Impact Of Agricultural Market Reforms On Smallholder Farmers In ...

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CHAPTER 1 - INTRODUCTION 1.1 Backgrounds and Objectives This report summarizes the findings of a project entitled “Impact of Agricultural Market Reforms on Smallholder Farmers in Benin and Malawi.” The project was funded by the Bundesministerium für Wirtschaflitche Zusammenarbeit und Entwicklung (BMZ) and implemented by the International Food Policy Research Institute (IFPRI) in collaboration with several other research institutions, including the Laboratoire d’Analyse Régionale et d’Expertise Sociale (LARES) in Benin, the Agricultural Policy Research Unit (APRU) of the Bunda College of Agriculture in Malawi, the University of Hohenheim in Germany, and the Center for the Study of African Economies (CSAE) of Oxford University in the United Kingdom. The project activities started in June 1998 and ended in February 2001. The final workshop, to be held in both Benin and Malawi, is scheduled for April 2001. Through surveys of smallholder farmers, input and output traders, and local markets and communities, this project is intended to help understand the impacts of recent reforms in the agricultural sector on traders’ marketing activities, and on the technology adoption, productivity and income levels of smallholder farmers. According to the original proposal, the project's specific objectives are: i) to study the impact of adjustment in input distribution and output delivery systems on technology adoption and production activities of smallholder farmers in Benin and Malawi; and ii) to analyze the farm household level impact of alternative scenarios of reforming and promoting local marketing systems. Both Benin and Malawi undertook extensive reforms of their economy starting in the early to mid 1990s. These reforms have included exchange rate devaluation, elimination of subsidies and price controls on crops and agricultural inputs, reduction of the role of the government in agricultural marketing, and promotion of greater participation by the private sector in agricultural production and trading activities. Key questions have emerged since the reforms were implemented. These include: (1) What has been the impact of the reforms on smallholder farmers’ use of inputs, productivity levels, access to markets, production patterns, and overall income? (2) How have input and output private traders responded to the reforms? (3) Have markets become more competitive and has market performance improved (in terms of lower marketing costs and better services)? (4) What are the major 1
constraints that farmers and traders face in their production and marketing activities? (5) What factors and policy changes are still needed to move the reforms forward and make them more beneficial for small farmers and traders? and (6) What is the appropriate role of the government in a new liberalized market environment? Many researchers have investigated the impact of the reforms and recent policy changes in Benin and Malawi. The most recent research on Malawi includes work by the National Economic Council (1998), Chilowa (1998), Masters et al. (2000), Kambewa and Kachule (1999), Munyemana and von-Oppen (1999), O&M Associates (1999), Kleih, Jumbe and Tchale (1999), Westlake (1995), Peters (1996), and N’gon’gola (1996). For Benin, the reforms and their impact on agriculture have been the topic of research by Lutz et al (1995), Soulé (1996), Igue and Soulé (1992), Galtier and Tassou (1998), Senahoun et al (2000), Ahoyo Adjovia and Heidhues (1997), Senahoun et al (1999), UNDP (1998), and Republic of Benin (1997) (Chapter 2 reviews these studies). Using primary survery data, this research project represents the most comprehensive attempt to understand the impact of the reforms on small farmers and traders in both Benin and Malawi. 1.2 Project Research Activities The project survey activities were divided into several components that are enumerated below. a) A smallholder farmer survey based on a nationally representative sample of about 800-900 small farm households. This survey was conducted during the period August – November 1998 in both countries. b) A survey of the communities that included the villages where the small farmers selected for the Small Farmers Survey lived. This included 40 communities in Malawi and 90 in Benin. The community survey was conducted from November 1999 to February 2000. c) An input and output trader survey comprising about 650-750 private traders and implemented during the period May to December 1999 in Benin and August 1999 to February 2000 in Malawi. d) A survey of the main agricultural markets in Benin and Malawi (41 in Malawi and 21 in Benin) implemented during the same period as the traders’ survey. e) In Benin, it was determined that a survey of village-level farmer organization (groupements 2
Page 1 and 2: IMPACT OF AGRICULTURAL MARKET REFOR
Page 4 and 5: TABLE OF CONTENTS CHAPTER 1 - INTRO
Page 6 and 7: 5.1.10 Expenditure patterns .......
Page 10 and 11: villageois, (GV)) was needed as the
Page 12 and 13: CHAPTER 2: POLICY BACKGROUND FOR BE
Page 14 and 15: 2.3 Evolution of Economic Policy 2.
