Farming or burning? shadow prices and farmer’s impatience on the allocation of multi-purpose resource in the mixed farming system of Ethiopia
AbstractIn crop-livestock mixed farming system where farm yard manure (FYM) is considered as important multi-purpose resource such as source of soil organic matter, additional source of income and household source of energy, soil fertility depletion could takes place within the perspective of the household allocation pattern of FYM. This paper estimates structural FYM-allocation model in the presence of corner solution, with the objective of examining the role of various returns to FYM and farmer’s impatience on the propensity to allocate FYM for alternative purposes. We illustrate the model using data based on a random sample of 493 farm households in the central highlands of Ethiopia. We find that the higher the selling price of FYM is the higher the incentive for farmers to divert the resource from farming to marketing for burning outside the farm households. A farmers’ decision to turn FYM from farming to marketing due to heterogeneity in time preference is also an alternative account to explicate the correlation between farmers’ impatience and resource allocation. The implication is that the high discount rate and the rise of price encourage current consumption that has long term effect on the sustainable management of soil resource. The results are of paramount importance for the design of sustainable land management policy where soil fertility depletion is salient for low agricultural productivity.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 116080.
Date of creation: 2011
Date of revision:
impatience; shadow price; allocation; farm yard manure; Ethiopia; Farm Management; Q01; Q12;
Find related papers by JEL classification:
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-10-15 (Africa)
- NEP-AGR-2011-10-15 (Agricultural Economics)
- NEP-ALL-2011-10-15 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lence, Sergio H., 2000. "Using Consumption and Asset Return Data to Estimate Farmersï¾’ Time Preferences and Risk Attitudes," Staff General Research Papers 1930, Iowa State University, Department of Economics.
- Shiferaw, Bekele & Holden, Stein T., 1998. "Resource degradation and adoption of land conservation technologies in the Ethiopian Highlands: A case study in Andit Tid, North Shewa," Agricultural Economics, Blackwell, vol. 18(3), pages 233-247, May.
- Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
- Fehr, Ernst & Leibbrandt, Andreas, 2008.
"Cooperativeness and Impatience in the Tragedy of the Commons,"
IZA Discussion Papers
3625, Institute for the Study of Labor (IZA).
- Ernst Fehr & Andreas Leibbrandt, 2008. "Cooperativeness and Impatience in the Tragedy of the Commons," IEW - Working Papers 378, Institute for Empirical Research in Economics - University of Zurich.
- Breusch, T.S. & Pagan, A.R., .
"The Lagrange multiplier test and its applications to model specification in econometrics,"
CORE Discussion Papers RP
-412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Breusch, T S & Pagan, A R, 1980. "The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 239-53, January.
- Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
- Mekonnen, Alemu & Köhlin, Gunnar, 2009. "Biomass Fuel Consumption and Dung Use as Manure - Evidence from Rul Households in the Amrahara Region of Ethiopia," Working Papers in Economics 394, University of Gothenburg, Department of Economics.
- Rasmus Heltberg & Thomas Channing Arndt & Nagothu Udaya Sekhar, 2000. "Fuelwood Consumption and Forest Degradation: A Household Model for Domestic Energy Substitution in Rural India," Land Economics, University of Wisconsin Press, vol. 76(2), pages 213-232.
- Holden, Stein T. & Shiferaw, Bekele & Wik, Mette, 1998. "Poverty, market imperfections and time preferences: of relevance for environmental policy?," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 105-130, February.
- Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-71, March.
- Gerald Shively & Monica Fisher, 2004. "Smallholder Labor and Deforestation: A Systems Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1361-1366.
- Sergio H. Lence, 2000. "Using Consumption and Asset Return Data to Estimate Farmers' Time Preferences and Risk Attitudes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 934-947.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Mahmud Yesuf & Randall A. Bluffstone, 2009. "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1022-1037.
- Kassie, Menale & Zikhali, Precious & Manjur, Kebede & Edwards, Sue, 2008. "Adoption of Organic Farming Technologies: Evidence from Semi-Arid Regions of Ethiopia," Working Papers in Economics 335, University of Gothenburg, Department of Economics.
- Shively, Gerald & Pagiola, Stefano, 2004. "Agricultural intensification, local labor markets, and deforestation in the Philippines," Environment and Development Economics, Cambridge University Press, vol. 9(02), pages 241-266, May.
- Monica Fisher & Gerald E. Shively & Steven Buccola, 2005. "Activity Choice, Labor Allocation, and Forest Use in Malawi," Land Economics, University of Wisconsin Press, vol. 81(4).
- Place, Frank & Barrett, Christopher B. & Freeman, H. Ade & Ramisch, Joshua J. & Vanlauwe, Bernard, 2003. "Prospects for integrated soil fertility management using organic and inorganic inputs: evidence from smallholder African agricultural systems," Food Policy, Elsevier, vol. 28(4), pages 365-378, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.