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Impacts of prices and transactions costs on input usage in a liberalizing economy: evidence from Tanzanian coffee growers

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  • Alex Winter-Nelson
  • Anna Temu

Abstract

Despite improvements in production incentives, agricultural output in Africa remained sluggish through the 1990s. Low use of purchased inputs may be part of the cause of persistently low productivity in African agriculture. This article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among Tanzanian coffee growers. A sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions. Travel costs in input and output markets have distinct effects on input usage, implying distinct avenues for interventions to promote more intensive use of agricultural inputs. Copyright 2005 International Association of Agricultural Economics.

Suggested Citation

  • Alex Winter-Nelson & Anna Temu, 2005. "Impacts of prices and transactions costs on input usage in a liberalizing economy: evidence from Tanzanian coffee growers," Agricultural Economics, International Association of Agricultural Economists, vol. 33(3), pages 243-253, November.
  • Handle: RePEc:bla:agecon:v:33:y:2005:i:3:p:243-253
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    1. World Bank, 2001. "African Development Indicators 2001," World Bank Publications, The World Bank, number 13925.
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    1. Liverpool-Tasie, Lenis Saweda O. & Omonona, Bolarin T. & Sanou, Awa & Ogunleye, Wale, 2015. "Is increasing inorganic fertilizer use in Sub-Saharan Africa a profitable proposition ? evidence from Nigeria," Policy Research Working Paper Series 7201, The World Bank.
    2. Ndoro, Jorine T. & Hitayezu, Patrick & Mudhara, Maxwell & Chimonyo, Michael, 2013. "Livelihood factors influencing market participation and supply volumes decisions among smallholder cattle farmers in the Okhahlamba Local Municipality, South Africa: Implications for agricultural exte," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160477, African Association of Agricultural Economists (AAAE).
    3. repec:bla:jageco:v:68:y:2017:i:1:p:22-44 is not listed on IDEAS
    4. Larson, Donald F. & Gurara, Daniel Zerfu, 2013. "A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia," Policy Research Working Paper Series 6681, The World Bank.
    5. O’Gorman Melanie, 2015. "Africa’s missed agricultural revolution: a quantitative study of the policy options," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 561-602, July.
    6. Larson,Donald F. & Muraoka,Rie & Otsuka,Keijiro, 2016. "On the central role of small farms in African rural development strategies," Policy Research Working Paper Series 7710, The World Bank.
    7. Bernard, Munyua & Hellin, Jonathan & Nyikal, Rose Adhiambo & Mburu, John G., 2010. "Determinants for Use of Certified Maize Seed and the Relative Importance of Transaction Costs," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96423, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Africa (AEASA).
    8. Liverpool-Tasie, Lenis Saweda, 2012. "Targeted Subsidies and Private Market Participation: An Assessment of Fertilizer Demand in Nigeria:," IFPRI discussion papers 1194, International Food Policy Research Institute (IFPRI).
    9. Mekonnen, Tigist, 2017. "Impact of agricultural technology adoption on market participation in the rural social network system," MERIT Working Papers 008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Khor, Ling & Zeller, Manfred, 2015. "Perception of Substandard Fertilizer and Its Impact on Use Intensity," 2015 Conference, August 9-14, 2015, Milan, Italy 211843, International Association of Agricultural Economists.
    11. Baylis, Katherine R. & Chhatre, Ashwini & Prasanna, Satya & Songsermsawas, Tisom, 2012. "Friends or Traders? Do social networks affect the use of market mechanisms by farmers in India," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124889, Agricultural and Applied Economics Association.
    12. Akramov, Kamiljon T., 2009. "Decentralization, agricultural services and determinants of input use in Nigeria:," IFPRI discussion papers 941, International Food Policy Research Institute (IFPRI).
    13. Tione, Sarah Ephridah, 2011. "Analysis of Effectiveness of Modern Information and Communication Technologies on Maize Marketing Efficiency in Lilongwe and Dedza Districts and Selected Markets of Malawi," Research Theses 198525, Collaborative Masters Program in Agricultural and Applied Economics.
    14. Lenis Saweda O. Liverpool-Tasie, 2014. "Fertilizer subsidies and private market participation: the case of Kano State, Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 663-678, November.
    15. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    16. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "Are Farmers Under-Utilizing Fertilizer? Evidence from Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126739, International Association of Agricultural Economists.
    17. Tigist Mekonnen Melesse, 2015. "Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia," Working Papers 2015/06, Maastricht School of Management.
    18. Sheahan, Megan & Black, Roy & Jayne, T.S., 2013. "Are Kenyan farmers under-utilizing fertilizer? Implications for input intensification strategies and research," Food Policy, Elsevier, vol. 41(C), pages 39-52.
    19. Hounkonnou, Dominique & Kossou, Dansou & Kuyper, Thomas W. & Leeuwis, Cees & Nederlof, E. Suzanne & Röling, Niels & Sakyi-Dawson, Owuraku & Traoré, Mamoudou & van Huis, Arnold, 2012. "An innovation systems approach to institutional change: Smallholder development in West Africa," Agricultural Systems, Elsevier, vol. 108(C), pages 74-83.
    20. Diao, Xinshen & Nwafor, Manson & Alpuerto, Vida & Akramov, Kamiljon & Salau, Sheu, 2010. "Agricultural growth and investment options for poverty reduction in Nigeria," IFPRI discussion papers 954, International Food Policy Research Institute (IFPRI).
    21. Liverpool-Tasie, Lenis Saweda O. & Omonona, Bolarin T. & Sanou, Awa & Ogunleye, Wale O., 2017. "Is increasing inorganic fertilizer use for maize production in SSA a profitable proposition? Evidence from Nigeria," Food Policy, Elsevier, vol. 67(C), pages 41-51.
    22. Olarinde, Luke O. & Ayanwale, Adeolu B. & Oladunni, Olufemi A. & Nokoe, Kaku S. & Adekunle, Adewale A. & Fatunbi, Oluwole, 2013. "The Integrated Agricultural Research for Development (IAR4D) and its Impacts on marketed crops: Data Analysis of the Kano-Katsina-Maradi Pilot Learning Site," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161450, African Association of Agricultural Economists (AAAE).
    23. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "What is the Scope for Increased Fertilizer Use in Kenya?," Food Security International Development Working Papers 135283, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    24. Arega, D.A. & Manyong, Victor M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, George D., 2008. "Smallholder marketed surplus and input use under transactions costs: maize supply and fertilizer demand in Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52074, African Association of Agricultural Economists (AAAE).

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