Page 16 and 17: Under pressure from the World Bank
Page 18 and 19: anking system has been restored to
Page 20 and 21: Fertilizer can be imported outside
Page 22 and 23: particularly urban wage-earners. On
Page 24 and 25: Soulé (1996) describes the evoluti
Page 26 and 27: led to a more sustainable agricultu
Page 28: Table 2.4 - Gross farm revenue from
Page 31 and 32: Malawi’s economy is heavily depen
Page 33 and 34: the reduction of its operations in
Page 35 and 36: crops is also difficult because tob
Page 37 and 38: Table 3.1 CROP 1982/83 1983/84 1984
Page 40 and 41: CHAPTER 4: RESULTS OF THE BÉNIN SM
Page 42 and 43: where W v is the weight for a house
Page 44 and 45: heads. This suggests that some of t
Page 46 and 47: And school attendance is much highe
Page 48 and 49: Crop production is the main activit
Page 50 and 51: (33 percent). Livestock income is m
Page 52 and 53: Somewhat surprisingly, the relation
Page 54 and 55: It is no more common among richer h
Page 56 and 57: production, and women actually spen
Page 58 and 59:
Seed use by crop Although only 18 p
Page 60 and 61:
Looking at the results by departmen
Page 62 and 63:
Ouémé presents an unusual case: j
Page 64 and 65:
Market prices have significant effe
Page 66 and 67:
policies of SONAPRA to discourage
Page 68 and 69:
crops are responsible for this incr
Page 70 and 71:
Respondents were asked whether the
Page 72 and 73:
Female-headed households, not surpr
Page 74 and 75:
households are not considered credi
Page 76 and 77:
In almost every category of agricul
Page 78 and 79:
This discussion implies that farms
Page 80 and 81:
eturns per hectare and labor-intens
Page 82 and 83:
farm household and tends to be smal
Page 84 and 85:
Surprisingly, the value of sales as
Page 86 and 87:
Finally, proximity to an all-season
Page 88 and 89:
Changes in crop marketing In this s
Page 90 and 91:
Poor households are more likely to
Page 92 and 93:
it is clear that virtually all grow
Page 94 and 95:
production to total expenditure is
Page 96 and 97:
a significant number of household (
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non-food spending. These are follow
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Larger farms are associated with hi
Page 102 and 103:
This would not be surprising in lig
Page 104 and 105:
Female-headed households appear to
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poorest expenditure category to jus
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headed household were more likely t
Page 110 and 111:
Households in every expenditure cat
Page 112 and 113:
An important result of this analysi
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oad network, although those citing
Page 116 and 117:
questions posed by the IFPRI-LARES
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With regard to cotton marketing, al
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Village leaders were asked to ident
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Marketing patterns Village leaders
Page 124 and 125:
4.3: Results of the Bénin Survey o
Page 126 and 127:
4.3.2 Survey methods At the time of
Page 128 and 129:
officers have CM2 certificates. Thi
Page 130 and 131:
Suppliers The GV representatives we
Page 132 and 133:
Cotton area per GV ranges from 145
Page 134 and 135:
The largest cost items are schools
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members and 10 percent of the membe
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Table 4.1.1-Description of sample o
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Table 4.1.7-Age, education, and lit
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Table 4.1.13-Ethnic background of h
Page 144 and 145:
Table 4.1.19-Importance of each sou
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Table 4.1.25-Number of plots and ar
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Table 4.1.31-Land tenure by expendi
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Table 4.1.37-Change in labor alloca
Page 152 and 153:
Table 4.1.42-Seed use by sex of hea
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Table 4.1.47-Perceived change in av
Page 156 and 157:
Table 4.1.54-Share of producers of
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Table 4.1.59-Fertilizer use by farm
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Table 4.1.64-Characteristics of fer
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Table 4.1.69-Change in fertilizer a
Page 164 and 165:
Table 4.1.75-Allocation of labor by
Page 166 and 167:
Table 4.1.82-Allocation of labor by
Page 168 and 169:
Table 4.1.89-Change in credit avail
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Table 4.1.94-Percent of households
Page 172 and 173:
Page 174 and 175:
Table 4.1.102-Area allocation by cr
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Table 4.1.106-Area allocation by cr
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Table 4.1.110-Marketed share of out
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Table 4.1.114-Marketed share of out
