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Farming & Rural Systems Economics

The agricultural sector in developing countries like Bangladesh is undergoing a far-reaching structural change, which is driven by over-population, technological change, farming-system change, industrial and service sector development. Generally, Bangladesh agriculture is characterized by the scarcity of land and abundant labor with small-scale farms and low mechanization level. Agricultural land is gradually decreasing and the numbers of small farms are increasing at the expense of a reduction of the number of large farm. Therefore, generated employment opportunities in these small-sized agricultural farms are not sufficient to absorb the expanding labor force in the rural areas. In this situation, a new strategy emerges in rural areas, whereby farmers are engaged in part-time farming. This book provides an overview of structural change in agricultural sector and responsible factors for this change. The impact of part-time farming on farm productivity is also analyzed in this book. The results of these analyses would help to draw up better policies for short-term and long-term agricultural and rural development in Bangladesh.

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Smallholder dominated rice farming and related activities play a vital role in Myanmar’s economy in terms of cultivated land areas, income and employment opportunities, and production and export values. In 2008, private rice specialization companies (RSCs) launched rice contract farming system in major rice growing areas of Myanmar under encouragement of government in order to reduce barriers to develop Myanmar rice sector. Rice contract farming system not only link smallholders to world export markets along the stable supply chain but also provide essential inputs, finance and technical assistance to smallholders. Although rice contract farming system received attention by researchers, there is still limitation in literatures. Therefore, the difference performance of millers, wholesalers, local traders, retailers and exporters under contract and conventional value chains are also compared by using Quantitative Value Chain analysis. This book applied Full Information Maximum Likelihood Endogenous Switching Regression Model to identify the most important socioeconomic factors which influence smallholders to join the rice contract farming system and empirical impacts of contract participation on smallholder livelihoods. The paddy price, fertilizer cost, production shock experiences, extension access, participation in local farmer organizations, age and education level of household head as well as regional difference show most influential to adopt contract farming system. This book finds that the impacts of contract participation vary depending on the contract specification between RSCs and smallholders. The results show that shorter chain of RSCs via contract system shows superior in production, processing and marketing stages of the value chain as compared to conventional one. Finally, this book expresses some policy recommendations to enlarge the rice contract farming system and to construct better managements to develop rice sector in Myanmar.  

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Village Computable General Equilibrium modelling Approach

Poverty is the biggest challenge in Ethiopia. Low income, famine and drought and rain fed agriculture makes Ethiopia one of the poorest countries in the world. To address this problem, the country has employed various development efforts. Productive Safety net program is one of the endeavors to reduce chronic poverty in rural areas of Ethiopia. The book covers the direct and indirect impacts of the program on households’ welfare, village economic linkage and consumption behavior. It includes the application of both Village and National CGE models together with econometrics method. Moreover, SAM multiplier has been employed to understand interactivity linkages in the village economy. The study was conducted using 150 households, among which 75 are beneficiary of the productive safety net program and the remaining are non-beneficiary households. Hence, the book gives empirical evidence on the effects of the program on poverty, income inequality, consumption behavior of households and inters- production activity linkages in the village of Harwobello, in Amahara regional state. Based on the empirical evidence, the book suggests the way productive safety net further enables households to improve welfare and create strong economic linkage in the rural villages in Ethiopia.

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Case Study In Ha Tay, Vietnam

Economic reform has brought significant achievements to Vietnam: the annual GDP growth increased at an average of 7% between 1986 and 2008 and 5.5% between 2008 and 2015. However, Vietnam is still an underdeveloped country characterized by large productivity gaps between agriculture and other sectors. The low productivity in agriculture has led to a decrease in its contribution to the national economy. This book aims to investigate the structural change in agriculture in term of land use, employment and agricultural production and also evaluate the impact of these changes on rural household income. The study found that structural change in Vietnam’s agriculture no longer follows normal globalization trends in terms of land accumulation. The number of small farms is increasing as opposed to decreasing, which has been the case in most developed countries. The rationale behind this is that the diversification of economic activities helps HHs earn more income to satisfy their basic needs. Therefore, the rural labor can cultivate with a very small size as a part time farming job. For these smallest farms, agricultural activity is self-sufficiency, and diversification with non-farm activities plays a significant role in gaining household income.  However, diversification into nonfarm activities of the rural laborers is the main reason making the progress of economic structural change in agriculture is slowing down. Finally, the study provides several policy implications to improve the household income and also to promote the process of economic structural change in the sector.

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An Institutional and Economic Analysis of Forest Devolution in Upland Central Vietnam

Forest devolution in Vietnam has been started after economic reform 1986 which aimed to improve livelihood of local people and the forest cover in the country. The forest cover increased to about 40% in 2013, and about 30% forest and forestland were allocated to individual households and local communities with specific rights to forest and forestland use. However, the role of forest in poverty reduction and sustainable development is still in question. The poverty rate of the mountainous regions is higher than other part of Vietnam and many environmental problems are challenging. 

A household survey was conducted early 2012 with 313 household about how they use the forestland and forest resources (both legal and illegal rights) in specific communities in the upland regions of Thua Thien Hue province in Central Vietnam. The results of the analysis show that changes in political regimes have changed local institutions in forest and forestland management. Forest use has shifted from self-sufficiency to commercial purpose, from diversification of crops to monoculture. Cost benefit analysis (CBA) of forestland use addresses that net present value of forest plantation is much lower than for industrial trees (rubber) or annual crop (cassava). Scenarios are built to consider not only possibilities for benefit compensation of foresters, but also the profit of local people with fluctuation of forest and agricultural prices. Analysis of factors affecting household’s decisions in allocating forestland for different purposes and forest exploitation demonstrates that the changes in using forest resources and forestland of local people are affected not only by the household and ethnic characteristics, but also by forest devolution process, particularly of extension and credit services. Based on the analysis, recommendations on strengthening institutions of communities for better forest resources use and management and improving livelihoods through internalizing of externalities, local job generation, technical supports, credit access and market information as well as diversification of agricultural and forestry products are given.

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The poor are able to improve their livelihood if they have access to financial resources such as credit. However, the poor in rural Vietnam see the capital shortage as a major constraint to investment. This study uses the data of 1338 rural households in the Northern Mountainous Region of Vietnam to examine the extent to which rural credit targets the poor, as well as credit access constraints and impacts. This study uses Principal Component Analysis (PCA) to measure the relative poverty index for each individual household to evaluate the poverty outreach of credit. Based on the poverty index, the share of credit-accessed households is compared with that of credit non-accessed ones to examine the poverty targeting of credit. Moreover, this study relies on the Bayesian Model Average applied to the Heckman Selection Model to examine factors influencing credit access. Advantages of those approaches are that they avoid the problem of bias selection and model uncertainty. The income impact of credit on accessed households was estimated by calculating the average treatment effect on treated (ATT) using different matching algorithms. In addition, to increase the reliability of estimation measures, the distribution for the impact estimator is further constructed by applying the bootstrapping approach to the Propensity Score Matching (PSM).

