Fertilizer Use, Risk, and Off-Farm Labor Markets in the Semi-Arid Tropics of India
A two-period model is developed in which a risk-averse farmer uses off-farm labor to smooth consumption, leading to greater use of fertilizer. Fertilizer demand is shown to increase with the depth of the off-farm labor market. Controlling for exogenous weather risk, farmers use more fertilizer the lower the unemployment rate and the higher the share of nonagricultural work in total off-farm labor. The results suggest that off-farm labor markets and own-farm production may be complementary in risky production environments, so that policies which promote the depth of the off-farm labor market in low-income areas may also bolster farm productivity. Copyright 2003, Oxford University Press.
Volume (Year): 85 (2003)
Issue (Month): 2 ()
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