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Production costs and input substitution in Zimbabwe's smallholder agriculture


  • Dalton, Timothy J.
  • Masters, William A.
  • Foster, Kenneth A.


In this study, we estimate production costs and elasticities of factor substitution for Zimbabwean smallholders, using a dual (cost function) approach with detailed data on prices paid and received by each of 65 farms across six survey sites over two years. We find that 95% of observed farm choices are consistent with optimal input use, and that there is moderate substitutability between labor, biochemical inputs and capital. These results indicate that farmers can substitute between factors as relative prices change, particularly to increase labor use as the rural population grows. By stratifying our sample, we investigate the degree to which production costs differ among the socioeconomic groups, tsting for higher costs among female-headed households (who might be subject to gender discrimination), resource-poor farmers without their own draft animals (who might have less timely operations), and isolated farms far from paved roads (who might have less access to markets and information). We find significant support only for the paved-roads effect, indicating the importance of rural infrastracture in determining production costs.
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  • Dalton, Timothy J. & Masters, William A. & Foster, Kenneth A., 1997. "Production costs and input substitution in Zimbabwe's smallholder agriculture," Agricultural Economics, Blackwell, vol. 17(2-3), pages 201-209, December.
  • Handle: RePEc:eee:agecon:v:17:y:1997:i:2-3:p:201-209

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    References listed on IDEAS

    1. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
    2. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, March.
    3. Massell, Benton F. & Johnson, R.W.M., 1968. "Economics of Smallholder Farming in Rhodesia: A Cross-Section Analysis of Two Areas," Food Research Institute Studies, Stanford University, Food Research Institute.
    4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    5. Farman Ali & Ashok Parikh, 1992. "Relationships among Labor, Bullock, and Tractor Inputs in Pakistan Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 371-377.
    6. Massell, Benton F., 1967. "Farm Management in Peasant Agriculture: An Empirical Study," Food Research Institute Studies, Stanford University, Food Research Institute, issue 02.
    7. Hirofumi Uzawa, 1962. "Production Functions with Constant Elasticities of Substitution," Review of Economic Studies, Oxford University Press, vol. 29(4), pages 291-299.
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    Cited by:

    1. Phillips, J. G. & Deane, D. & Unganai, L. & Chimeli, A., 2002. "Implications of farm-level response to seasonal climate forecasts for aggregate grain production in Zimbabwe," Agricultural Systems, Elsevier, vol. 74(3), pages 351-369, December.
    2. Obare, G. A. & Omamo, S. W. & Williams, J. C., 2003. "Smallholder production structure and rural roads in Africa: the case of Nakuru District, Kenya," Agricultural Economics, Blackwell, vol. 28(3), pages 245-254, May.
    3. Regier, Gregory K & Dalton, Timothy J, 2014. "Labour savings of Roundup Ready maize: Impact on cost and input substitution for South African smallholders," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(3), August.
    4. Tara McIndoe-Calder, 2011. "Network Effects and Land Redistribution: A Natural Experiment in Zimbabwe," The Institute for International Integration Studies Discussion Paper Series iiisdp352, IIIS.
    5. Seebens, Holger, 2008. "One size fits all? Female Headed Households, Income Risk, and Access to Resources," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43609, European Association of Agricultural Economists.
    6. Maganga, Assa & Mehare, Abure & Ngoma, Kisa & Magombo, Elizabeth & Gondwe, Paul, 2011. "Determinants of smallholder farmers’ demand for purchased inputs in Lilongwe District, Malawi: evidence from Mitundu extension planning area," MPRA Paper 34590, University Library of Munich, Germany.
    7. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
    8. Olasunkanmi M. Bamiro & Adebayo M. Shittu, 2009. "Vertical integration and cost behavior in poultry industry in Ogun and Oyo States of Nigeria," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 1-15.
    9. Obare, Gideon A. & Omamo, S.W. & Williams, J.C., 2003. "Smallholder production structure and rural roads in Africa: the case of Nakuru District, Kenya," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 28(3), May.
    10. Vicente Ruiz, 2016. "Groundwater Overdraft, Electricity, and Wrong Incentives: Evidence from Mexico," Working Papers 2016.05, FAERE - French Association of Environmental and Resource Economists.

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