Results showed that subsidised credit successfully targeted the poor and ethnic minority households. These results indicate that governmental subsidies are necessary to reach the poor and low income households, who need capital but are normally bypassed by commercial banks. Provision of credit to rural households has increased their total income, per capita income and nonfarm income. It is apparent from this study that overall rural credit has contributed to the remarkable achievement in poverty reduction of Vietnam over the last two decades. However, various types of credit affected recipients differently. Strong evidence of positive impact was found when households received commercial credit from the Agribank. In addition, informal credit is an important component in the credit system and plays a role in improving household income. However, the income impact of subsidised credit was limited in its magnitude. Although the subsidised credit is insufficient to significantly improve the income of poor households, it prevents these households from becoming even poorer.

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A CGE Modelling Approach

The effect of trade liberalization on poverty income inequality and the overall economy is a timely issue that requires meticulous assessment in Ethiopia where there are production and consumption heterogeneities. The book, relying on the 2004/05 EHCES data, examines the economic behavior of households using Quadratic Almost Ideal Demand(QUAIDS) and further reclassifies the household account of the 2005 Social Accounting Matric (SAM) of Ethiopia based on their consumption pattern. The book incorporates possible way of new SAM balancing techniques which could be used in a situation where both balanced and unbalanced accounts co-existed in a single SAM. Using the STAGE Computational General Equilibrium (CGE) models, the book examines the possible impact of trade liberalization in Ethiopia on poverty, the production of priority industries, welfare and income inequality both in short and long run. The book also examines the inter-sectoral linkages among activities and enables to sort out both key and weakly linked sectors of the economy using a SAM multiplier analysis. Moreover, the book proposes a new method of dealing with intra group distribution of income using linear combination and arithmetic progression techniques such that the likely impact of trade liberalization on poverty and income inequity is examined accordingly. The impact of consumption switching during trade liberalization on poverty has been explicated. Based on the aforementioned empirical evidences, the book suggests the way that enable Ethiopia accrues benefits from trade liberalization and further indicates possibilities of reaping benefits from resource reallocation within the industrial sectors in the country.

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The Case of Central and Eastern European Countries and Nepal

After the formation of World Trade Organization (WTO), it was widely expected that the multilateral trading negotiations under the WTO would have provided countries less incentives to engage in the regional trading agreements (RTAs). However, the number of RTAs ratified by the WTO has been growing over the years. The slow progress of multilateral trade negotiations under the Doha development round may have been one of the reasons for the mushrooming of the RTAs. Agriculture, particularly, has been the most sensitive topics of the trade negotiations. Therefore, this study focuses on two regional trade agreements: the European Union enlargement that occurred in 2004 and the South Asian Free Trade Agreement(SAFTA) that occurred in 2004 and their effects on agricultural trade from the perspectives of Central and Eastern European Countries (CEECs) and Nepal, respectively. The findings from the gravity model analysis of agricul tural trade indicate that there was significant and positive effect of EU enlargement on CEECs agricultural exports. Similarly, the SAFTA has had significant and positive impact on Nepalese agricultural exports. Furthermore, Relative Comparative Advantage (RCA) analysis suggest that, Nepal maintained comparative advantage in major agricultural exports after joining the SAFTA.

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Determinants and Impacts on Farm Profitability

Land use is changing all over the world with the passing of time. Obviously there are some causes of changing land use patterns. In the context of Bangladesh, a highly populated country in the world, using of cropland as fish farming is expanding over time because of market demand, and the favorable growth rate of the fish price; in contrary, uncertainty of rice production and low market price of rice also enhances the process. Notwithstanding, most farmers try to secure rice supply for their own consumption. This book provides an overview of how various factors interact in particular contexts to identify the causes of land use change, and how the farmer allocates physical resources optimally to maximize farm profit under different economic limitations. A good understanding of influencing factors and thee optimal use of given physical resources would help the policy makers to draw up new public land use policies.

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The Case of Bangladesh

Internal migration is considered as an important livelihood strategy for poor people in rural regions of Bangladesh. Although international migration received attention by researchers, internal migration research is still very limited. This study focuses on exploring the farm household level determinants of rural-urban migration and its impact on farm production and food security status of the households. Primary data collected from the 316 farm households in Bangladesh are used for empirical analysis of the study. This book reports on the empirical findings of the reasons for migration from the rural farm households in Bangladesh and the impacts of this kind of migration on farm production and food security of the left behind members of the households. This book also presents an explanation of how migration affecting labour and non-labour input use in farming and thereby on farm production. The results, based on econometric estimation, show that young and active individuals are mostly migrating in to the cities. Farm production is negatively influenced by the migration of one or more members from the farm family. This book also reports that farm household’s food security status has been improved due to migration of their family member based on the empirical findings. Finally this book come up with some policy recommendations for better management of internal migration in order to reduce the negative effects of migration on agriculture as well as on the economy and to optimize the benefits from migration.

 

 

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This book considers farmers as the center of the relation between agriculture and rural development in the Mekong Delta, Vietnam. Using micro data sources over the years from the existing surveys across the country (Vietnam Household Living Standards Survey and Vietnam Access to Resources Household Survey), this study tries to sketch an overall picture of agricultural land management in the Mekong Delta. The four components of this study are the changes in the agricultural institution, the transforming in the socio-economic structure of the region, the changes in technology and the shifting of the internal elements of the agricultural sector.

Research results indicate that, in the Mekong Delta, agriculture has contributed significantly to economic growth over the years thanks to the perspective policies. However, there are some problems that arise in the sustainable development of agriculture in the region, mainly related to the incentive of agricultural production. Size small and fragmented farms negatively affect the efficiency of rice production in particular and agriculture in general. To improve production efficiency, farmers tend to accumulate the agricultural land on a large scale – even larger than the quotas of the State – to take the advantage of economy of scale. This study argues that such limitations as allocated quotas and land use duration should be expanded or even deregulated in the Mekong Delta. In addition, the government should promote the development of the free markets of land use and labor, promote the transparency of the planning and land management policies of the region. They would positively contribute to reducing landlessness, but also promote agricultural production in large scale following the development of modern agriculture in many countries around the world.

 

 

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Smallholder Farmers´ Decisions, Impact on Livelihood and Environmental Services in Azgo Watershed, Ethiopia

Rainwater harvesting (RWH) has been practiced and promoted to address the temporal and spatial variability of rainfall, thereby enhance agriculture production in rainfed systems. The practices could also address the problem of land degradation. However, there is limited practice of approaching RWH from the perspective of managing both the water and land resources. Using advanced econometrics methodologies and based on a recently collected data from 354 farm households and 974 plots in Azgo watershed, Ethiopia, the book reports the analyses of various combination rainwater harvesting practices (RWHP), their use decision and impact on household livelihood and environmental services. The result reveals that there is a significant correlation between the RWH practices and use of the practices is interdependent, depicting either complementarities or substitutabilities between them. The analysis focused on the integrated use of in-situ and ex-situ RWH practices. The book further presents the factors that influence the decision to use integrated rainwater harvesting practices (IRWHP) and their impact on sustainable rural livelihood. Results showed that the use of IRWHP has significant positive impact on improving farm income and reducing the probability of being multidimensional poor. The results also reveal that the impact IRWM practices is changing people’s motivation and behaviors, making them positively disposed towards watershed management. This study suggests that policies that enhance the promotion of IRWHP would be central for the sustainable intensification of smallholder agriculture that simultaneously alleviate poverty, foster food security, and enhance resource sustainability.

