. The ethnic variations regarding fertilizer use may be due to cultural practices or<br />
other sub-regional and agro-ecological factors that are not captured by the other<br />
independent variables.<br />
<br />
Per capita consumption expenditures (a proxy for per capita income) has a positive and<br />
significant effect on the probability of fertilizer use. This is expected in Malawi since<br />
most fertilizer purchases are cash-based and require a certain amount of cash income.<br />
The magnitude of this effect is small however. A ten percent increase in per capita<br />
expenditures increases the likelihood of fertilizer use by less than 0.5 percentage<br />
points. Non-farm income, however, is not a significant determinant of the choice to<br />
use fertilizer. Number of animals, which approximate wealth or the use of manure, are<br />
all non-significant, except for number of pigs. Pig farms in Malawi are becoming<br />
more common and are an important source of income to farmers. This might raise the<br />
ability of farmers to purchase fertilizer.<br />
Determinants of the quantity of fertilizer used in Malawi. <strong>In</strong> Table 5.16, the factors that<br />
influence the quantity of fertilizer used per plot are estimated. Most of the variables that are<br />
significant determinants of the likelihood of using fertilizer also influence the quantity of<br />
fertilizer used.<br />
<br />
Household size and secondary level education of the household head have a positive<br />
impact on the quantity of fertilizer used. Household size is a proxy for amount of<br />
family labor available and its positive coefficient (although only significant at the 7<br />
percent level) suggests that family labor complements fertilizer application in crop<br />
production. Secondary education of the household head is associated with 76 kg of<br />
additional fertilizer use per plot. This may reflect better access to information about<br />
crop production.<br />
244
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