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The impact of credit constraints on the adoption of hybrid maize in Malawi

  • Franklin Simtowe

    ()

    (International Crops Research Institute for the Semi Arid Tropics ICRISAT – Nairobi, PO BOX 39063, Nairobi, Kenya)

  • Manfred Zeller

    (University of Hohenheim, Institute of Agricultural Economics and Social Sciences in the Tropics and Subtropics, Germany)

  • Aliou Diagne

    (Africa Rice Centre, Cotonou, Benin)

This paper investigates the impact of credit constraints on the adoption of hybrid maize among rural households in Malawi. To address the endogenous and binary nature of the household's credit constraints status, we employ a treatment-effects model to consistently estimate the effect of credit constraints. Results reveal that after effectively correcting for endogeneity, credit constraints have a negative and significant effect on the amount of land allocated to hybrid maize. Results also show that farmers with larger land holdings allocate more land to hybrid maize. Although less likely to report credit constraints, older farmers allocate less land to hybrid maize than younger farmers. These findings suggest that there is scope for increasing the cultivation of hybrid maize in Malawi if credit is targeted at younger farmers that are credit-constrained.

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Article provided by INRA Department of Economics in its journal Review of Agricultural and Environmental Studies.

Volume (Year): 90 (2009)
Issue (Month): 1 ()
Pages: 5-22

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Handle: RePEc:rae:jourae:v:90:y:2009:i:1:p:5-22
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  1. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
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  11. Yasuyuki SAWADA & Kensuke KUBO & Nobuhiko FUWA & Seiro ITO & Takashi KUROSAKI, 2006. "On The Mother And Child Labor Nexus Under Credit Constraints: Findings From Rural India," The Developing Economies, Institute of Developing Economies, vol. 44(4), pages 465-499.
  12. Zeller, Manfred & Diagne, Aliou & Mataya, Charles, 1998. "Market access by smallholder farmers in Malawi: implications for technology adoption, agricultural productivity and crop income," Agricultural Economics, Blackwell, vol. 19(1-2), pages 219-229, September.
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  15. Zeller, Manfred & Diagne, Aliou & Mataya, Charles, 1998. "Market access by smallholder farmers in Malawi: implications for technology adoption, agricultural productivity and crop income," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
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