 

 

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A Value Chain and Economic Analysis of the Hot Pepper Sub-Sector in Uganda

Although high-value horticultural exports have are known to provide opportunity for linking rural smallholder farmers to global markets, the factors influencing farming success and decision making by the farmers in the hot pepper sub-sector in Uganda from which one could better understand the value chain costs, margins and institutional arrangements that enable drawing of meaningful recommendations for policy and sub-sector development are poorly understood. Drawing from field survey data of hot pepper value chain actors including hot pepper farmers, traders and exporters in Uganda, this book provides in-depth value chain and economic analyses of Uganda’s export hot pepper sub-sector and consequently presents discussions, strategic interventions and policy recommendations. This book recommends the establishment of a hot pepper commodity chain development initiative to guide and support public and private sector investments in rural production and marketing infrastructure, innovative input and extension delivery systems, development of product and market development, production and marketing agreement enforcement and information exchange thereby enhancing Uganda’s hot pepper export competitiveness.

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In developing countries like Nepal where the economy mainly depends on agri- culture, the assessments of climate change impacts on farming systems are essen- tial. This book provides an overview of the climate change impacts on farming, farmers’ perceptions and responses to climate change, location-specific effects of climate variables on crop yield, and impact of climate risk in decision-making of the farmers. A multiple regression (time-series) model is applied to analyze the empirical relationships between crop yield and climate variables (rainfall and temperature). A mathematical programming model is developed with the objective function of maximizing utility (total gross margin minus measures of its vari- ability due to climate risk). The model accounts climate risk (crop yield risk) and predicts suitable cropping patterns and crop production levels for various scenarios. The two cases as without risk and with accounting climate risk are compared to evaluate the impacts of climate change on farm income and farmers’ production decisions. Five climate change scenarios are assumed, and the impacts of climate risk on farmers’ production decisions in these scenarios are assessed. As a general view, farmers are aware of climate change and its impacts on farming systems. Climate variables influence crop yield; however, the effects and their magnitudes vary across crop types, growing seasons and locations. The spatial variations of climate patterns play a key role in predicting the effects of climate variables on crop yield. Climate change plays an important role in the decision- making of the farmers, and the climate change adaptation strategies need to be considered in production decisions.

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Evidence From Survey and Framed Field Experiment. The Case of Community Forest Users in Rural Ethiopia

Economic experiments have established that the behaviour of individuals in commons dilemma deviates from myopic prediction. Individuals act less selfishly than predicted by myopic equilibrium. However, the influence of the commons scarcity on the behaviour of the individuals in commons dilemma has not been adequately addressed in the literature. Further, experimental evidence regarding the role of resource scarcity on the effectiveness of institutions geared towards solving the commons dilemma is scant. Hence, this book provides experimental evidence on the effect on commons scarcity on the cooperative behaviour of commons users. The book also explores the effect of institutions (endogenous and exogenous) and leadership on the cooperative behaviour of commons users. The experiments were conducted using 130 community members randomly selected from Chillimo-Gaji community forest users in Oromia regional state, Ethiopia. The book also gives empirical evidence on the determinants of rural households’ dependence on forest commons  based on survey data.

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Scenario Analysis and Forecasting

Great changes have taken place since China’s reforms in 1978. Foreign trade in exports and imports has increased greatly. In the past three decades, China has grown from having a negligible role in the world trade to being the world’s largest export country and the second largest import country in merchandise export and import respectively, in 2012. With industrialization, urbanization and growth in population and income level, China’s grain demand increased rigidly. However, the limitations on grains production like shrinking arable land, shortage of water resources and climate change are becoming more and more serious. Grain security in China has become a top priority for national development. China imports more and more grains and agricultural trade deficit is becoming bigger and bigger. China’s agricultural trade faces more challenges. In order to promote domestic agricultural production and raise the income of farmers, Chinese government began having subsidies for agricultural production instead of taxing agriculture. Given the substantial reforms undertaken in China’s agricultural trade policies and reductions in domestic taxes on China’s agriculture, this study focuses on competitiveness of China’s agricultural trade and impacts of Chinese agricultural policy transition on domestic production and foreign trade. In this study a China’s agricultural policy and trade model including supply, demand, foreign trade and market clearing system is simulated and scenario analyses under different policy assumptions including changes of direct payments, subsidy on inputs, foreign trade policy and income growth are discussed. Based on this model, projections under several assumptions are conducted. The main findings include more direct payment on grains can stimulate domestic grain production; subsidy on machinery expenditures stimulates more grain production than on fertilizer and reduces the imports of grains; with CNY exchange rate appreciation, domestic production is reduced with lower relative import prices and China’s grain self-sufficiency declines. Based on the findings, the author recommends a set of policies oriented towards improving China’s agricultural trade balance and grain self-sufficiency. 

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A case study of maize farming in Benin

The issue of sustainable adaptation to climate change is viewed as a window towards a long-term future for agriculture in developing countries. Yet, there is no study with the focus on possible relationships between climate change adaptation strategies, as developed by farmers, and agricultural sustainability. Against this backdrop, the main objective of the study is to analyse correlations between observed adaptation strategies developed by farmers as responses to climate change and farm sustainability level. Accordingly, this book provides an overview of agricultural challenges that West African countries are expected to be faced with under future climate conditions, the smallholder farmers’ perception of past climate development, and the strategies used by them as means of climate change adaptation. After a comprehensive analysis of the economics of maize production under several climate change adaptation strategies, a novel Participatory Indicator-Based (PIB) tool to agricultural sustainability assessment at the farm level is presented. By using this tool, the sustainability assessment is partly designed and carried out through group discussions with farmers and agricultural extension officers, and primary data collection through household surveys. The application of PIB tool reveals that maize farming in the study area presents weaknesses in the economic and social spheres but positively scores in the environmental area. Furthermore, a modelling of the sustainability of maize farming through a Tri-variate Tobit model highlights on-farm diversification and land use changes strategies as sustainable adaptations whereas the other adaptations (e.g. off-farm diversification, migration, and prayers) appear to be non-sustainable options.

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Small-scale processing and marketing activities of the agricultural produces are important themes in the development discourse of Tanzania and other countries in the world. In light of this situation, this book analyses the economic performance of the Tanzanian fruit and vegetable sector, covering sampled Micro and Small-Scale Enterprises (MSEs): The empirical research is based on a field study carried out in the Dar-es Salaam, Morogoro, Coast and Tanga regions of Tanzania. The descriptive and econometric analyses clearly show that factors which associated with collective working structure improve growth of studied fruit and vegetable processing enterprises. The results indicate that MSE’ operational capital, the number of owners, the number of staff, profit levels and annual product production levels, links to support organizations, plus access to basic market information and business improvement services, combined with the distance to input sources and marketplaces, as well as age of the manager-owners were found to be factors associated with the growth performance of the studied enterprises. 

It is also shown that multi-ownership governance for studied MSEs is an economically profitable venture in terms of returns generated from investments under the prevailing infrastructural and business conditions in Tanzania. Further, this study assessed the willingness of surveyed MSEs’ manager-owners to change a way of doing business from current individual mode of operation to cooperative working framework. Because the studied MSEs are currently not performing so well, the key proposal of this study is that the managers should cooperate in the fruit and vegetable sector and form small-scale food cooperatives.

