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Rural Household Access to Assets and Markets: A Cross-Country Comparison

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Abstract

The sluggish supply response in most developing countries to the apparently favourable agricultural market situation of the past few years can be explained by the limited ability of price incentives to bring about an increase in production and marketed surplus in the presence of binding non-price constraints. This article characterises farm household heterogeneity in access to assets, markets and infrastructure drawing on household survey data from 15 developing countries. We relate this heterogeneity in access to household ability to engage successfully in agricultural output markets and find consistent supporting evidence for the hypothesis that this lack of access is significantly constraining their potential to engage successfully in agriculture.

Dans la plupart des pays en développement, la réaction de l′offre à la situation des marchés agricoles – depuis quelques années favorable – est lente, et ce en raison de la capacité limitée des incitations en termes de prix à générer une augmentation de la production et des excédents commercialisés, en présence d′importantes contraintes non tarifaires. S′appuyant sur des données d′enquêtes sur les ménages recueillies dans 15 pays en développement, cet article décrit l′hétérogénéité des ménages agricoles en matière d′accès aux actifs, marchés et infrastructures. Nous montrons la relation qui existe entre cette hétérogénéité et la capacité des ménages à s′engager avec succès sur les marchés de produits agricoles, et trouvons des preuves solides soutenant l′hypothèse selon laquelle ce manque d′accès limite fortement leur potentiel à s′engager dans l′agriculture de manière profitable.

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Notes

  1. We do not dwell upon with human capital or social capital issues, and we only marginally and indirectly touch upon geographic and public capital issues in this article.

  2. The (much broader) commonly accepted definition of institutions in the NIE is that of North (1990) who defines institutions as ‘the humanly devised constraints that shape interaction [and] structure incentives in human exchange, whether political, social, or economic’.

  3. See Lastarria-Cornhiel and Melmed-Sanjak (1999) for a review and an extensive bibliography of studies of land tenancy in Asia, Africa and Latin America.

  4. From the pool of possible surveys, the choice of particular countries was guided by the desire to ensure geographic coverage across the four principal development regions – Asia, Africa, Eastern Europe and Latin America, as well as adequate quality and sufficient comparability in codification and nomenclatures. Furthermore, an effort was made to include a number of IDA (International Development Association) countries as these represent developing countries with higher levels of poverty and are therefore of particular interest to the development and poverty reduction debate.

  5. A fuller description of the name and characteristics of each survey is available on the RIGA website: www.fao.org/economic/riga.

  6. We classify households as agricultural if they have any income or expenditure from on-farm activities.

  7. The RIGA database was created through a joint project between the Food and Agriculture Organization and the World Bank.

  8. Missing values are imputed using the median outcome at the community or some higher administrative level. Imputations are never performed on more than 3 per cent of the sample so to limit the bias imputing may place on the analysis.

  9. To the extent that an inverse farm size–productivity relationship holds, this may also be contributing to improving the productivity of the farm sector.

  10. The index is normalised to have a mean of zero based on the distribution of household ownership with respect to all inputs for each survey. The average value of the index cannot be compared across surveys as the variables used for each index's creation may vary in choice or definition for some surveys. So, despite consistency in methodology across surveys, the value of the index is only comparable across households within but not across surveys.

  11. Throughout the article, we do not attempt to discriminate supply and demand-side issues in access to assets and input markets.

  12. For many years in fact pesticide overuse has been a problem in Vietnam (see, for example, Nguyen and Tran, 1999).

  13. Results over expenditure quintiles are not reported, but available upon request from the authors.

  14. As with input use, we recognise that credit use is not equivalent to credit access, but we are limited by the information available in the surveys.

  15. With the exception of the Albania share of crop production sold regression, which was estimated using the two-step Heckman model since the maximum-likelihood procedure would not converge.

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Acknowledgements

The views expressed in this article are those of the authors and should not be attributed to the institutions with which they are affiliated. The excellent support of Genny Bonomi, Stefania Di Giuseppe and Takis Karfakis is gratefully acknowledged. We would like to thank Kostas Stamoulis, Karen Macours, Alain de Janvry, Elisabeth Sadoulet, Derek Byerlee, Ugo Pica Ciamarra and Gustavo Anriquez for constructive suggestions on the analysis of the data. We would also like to thank participants in the 2007 Agricultural Economics Society meetings in Reading and the 106th seminar of the European Association of Agricultural Economists for comments and discussion.

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Appendix

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Table A1

Table A1 List of variables used in the analysis

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Zezza, A., Winters, P., Davis, B. et al. Rural Household Access to Assets and Markets: A Cross-Country Comparison. Eur J Dev Res 23, 569–597 (2011). https://doi.org/10.1057/ejdr.2011.15

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