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Table 4.1.117-Regression for market
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Table 4.1.120-Change in the type of
Page 186 and 187:
Table 4.1.128-Perceived change in r
Page 188 and 189:
Table 4.1.135-Main reason for stori
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Table 4.1.140-Summary of food expen
Page 192 and 193:
Page 194 and 195:
Table 4.1.144-Food consumption by e
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Table 4.1.149-Results of regression
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Table 4.1.152-Value of household as
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Table 4.1.156-Value of household as
Page 202 and 203:
Table 4.1.160-Housing characteristi
Page 204 and 205:
Table 4.1.162-Housing characteristi
Page 206 and 207:
Table 4.1.165-Main source of water
Page 208 and 209:
Table 4.1.170-Source of information
Page 210 and 211:
Table 4.1.176-Source of information
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Table 4.1.181-Regression for percei
Page 214 and 215:
Table 4.2.5-Change in number of veh
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Table 4.2.12-Availability and sourc
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Table 4.2.21-Number of GFs per vill
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Table 4.2.30-Percentage of villages
Page 222 and 223:
Table 4.2.34-Distribution of villag
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Table 4.3.1-Distribution of GVs by
Page 226 and 227:
Table 4.3.9-Number of each type of
Page 228 and 229:
Table 4.3.12-Percentage of secretar
Page 230 and 231:
Table 4.3.19-Distribution of GVs by
Page 232 and 233:
Table 4.3.24-Percentage of inputs s
Page 234 and 235:
Table 4.3.32-Average value of curre
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Table 4.3.40-Percentage of GVs in w
Page 238 and 239:
CHAPTER 5 - RESULTS FROM THE MALAWI
Page 240 and 241:
The weights are used to calculate a
Page 242 and 243:
On average, around 20 percent of th
Page 244 and 245:
agricultural work. Other less commo
Page 246 and 247:
5.1.4 Time allocation In Malawi, as
Page 248 and 249:
attributed it to the fact that fert
Page 250 and 251:
insignificant. The coefficient on t
Page 252 and 253:
As in the results from the previous
Page 254 and 255:
most important sources of input on
Page 256 and 257:
applied for credit compared to 20 p
Page 258 and 259:
less than 1 mt per ha which are fai
Page 260 and 261:
5.1.9 Agricultural marketing Market
Page 262 and 263:
Households that belong to a club al
Page 264 and 265:
most important contractors are the
Page 266 and 267:
indicates that the extent of povert
Page 268 and 269:
wheat, and fruits and nuts, a highe
Page 270 and 271:
Surprisingly, the education of the
Page 272 and 273:
Housing characteristics The overwhe
Page 274 and 275:
It was also important to find out w
Page 276 and 277:
Surprisingly, tobacco growers are m
Page 278 and 279:
Over three-quarter of the EPAs repo
Page 280 and 281:
The changes in the number and types
Page 282 and 283:
5.2.11 Storage Facilities On averag
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Table 5.2 - Household characteristi
Page 286 and 287:
Table 5.7 - Percentage of household
Page 288 and 289:
Table 5.12 - Farm labor use and all
Page 290 and 291:
Table 5.15 - Determinants of the de
Page 292 and 293:
Table 5.17 - Sources of fertilizer
Page 294 and 295:
Table 5.22 - Access and use of cred
Page 296 and 297:
Table 5.25 - Percent of households
Page 298 and 299:
Page 300 and 301:
Table 5.34 - Crop disposal by type
Page 302 and 303:
Table 5.38 - Determinants of Market
Page 304 and 305:
Table 5.42 - Summary of expenditure
Page 306 and 307:
Table 5.45 - Food consumption by so
Page 308 and 309:
Page 310 and 311:
Page 312 and 313:
Table 5.51 - Food consumption by ex
Page 314 and 315:
Table 5.56 - Determinants of per ca
Page 316 and 317:
Table 5.59 Percent of households ow
Page 318 and 319:
Table 5.62 - Characteristics of the
Page 320 and 321:
Table 5.68 - Determinants of percei
Page 322 and 323:
Table 5.71 - Average yields per cro
Page 324 and 325:
Table 5.77 - Changes in the availab
Page 326 and 327:
Figure 5.1 Distribution of househol
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Figure 5.7 - Percentage of Househol
Page 330 and 331:
CHAPTER 6 - SUMMARY, CONCLUSIONS AN
Page 332 and 333:
Fertilizer Half of the far
Page 334 and 335:
Regression analysis indicates that
Page 336 and 337:
Among those seeing improvement, the
Page 338 and 339:
Agricultural markets Three quart
Page 340 and 341:
The economic reforms have boosted p
Page 342 and 343:
department. The farms with very lit
Page 344 and 345:
Strengthen the extension service by
Page 346 and 347:
The most time-consuming agricultura
Page 348 and 349:
Most common means of transport to t
Page 350 and 351:
Small farmers in Malawi are mainly
Page 352 and 353:
households have less assets and les
Page 354 and 355:
Place more serious efforts to impro
Page 356 and 357:
REFERENCES Ahoyo Adjovi, N.R. and F
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