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A Price Policy Analysis

Farm households in developing countries constitute a majority of the poor; improving their welfare status requires interventions targeted at their livelihood strategies. Their livelihood is associated with inadequacies stemming from structural and technical inefficiencies. To liberate them from the inadequacies requires an understanding of the dynamics of production as well as the resultant consumption behaviour under changing market conditions. This book investigated resource use efficiency and allocation in four major crop enterprises of farm households in North Central Nigeria. Furthermore, the consumption pattern of the households with respect to price changes was also investigated. The study utilized the Stochastic Frontier Production Function and the Linear Approximate Almost Ideal Demand System (LA/AIDS) for the efficiency and demand analyses respectively; Subsequently, a mathematical programming technique implemented in General Algebraic Modelling System (GAMS) was adopted for modelling the farm households’ responses to the stimuli of changing input and output price policy. The key response decision variables include the reallocation of resources within and between enterprises and the resultant output changes in response to the stimuli applied and subsequently changes in market surplus availability. The book highlights the inadequacy of “unilateral policy approach” with evidence of contrasting impact on the categories of farm holders investigated.

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Toward Sustainable Renewable Energy

Bangladesh is a developing country which consuming quite less amount of energy besides producing more social and environmental difficulties due to use of fossil and biomass fuels. Biogas, renewable energy could be an alternative usable source instead of fossil and regular use of biomass. Biogas serves manifold direct and indirect benefits to the society. This book empirically identifies the most important socio-economic factors that influence to adopt the domestic biogas plant. The level of education, income, number of cattle and sex (female) are most influential to adopt biogas plant. Data of biogas users and potential biogas users were collected from Bangladesh. Application of slurry, byproduct of biogas technology plays a vital role to increase agricultural production as well as improve the soil fertility. This book proves that slurry oriented biogas households are more efficient to Boro rice production compare to biogas non-users. Finally, the book finds that biogas is a profitable business considering the financial and economic assumption. All these assumptions are prescribed to provide incentives for extending the biogas business. Using the find of these empirical analyses, some policy recommendations are presented in order to enlarge the biogas technology in rural areas of Bangladesh.

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An Applied Modelling Approach in North Kordofan, Central-west Sudan

Microcredit is often considered as efficient tool to alleviating poverty in developing countries. In Sudan, the government has been pursuing a microcredit policy that seeks to provide essential business that improves the livelihood of poor people, and consequently eradicate their poverty. Investing in agricultural activities through microcredit services will continue to be seen as a potential option for improving the income and food security of rural households in North Kordofan State of Sudan. This book investigates empirically the impact of microcredit on poverty alleviation in rural dryland of Sudan, taking North Kordofan as case in point. The study focuses on three localities with two farm household categories, which were selected through a multi-stage stratified random sampling technique. A combination of different econometric tools and dynamic non-separable farm household model approach were applied to analyze microcredit policy scenarios. The book presents empirical analysis of the factors motivating credit constrained conditions and the impact of credit provided on farm profitability.

The book also quantitatively investigated the interaction effect between loan utilization and repayment behaviour of farm households. The results of the study have revealed that households who have access to credit were better-off in terms of moveable assets and investment activities compared to those who do not. Although credit users reported a rapid increase in welfare levels and market purchases over the three-year period, their level of market integration was less than might have been expected. The book finally suggested some important policy recommendations to enhance development of microcredit sector in the area of financial constraints, marketing and investments.

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Dynamics, Determinants and Policy Implications

Food security and poverty reduction policies essentially require a meticulous assessment of the nature and dynamics of deprivation. In rural Ethiopia, poverty is deep and pervasive. This study examines the multi-faceted and inter-temporal poverty incidences in 15 rural communities representing the ‘Enset’ growing areas, oxen plough and oxen-hoe mixed farming systems in rural Ethiopia using four panel rounds of the Ethiopian Rural Household Survey (ERHS). It has covered multiple dimensions of human wellbeing including but not limited to poverty incidence, vulnerability to poverty, income inequality and food consumption patterns. Hence, this book bestows a comprehensive investigation of the dynamics and determinants of poverty from different perspectives employing wide-ranging methods of analysis.

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An Analysis of the Impacts of Urbanization, Economic Reforms and Rising Food Prices in Kenya

With food insecurity becoming a perpetual challenge in Kenya, this study on food consumption patterns, welfare, and food security sought to provide robust and detailed evidence on the patterns of food consumption and how they relate to household income, prices, household demographic characteristics, urbanization, and economic policy reforms. The study evaluates the patterns of food consumption across urban and rural areas. Impacts of urbanization and economic liberalization on temporal patterns of food consumption are estimated from time series food consumption and price data. Committing to a robust economic empirical approach, the study explores the linkage between empirical food demand analysis and welfare estimation techniques to bring out the impacts of the 2008/09 food price crisis on household welfare. Further, the impacts of price changes on welfare are simulated and empirically linked to bring out food insecurity prevalence, gap, and severity borrowing approaches from poverty analysis techniques. The study also explores the ‘would be’ effects of increased vertical market integration on food insecurity, and welfare effects of reducing import tariffs on imported cereals. There is clear evidence that food price crisis accentuated food insecurity. It is also evident that reduction of import tariffs and improving market integration could be effective ways of fighting food insecurity in Kenya.

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Evidence from Henan Province

As a result of over three decades of economic reform, China has made rapid progress in increasing agricultural productivity and farmer incomes and alleviating rural poverty. However, agricultural productivity and rural industrial growth have slowed in recent years, and the income disparity between rural and urban households has widened rapidly. Future increases in agricultural productivity and rural incomes and a reduction of the rural-urban income gap are likely to depend on further structural change of the economy and within the agricultural sector. This means a smooth movement of labor out of the agricultural sector and land transfer to productive farmers who are able to achieve economy of scale. However, institutional factors still pose enormous challenges to the free movement of both labor and land resources. 

This study analyzes how one of these institutions, the land tenure arrangement, affects market-based land and labor transfer and agricultural production. It uses data collected in Henan province in central China and employs several econometric approaches. Important results include a finding that land tenure security and land transferability are incentives for household off-farm labor market and land rental market participation, while migration could facilitate land rental market development by increasing land rental supply, furthermore, the development of land rental markets improves the efficiency of land allocation, agricultural productivity, as well as technical efficiency. Based on the findings, the author recommends a set of policies oriented towards stimulating household off-farm employment and land rental market participation in the study area.

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An Empirical Study on Leather Industry

The poor performance of the rural economy in Indonesia led economic development planners to stimulate local growth, to encourage diversification of the industry base and to provide more appropriate assistance to the regions. This book is an attempt to investigate how cluster firms can be an effective organizing principle in economic development. What are the key characteristics of the cluster firms that form the cluster to manage the resources collectively. The analytical results shows that being part of a cluster allows firms to operate higher productively in sourcing inputs; access to or preference in the region; and coordinating with related companies. Cluster firms need lower investment and labour in operational but more productive in term of sales volume compare to firms in control cluster. Knowledge spillovers are a very important factor in the cluster of leather industry in the study area. It mainly depends on upon Labour, Demanding buyer, and Supplier specialization. This cluster allows workers to learn job-specific tasks and stay with current new developments. The results also report that supplier specialization has the greatest effect and the most important factor in the prediction of firm’s innovativeness in this cluster, because they produce inputs that are widely used and important to innovation. Besides positive effects, there may also negative externalities due to congestion and competition. In absolute terms the danger of move of risk-pooling is regarded as important on average in cluster compare to distance area. Business linkages are weak, market distortions, and the lack of skills and low technological capabilities of local firms. It is recommended that R&D firms are attracted to regions with university R&D, increasing infrastructure investments in the cluster periphery to create new market demands and linkages, the supply of knowledge intensive labour, stimulate and push collaborative clusters pilot projects, and established regional marketing programmes.

