Interlinked credit and farm intensification: evidence from Kenya

Jayne, Thomas S.; Yamano, Takashi; Nyoro, James K.

doi:10.1111/j.1574-0862.2004.tb00258.x

Cited by 24 publications

(12 citation statements)

References 7 publications

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“…Access to the supply of inputs and services is an essential factor for intensification of smallholder agriculture (Crawford et al, 2003; Jayne et al, 2004; Kelly et al, 2003; Kochar, 1997). In the Ethiopian context, fertilizer and seed supply have essentially been major constraints of smallholders in their effort to increase production.…”

Section: Methodsmentioning

confidence: 99%

Smallholders, institutional services, and commercial transformation in Ethiopia

Gebremedhin¹,

Jaleta²,

Hoekstra³

2009

Agricultural Economics

113

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This article examines the role of institutional services of credit, input supply, and extension in the overall commercial transformation process of smallholder agriculture in Ethiopia. Survey data collected in 2006 from 309 sample households in three districts of Ethiopia are used for the analyses. Tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals. A probit model is used to measure these effects on the adoption of improved seeds. Intensity of use of seeds is analyzed using an ordinary least squares model. Logarithmic Cobb-Douglass functions are estimated to analyze the effect of access to services on crop productivity. Heckman's two-stage estimation is used to examine determinants of household market participation and the extents of participation. Results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation. Our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in Ethiopia. In particular, appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services. Copyright (c) 2009 International Association of Agricultural Economists.

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Section: Methodsmentioning

confidence: 99%

Smallholders, institutional services, and commercial transformation in Ethiopia

Gebremedhin¹,

Jaleta²,

Hoekstra³

2009

Agricultural Economics

113

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“…Because of a lower value, less stable prices and an oligopsony market structure with low bargaining power for farmers, the return to farmers is lower in tropical commodity chains. Yet participation in cooperatives and certification schemes is observed to improve farmers’ income, especially for coffee farmers—as has been discussed extensively in Agricultural Economics in the last years—(Jayne, Yamano, & Nyoro, ; Jena, Chichaibelu, Stellmacher, & Grote, ; Verhofstadt & Maertens, ; Wollni & Zeller, ). Hence, household‐level consumption and investment spillover effects are likely less strong but may depend on the coordination and governance in GVC.…”

Section: Conceptual Discussionmentioning

confidence: 99%

“…Jayne et al. () point out that Kenyan farmers participating in interlinked credit arrangements for tropical commodity production (tea, coffee, and sugarcane) intensify the use of fertilizer for food crops. In addition, they show that the presence of tea and coffee cooperatives in Kenyan villages stimulates the use of fertilizer for food crops, among both cooperative and noncooperative member farmers.…”

Section: Empirical Reviewmentioning

confidence: 99%

Global and local food value chains in Africa: A review

Feyaerts

Broeck

Maertens

2019

Agricultural Economics

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The rapid expansion of agrifood exports from low‐ and middle‐income countries and the contribution of global value chains to rural development are well‐documented in the literature. Also, studies on modernization of domestic food value chains in these countries are emerging. Yet, the linkages between global and local value chains are rarely studied. On the one hand, the development and expansion of global value chains may create competition with local value chains for land, labor, water, soil nutrients, and other resources. On the other hand, positive spillover effects, such as investment, technical or institutional spillovers, may occur and spur the development of local value chains. In this article, we put forward a conceptual discussion on the type of linkages between global and local value chains, and how these depend on crop and value chain characteristics. We review the empirical evidence on these linkages. Our focus is on Africa, where agrifood exports and global value chains evolved rapidly and where challenges remain to upgrade and increase efficiency in local food value chains.

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“…While a large number of individuals in rural areas in developing countries depend on it, small‐scale agriculture has suffered since the 1980s with globalization and agro‐industrialization causing small farms to go out of business (Reardon & Barrett, ). Small farmers' access to land has been shown to decrease over time (Jayne, Yamano, & Nyoro, ). Furthermore, the World Bank () reports that an estimated 75 percent of poor people in developing countries live in rural areas.…”

Section: Introductionmentioning

confidence: 99%

“…The use of these contracts has been documented for various countries and sectors [see for instance Warning and Key () for the groundnut sector in Senegal; Jayne et al. () for cash crops production in Kenya; Simmons, Winters, and Patricks () for various Indonesian sectors; or Key and Runsten () for the Mexican frozen vegetable industry]. Existing theoretical work, for example, Gangopadhyay and Sengupta (), suggests that because of the use of interlinked contracts farmers would not benefit from the intermediaries' lower costs.…”

Section: Introductionmentioning

confidence: 99%

Intermediaries, transport costs and interlinked transactions

Lefèvre

Tharakan

2018

Review Development Economics

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Farmers in developing countries often encounter difficulties selling their products on local markets. Inadequate transport infrastructure in rural areas and large distances between areas of production and consumption mean that farmers find it costly to bring their produce to the market and this very often results in small net margins and poverty among farmers who are geographically isolated.Agriculture in developing countries is characterized by the presence of intermediaries that have a cost advantage over farmers. Because of their market power, these intermediaries are able to impose interlinked contracts and are free to choose the spatial pricing policy they use. In this paper, we develop a model of input-output interlinked contracts between an intermediary and geographically dispersed farmers. We establish when the intermediary uses either uniform or mill pricing policies, as opposed to spatial discriminatory pricing. For each pricing policy, we analyze what the welfare implications are in terms of an increase in farmers' income and a reduction in poverty in rural areas. We also establish how the choice of a spatial pricing policy impacts geographically isolated farmers and how it influences the participation by farmers.

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Interlinked credit and farm intensification: evidence from Kenya

Cited by 24 publications

References 7 publications

Smallholders, institutional services, and commercial transformation in Ethiopia

Smallholders, institutional services, and commercial transformation in Ethiopia

Global and local food value chains in Africa: A review

Intermediaries, transport costs and interlinked transactions

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