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Dairy sector is an important sector in Sub-Saharan Africa. Kenya’s dairy industry provides a model which is currently being followed, in some part, by neighbouring African countries. The growth in Kenya's dairy sector is constrained by a wide range of problems including access to inputs and milk markets. Collective milk marketing, through co-operatives and farmer groups offer economies of scale, payment arrangements that enable farmer to meet their livelihood needs, and access to input credit as well as other dairy-related services. However, knowledge on farmer preferences for the services offered by these collective marketing forms, and other barrier and opportunities for participation in such marketing forms is pertinent in identifying important incentives. Drawing from a sample of 300 dairy farmers in Nandi County, this book provides in-depth analyses and discussion of the resultant policy implications and strategic interventions necessary for improving service delivery and market access for dairy farmers. Econometric tools are used to derive answers to specified research questions. Dairy hubs, collective farmer-owned milk chilling and/ or bulking plants from which farmers also access other dariy-related services, form the basis of the study. The results of the study suggests that prioritising service provision, increasing farmers’ proximity to the hub services, and education are among the evident strategic interventions necessary for improving service delivery and market access for dairy farmers.

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In the wake of increasing economic scarcity of groundwater, food and livelihood security in arid and semi-arid regions of India and especially in the Chikkaballapur taluk (the study region) is threatened. Unabated groundwater overdraft coupled with inadequate recharge are leading to increasing probability of well failure, decline in water table and high levels of fluoride contamination. As major coping mechanism, farmers have adopted drip irrigation and resorted to water market.

This book analyzes dynamics of agricultural groundwater use in presence of water markets with three objectives: (i) to estimate the impact of water market on farming; (ii) to analyze factors influencing farmer’s participation in water market; and (iii) to estimate optimal path of water extraction in presence of water markets and other policy scenarios. The estimated dynamic optimization (optimal control) model indicated how much and how long the groundwater can be optimally extracted considering agro-economic and hydro-geological information. This study offers a cafeteria of policies for improving benefits from water markets and in reducing groundwater overdraft in hard rock areas.

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Livelihood Change and Adaptation

The book presents a study about how the Son La Hydropower Project in northwestern Vietnam has affected the livelihoods of both resettled and host households in a remote mountainous community. The book focuses on changes in livelihood assets, livelihood outcomes, land and income distribution, and factors enabling livelihood rehabilitation. The resettled households have experienced a substantial loss in natural capital, and as a result, experienced a significant decline in farm outputs and incomes. The livelihood adaptations shown by both the host and resettled households have been strongly conditioned by a lack of available livelihood assets and market access in the new location. As a result, it is questionable as to whether these households will be able to maintain their livelihood outcomes over the long run.

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Farming & Rural systems Economics Vol. 133

India is an agricultural based country where cotton is one of the major cash crops. Indian cotton farmers are facing many problems, foremost they are confronted with issues related to insect attacks particularly those from bollworms are of major concern. Bollworms are becoming resistant against insecticides due to an increased application and use of insecticides. Therefore, cotton cultivation became more risky. Bt cotton came up as an alternate of insecticide use on bollworms. After the introduction of Bt cotton, the area under Bt cotton and cotton production increased continuously in India. On the other hand, many researchers and NGOs criticized and raised doubts on Bt cotton performance. This book is an attempt to clarify the performance of Bt cotton in Northern India. This book analyses the impact of Bt technology on cotton production and environment as well as identifies motivational factors detrimental to the adoption of Bt cotton in the study area. The field survey revealed that Bt cotton, is environmentally (lower health cost and EIQ value) as well as economically (due to higher yield) beneficial. The logit model confirms that the adoption of Bt cotton is primarily linked to the minimization of the higher expenses for insecticides, health costs and having more cotton land. The Cobb-douglas production function confirmed that Bt cotton positively influences cotton production, reduces the dependency on insecticides use for bollworms. It provides room to policy makers to reduce the inputs subsidy. This study also suggests increasing public investment in the Bt cotton seed sector in order to reduce the dependency on the private sector.

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The issue of corruption can never be neglected in the development process. Particularly since the last decade, corruption has gained more attention by economists, but literature on microlevel corruption is still limited. This study aims to contribute to extend the research on this issue.
Corruption can affect a household in a number of ways. By increasing cost of inputs, corruption may negatively effect farm production. Alternatively by paying bribe a farmer can have more input and ultimately his production will be at higher level than the non-payers. Furthermore, determinants and impact of corruption may vary across households depending on their different socio-economic status. All these possibilities are addressed in this book. It uses primary data collected from Bangladeshi farm households. The book came out with several important empirical findings.
This book empirically identifies different farm and community level determinants of corruption. It also identifies determinants of different form of corruption and amount of bribe. The analyses show that how and why a same household have different probability of experiencing corruption in different sectors. The book empirically proves that depending on the production and marketing structure, corruption may have different effect on farm production. Finally, the impact of corruption on food security is estimated in the book. Using the findings of these empirical analyses, some important policy recommendations are provided for combating corruption.

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Food and nutrition security is important for welfare and economic growth. Most developing countries lack the means to access adequate nutrious foods. This condition has a crucial impact on their economic, social, and political status as well. In Sudan, the majorty of the people who are working in the agricultural sector and other related activities are susceptible to food and nutrition insecurity. In the dry land sector, the issues of cropping patterns, crop production, crop diversity, coping mechanisims, and income play an essential role in shaping food and nutrition security. This book offers an opportunity to evaluate the current situation of food and nutrition security among the farm households. It also focuses on the factors that influence the farming system and crop diversity as well. The farming system plays a fundamental key in supporting the income and food security in the dry land sector. However, it is greatly subjected to climatic and environmental factors that contribute to low crop output. The book also examines the application of coping mechanisims, food gap, food consumption patterns, and nutrient intake for the farm households. Data analyses were conducted using descriptive statistics, the Shannon index, censored Tobit regression model, coping strategies index (CSI), ordered probit regression model, food frequency, and binary logistic regression model.

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Driving forces and impacts on rural areas

In order to deal with the urbanization related problems, 1.3 billion population and scarcity of urban infrastructure ask China to find out an alternative way to urbanize over 50% rural population. Large urban-rural income gap, large regional divergence, large rural-urban migration, under-developed rural areas are challenging urbanization process. The book provides theoretical and quantitative analysis to identify the significant factors influencing urbanization in China, especially the significant factor of rural industry as the alternative way of urbanization was identified using mathematical econometric model. Region-based rural industry was further analyzed to unveil and evaluate the different impacts on it using time series model ARIMA. At last the local rural industry in Shandong was investigated as case study to make an example how to develop rural industry in reality. Finally, comprehensive factor-related recommendations are made for national and regional policy makers.

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A Socio-Economic Analysis

IFood insecurity and chronic hunger are now familiar themes in the development discourse of Kenya and other Sub-Saharan African countries. In spite of the agricultural policy initiatives to achieve food security, mainly food self-sufficiency related, Kenya is still confronted with several challenges. More than 70 per cent of the people reside in rural areas out of whom 60 per cent are absolute poor and subsist on less than one dollar per day. The reliance of more than 75 per cent of rural dwellers on agriculture for livelihood amidst lingering food insecurity validates an investigation of the sector as a source of food entitlement. Based on a sample of 183 smallholder farmers in Vihiga County of Western Kenya, the leitmotif of the book is to examine the complex linkage between the production of marketable agricultural products (cash crops) as well as food crops for subsistence on the one hand and the income situation and food security on the other hand. The book thus offers a felicitous discussion of the comparative advantage of cash crop farming vis-à-vis food crops, the role of cash crops in contributing to improvement of food security and income, the determinants of ex-ante food insecurity coping strategies, as well as household and nutritional expenditure. It gives a clear analysis of Kenya’s instruments of agricultural and food policies and exhibits the insights of the relevant food security and demand theories. The data is appropriately evaluated with the aid of different econometric methods and analysed with regard to the specified research questions and objectives. Ceteris paribus, the results indicate a positive correlation between tea farming, characterized by relatively larger farms, and income, hence food security. The policy recommendations include among others, avoidance of farm subdivision through promotion of agricultural structural change, diversification of asset ownership besides farming, more vocational training for increased off-farm employment as well as the targeting of women and the absolute poor in agricultural extension.

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Inequitable distribution of water is the major obstacle for most of the locally managed irrigation system in Nepal. This inequity is primarily brought by an asymmetrical power situation in the society. This book presents an economically optimal water distribution model considering the political dimension for a locally managed and glacier based irrigation system located in trans-Himalayan region of Nepal. Plugging the power coefficient into economic modelling is the main distinctive feature of this study over the other conventional optimization models. The primary data were collected from three VDCs of Upper Mustang namely Chhuksang, LoManthang and Chhoser where the farmers are practicing locally based and centuries-old irrigation systems and a distinct social hierarchy has assigned defined roles and responsibilities for each hierarchical level with regards to irrigation management. To address the challenges, firstly, the local political power relation is analysed and power coefficient is derived. Their problem is modelled into principal-agent bargaining relationship based upon who have water rights and who have labour endowment. Their combined benefit is maximized incorporating the respective power coefficient subject to given constraints. The empirical finding shows that each interest group can be benefitted when they participate in principalagent bargaining framework. It can be concluded that a significant improvement in the society can be achieved only by slightly modifying the tactic of exchanging resources between the conflicting interest groups.

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Compendium of Approaches for Socio-Economic and Ecological Development in Developing Countries Vol. IV

The compendium Volume III and Volume IV are published on the occasion of the 20th anniversary of our Ph. D. Program “Agricultural Economics and Related Sciences”. Both volumes contain quite a large number of papers pertaining to the issues and challenges in rural development from former and present students of the program as listed below.The Volume III consists of twenty one papers organized under five broad sub-headings (1st - 5th). The first group of papers are in General Equilibrium modelling, which basically deals with the role of Agriculture in the macro economy using CGE approach. The second block presents agricultural sector models dealing more specifically with the agricultural sector. The third section is all about impact assessment of development interventions and socioeconomic projects in rural areas. Correspondingly, the fourth sub-section deals with efficiency and productivity of agricultural production focusing on efficiency variations between farms and regions. Frontier Production Function and Data Envelope Analysis are applied. And finally, the fifth chapter highlights different methods and practices concerning conservation and management of natural resources. These contributions aim is to mitigate environmental problems thereby reducing the hunger, malnutrition and poverty.The Volume IV is comprised of seventeen papers organized under four major chapters (6th - 9th). Section six contains five papers about agricultural markets, marketing activities, technology adoption, commercialization and efficient allocation of available resources. The seventh chapter is about policy issues and rural finance and credit, a major production constraint faced by the farmers specifically in rural areas of developing countries. More critical and catchy issues are included in the eighth chapter “poverty and food security issues”. Topics regarding education and extension in relation to agriculture are presented in the ninth section. And this section ends up with the most commonly spoken issue women’s role and capacity to cope with household shocks.

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Compendium of Approaches for Socio-Economic and Ecological Development in Developing Countries

The compendium Volume III and Volume IV are published on the occasion of the 20th anniversary of our Ph. D. Program “Agricultural Economics and Related Sciences”. Both volumes contain quite a large number of papers pertaining to the issues and challenges in rural development from former and present students of the program as listed below.

The Volume III consists of twenty one papers organized under five broad sub-headings (1st - 5th). The first group of papers are in General Equilibrium modelling, which basically deals with the role of Agriculture in the macro economy using CGE approach. The second block presents agricultural sector models dealing more specifically with the agricultural sector. The third section is all about impact assessment of development interventions and socioeconomic projects in rural areas. Correspondingly, the fourth sub-section deals with efficiency and productivity of agricultural production focusing on efficiency variations between farms and regions. Frontier Production Function and Data Envelope Analysis are applied. And finally, the fifth chapter highlights different methods and practices concerning conservation and management of natural resources. These contributions aim is to mitigate environmental problems thereby reducing the hunger, malnutrition and poverty.

The Volume IV is comprised of seventeen papers organized under four major chapters (6th - 9th). Section six contains five papers about agricultural markets, marketing activities, technology adoption, commercialization and efficient allocation of available resources. The seventh chapter is about policy issues and rural finance and credit, a major production constraint faced by the farmers specifically in rural areas of developing countries. More critical and catchy issues are included in the eighth chapter “poverty and food security issues”. Topics regarding education and extension in relation to agriculture are presented in the ninth section. And this section ends up with the most commonly spoken issue women’s role and capacity to cope with household shocks.

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Analysis of Productivity, Efficiency and Profitability of Private Farms in Tashkent Region, Uzbekistan

The number of private farms in Uzbekistan is constantly increasing and becoming the major type of the production system. All agricultural reforms have been directed to the development of private farms in order to establish a market oriented agricultural sector. The book provides an analysis of the productivity, efficiency and profitability level of private farms at the regional and household level in order to analyse the performance of private farms, specialised in the two “strategic crops,” cotton and wheat. The results indicate on with increasing productivity growth of agriculture represented by private farms in the Tashkent region during the third step of agricultural reforms (2002 – 2005). Cotton and wheat production is still under strict state control. Therefore, cotton and wheat growing private farms are less flexible in their agricultural activities than the private farms cultivating other crops. Cotton and wheat growing private farms were found to be technically efficient, but not economic efficient. This is due to internal and external factors that influence their production activities, which in detail analysed in the book.

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In developing countries like Bangladesh, where many people live below the poverty line and the scope to increase the private resource is very limited, the role of common resources like forest, water etc. are very important. There are several problems and conflicts that arise due to lack of proper resource management - those ultimately affect yield, increase cost, reduce profit and efficiency for the resource users. It is hypothesised that collective effort is the best and sustainable way to proper common resource management. This book is an attempt to investigate how users’ efficiency is related to resource management, what are the characteristics of the community as well as individuals – that motivate users to manage the resource collectively. The analytical result shows that resource inequality reduces users’ efficiency. It also discourages users to manage resource collectively. In this way, inequality→ reduced efficiency →resource mismanagement – works as a downward spiral for the common resource reliant people. If the trend continues, then whole of the resource goes to few users, inequality increases, the local users loss the user right and they become resource less – which is very alarming for the resource using community. To get rid of this trend, local users should be organized through forming users’ associationthat increase social cohesion. Policy could be recommended for: to provide incentives to the actual users to hold their resource, good relationship between users association and government organization, and providing the facility of training and proper extension services.

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Empirical Studies on Ethiopian Smallholders

Ethiopia’s economy is predominantly agrarian. Much of the country’s agricultural production activities are rainfed. As a result, fluctuations in weather conditions have serious implications on the overall wellbeing of smallholders. Furthermore, there is a growing concern that climate change is increasing the frequency of these fluctuations. Using a panel dataset of rural farm households covering fifteen villages of Ethiopia during 1994-2004, this book is concerned with assessing the impact of rainfall variability on smallholders’ food security and examining how households adjust their participation in off-farm activities to cope with weather risk. Moreover, the book attempts to empirically explore the role of social capital in the economic wellbeing of households. In Ethiopia, given that the rural population is endowed with few productive assets and markets are not well developed, social networks may play essential roles in households’ resource access and risk management thereby promoting households’ overall wellbeing. Based on the insights gained from the results of the study, the book provides several policy conclusions and wider implications which are pertinent for rural households in Ethiopia as well as other places with a similar socio-economic setting.

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A Case Study of Peasants in Chui, Osh and Jalal-Abad Regions 

One central problem in the efforts to increase rural productivity and reduce poverty is insufficiency of production capital. There are high expectations that credit can help to enhance farm income. This book investigates the relation of agricultural credit on farm development in three regions of Kyrgyzstan. It is widely contended that capital shortages significantly constrain the productivity of peasant farmers and as such they remain within the group with the lowest income in the society. Credits are needed by peasant farmers to be able to invest in fertilizers, improved seeds quality, and modern farm machinery to enhance their productivity. While the inadequate infrastructural facilities, which limit the access to improved inputs and extension services by peasant farmers, and raise transportation costs for both inputs and produce, are one of the main constraints on the realisation of production potential. Therefore, in order to improve present situation of peasant farms during transition period needed to develop appropriate finance institutions for rural areas with low interest rate, low transaction costs and simplify application procedures. The current study has brought into focus a salient research problem that is yet to be addressed so as to gain more knowledge on the possible ways of enhancing agricultural development and alleviating the problem of poverty. This study has looked into the determining use and productivity of the different factors of production by peasant farmers also the credit lending policies. The financial services are financing insufficiently in order to increase farm production because the demand for credit for agricultural purposes is weak due to marketing problems as reported by farmers. A detailed study on marketing is needed to show that the availability of marketing services will stimulate the demand for credit for agricultural purposes and thus increase productivity. Therefore, further research is necessary to understand in detail the conditions and existing transactions.

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An Empirical Study on Rice Sector

Organic agriculture is one of several approaches to sustainable agriculture. In most developing as well as developed countries, the share of organic farming is increasing. It has commercial viability and may provide solutions to the current problems in conventional agriculture. Though only a small percentage of farmers are participating in organic projects. This leads to the general question about what is the way forwards and the right place of organic farming in Thai agriculture and also in the whole economy. This book attempts to assess the farm performance and socio-economics of organic and conventional farms. Several economic and social criteria were considered. Quantitative and qualitative parameters are applied in order to understand the driving forces towards development of organic farming through lesson of organic rice in Thailand. The study covers problem realization, farming techniques, guidelines of agricultural policy, and extension tool as well as market development of organic farming.

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The Case of Eastern Highlands of Ethiopia

Land degradation is among the major problems threatening productivity growth especially in developing countries where agriculture remains the largest sector in the economy. Ethiopia is among the Sub-Saharan countries which are reported to suffer severe land degradation. Reversing the deterioration of crop productivity resulting from land degradation, and ensuring adequate food supplies to the fast growing population is a formidable challenge in the country. Effective decisions against poverty, household food insecurity, and land degradation require, among others, a careful assessment of the complex relationships among land management strategies, agricultural productivity, and rural income levels. This book systematically addresses these linkages and factors affecting components of the linkages. It uses data collected from Eastern Highlands of Ethiopia and employs advanced econometric tools which are beyond single equation regressions. Important results include a negative reciprocal relationship between fertilizer and manure applications; interdependence of the seemingly unrelated intercropping and conservation tillage; the difference in decisions on adoption of stone-terraces and on the amount of labor devoted for that; positive effect of terraces on per capita income and insignificant effect of income on adoption of terraces; and many others. The book finally highlights important policy implications.

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A case from Central Java - Indonesia

The co-existence of both (bio)-physical environment and socioeconomic problems might lead to the relationship proposition between the availability of rural resources and the livelihood development of farming families in mountain area. Since farming families are distributed in different locations along the gradual line of mountain areas, their characteristics are also different. This book provides a spatial assessment of rural resources and livelihood development by emphasizing on the land availability and socioeconomic analysis of past and current development of resource utilization, both at family and spatial levels. Spatial assessment is carried out by utilizing GIS and Remote Sensing through three approaches, i.e.: linking, interpolating, and relating. The linking approach is aimed to generalizing data into the same unit of analysis, i.e.: spatial unit. Interpolating approach is necessary to generate data spatially from collected sample points where data is not available for the whole area. Meanwhile, spatial relationship between socioeconomic and physical environmental characteristics is resulted from the relating approach. The study indicates three different results, i.e.: spatial differentiation, socioeconomic zones, and spatial based income modeling in the study area which is divided into three sub study areas, i.e.: higher, middle, and lower area. This book also shows how GIS and Remote Sensing can be contributed in a farming system research on a spatially explicit model as well as on a regional basis.

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An Analysis of Oil Seed Farming and Biodiesel Production in the Brazilian Savannah

The biofuel production has been greatly deliberated in Brazil. This has led the country to develop new policies and implement the Brazilian program of biodiesel use and production (PNPB) in 2004 aiming at fostering rural and regional development and at the same time promoting a new and clean source of energy. In this context, the book contributes to the better understanding of different stages of biodiesel production in the Brazilian savannah, showing the linkages between the oil seed activity and the social inclusion, income generation, food security and climate change. For this purpose, the fuzzy set logic was applied to support the assessment of linkages between oil seed production and the inclusion of poor farmers in the biodiesel chain. Scenarios comprising the current and potential food production were established to estimate the impacts of oil seed production on local food security. Moreover, scenarios were also established to estimate the impacts of oil seed activity on climate change, mainly through CO2 emissions due to deforestation of native forests. The book also points out the implications of oil seed production on rural and regional development under different policy strategies and scenarios. A linear programming, as well as positive mathematical programming were applied, at farm and regional level, respectively, to estimate the impacts of oil seed activity on resource allocation and farmer’s income. The biodiesel production in the Brazilian savannah can now be better gauged in other parts of the Brazilian Legal Amazon region since the book highlights one of the most discussed topics about bioenergy: oil seed production taking precedence over the sustainable development.

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The most of the peri-urban farmers in the Middle Mountains of Nepal are smallholders and their farm size is declining due to rapid population growth, unsustainable land management practices and pro-production government policies. Imprudent use of agro-chemicals in farming is pervasive among the farmers in the peri-urban areas of the Kathmandu Valley. Rural-urban interface of the valley possesses diverse farming practices, which are basically due to the farmers’ experiences on resource degradation owing to indiscriminate use of agro-chemicals, diversified need of the urbanites, resources availability and market accessibility among others. This book presents the socio-economic and spatial aspects of the different farming systems in and around the peri-urban areas of the valley. It gives a comprehensive and comparative picture of the three farming systems, which are located near to each other but with different mode of operation. Relevance of the prevalent farming practices is dealt with using Analytic Hierarchy Process modeling. As organic farming is a new endeavor in Nepal, this book presents a complete overview of organic farming starting from history to the market response analysis of the organic vegetables. Preferential assessment of the consumers to different attributes of the vegetables is done through conjoint modeling. The book also presents the spatial integration of socio-economic information to find the spatial relevance of the farm-family resources and its effects on farming development. Future developments of the smallholder peri-urban farms are dealt with by critically evaluating several potential strategies at the family level using GAMS and at regional level with spatial explicit modeling.

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The study examines linkages among rural poverty, land management practices and agricultural productivity. In separate chapters, the book covers several issues. In the introductory part, it touches upon the magnitude of poverty, land degradation and low agricultural productivity both at international and local levels. The book deals with theories concerning poverty-land degradation linkages. A major emphasis is also placed on rural development policies and land tenure systems in Ethiopia, in general and the study area, in particular. Using data collected from 254 randomly selected farm households, the book considered three agro-ecological zones. It then analyzes poverty incidence and major triggering factors. It also analyzes the major factors affecting the use of sustainable land management practices. Last but not least, the study gauges technical efficiency level of farmers and identify factors causing inefficiency.  

The book explicates that the above-mentioned problems are in a quagmire of causality as far as the study area is concerned. This implies that poverty, land management practices, and low agricultural productivity influence one another and are jointly influenced by several independent factors. Findings in this book suggest that the usual assumption of targeting poverty per se does not help much. Instead, efforts should be made to target both land management issues and agricultural productivity simultaneously. In fact, given the bulk of the population dwelling in rural areas (earning incomes directly from agriculture), agriculture is an essential component in the fight against poverty. In this regard, both short-term productivity gains and long-term transformation issues need to be considered.

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A comparative analysis

Concepts of economic approaches in farming and rural development in developing countries often focus on the decision-making in farms assuming a single decision-making body. Reality has shown that decision-making processes are more complex in three ways. First, in family farms the farm is often related to household, processing and off-farm activities. This requires to not only look into the farm as a technical unit but also the other sectors of the family living sphere. The interrelationship between farm, household, processing and off-farm activities brings the economic and social problem of allocating the family resources between these family sectors in the center of a family based system concept. This publication gives special interest to the involvement of women in the decision-making process. Second, these activities are not only carried out by different persons of the family but also the decision-making is involving many people. This requires including the family as the decision-making body. Special role is given to the husband and the wife in the family as well; sometimes the older persons of the family as well as younger generation may have an important impact in the decision-making. This publication gives special interest to the food security aspect of the household and women’s activities in the complex system of farm/household/off-farm and off-household activities and decision-making. Third, decision-making in rural areas has a third dimension which is in a vertical line from individual family to the society, such as to the village society, the clan and the institutions in rural areas and decision-making bodies for the rural infrastructure. This part is not explicitly dealt with in this publication, but is of equal importance to understand and influence the multi-faced process of decision-making in rural areas.

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A New Institutional Economics Perspective

A rapid growth of high value crops in the international trade is becoming an incentive for a significant rise in production and export of these crops, especially in developing countries. In the Ethiopian case, given the declining export earnings from traditional exports, policy makers as well as donor agencies have shifted their attention towards diversification of export crop production for potential income growth. To this end, major rural development strategies of the country envisage significant scope for achieving greater diversification and commercialization of smallholders. The move towards high value crop production and marketing, however,  requires a huge role of markets and institutions. This study investigates the Ethiopian banana market from a New Institutional Economics (NIE) perspective by using both econometric and mathematical models in order to identify intervention points that accelerate market integration. The result among others reveals that the market is characterized by existence of high transaction costs related to information and search, negoitations and bargaining, as well as monitoring and enforcements. It is learned that households with better bargaining power, better access to transporation, information, as well as members of farmers of organizations are better off in terms of income generation. Result from a mathematical programming model also showed that farmers‟ current market channel choice decision is sub-optimal. Hence, enhancing high-value crops production and marketing and in turn improving the livelihood of smallholders highly depends on minimizing the market inperfections. This may require policy makers to focus on: establishing appropriate institutions, improving market information systems, developing rural infrastructure, strengthening farmers organization, resolving financial constraints through credit, enhancing value added capacity, encouraging competition, as well as encouraging investment that accelerate future vertical and horizontal integration.

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Migration is an important livelihood strategy followed by the farm households in the hills of Nepal. When labour forces migrate from the farm sector it is expected to impact not only the farm production but also the household food security and the farm lifestyles. This book investigates empirically the factors determining international migration decision of farm households and their impact on farm production, household food security and the lives of those left behind. The research focuses on two distinctly different regions with different migration portfolios. It uses various econometric tools in its empirical analysis. The results show that migration on its own is unable to commercialize the farming sector. And its impact on subsistence farming in the two regions under study differed based on the remittances that the migrant households receive. When the remittances are high, it has negative impact on the subsistence farming practices of the households and vice versa. However, migration has an overall positive impact on the household food security situation irrespective of the amount of remittances received. The book also highlights some important policies towards migration-development interlinkages.

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In Vietnam, beef is in a high national demand. A majority of the cattle population is raised in household farms. The Northern provinces are encouraged to improve beef production in quantity and meat quality. Developing beef production must take into account bio-economic performance of cattle under conditions of varying farming systems and their specific purpose. This study investigates cattle production under three stratified farm types in northern mountainous region of Vietnam, including: prevalent smallholder mixed farms (small farms); smallholder mixed farms with a tendency to increased herd size and collective use of natural pastures (medium farms); and specialized beef-breeding farms (large-scale farms). The study compares the relation of poverty level and resource endowment between cattle keeping and non-cattle keeping farms and between farms of different remoteness and ethnic groups. This book aims to compare the suitability, efficiency and sustainability for beef production of the different farm types. The potential for developing beef production is assessed in a stratified sample of farm types and in a survey on a random sample of smallholder farms in the study region. The study was carried out in Son La province, a northern mountainous province of Vietnam. Results revealed that the differences in animal productivity, farm organization and economic success of household farms were related to the region. Household farms raised cattle at low input levels. The total revenue from cattle depended on the use of non-market functions of cattle on the household farms. The less poor farmers had more advantages than the poorer in allocating different resources for keeping higher numbers of cattle together with other livestock species. High economic losses were observed on all large farms due to the lack of professional management, high feed costs and low animal performance. The most promising type of farm for profitable beef production in the study region was the medium mixed farm, where the farmers could increase their cattle production on the basis of available fodder resources from pastures with limited use of supplemental feed. The spontaneous formation of farmer groups could be developed towards co-operative beef raising and marketing. The support of the province for implementing appropriate policies and credit programs to provide initial capital and connection to markets is necessary. Development of the medium farms could be a contribution to the beef market and poverty reduction in the region.

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