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

Author

Listed:
  • Simtowe, Franklin
  • Zeller, Manfred
  • Diagne, Aliou

Abstract

The paper investigates the impact of credit constraints on the adoption of hybrid maize among rural households in Malawi using the treatment-effects model. Results reveal that after effectively correcting for endogeneity, credit constraints have a reducing effect on the size of land allocated to hybrid maize. Farmers with larger land holdings allocate more land to hybrid maize while older farmers allocate less land to hybrid maize. 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.

Suggested Citation

  • Simtowe, Franklin & Zeller, Manfred & Diagne, Aliou, 2009. "The Impact of credit constraints on the adoption of hybrid maize in Malawi," 2009 Conference, August 16-22, 2009, Beijing, China 51627, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51627
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    File URL: http://purl.umn.edu/51627
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    References listed on IDEAS

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    1. Diagne, Aliou & Zeller, Manfred & Sharma, Manohar, 2000. "Empirical measurements of households' access to credit and credit constraints in developing countries," FCND briefs 90, International Food Policy Research Institute (IFPRI).
    2. Zeldes, Stephen P, 1989. "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 305-346, April.
    3. 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.
    4. 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.
    5. Smale, Melinda & Phiri, Alexander, 1998. "Institutional Change and Discontinuities in Farmers' Use of Hybrid Maize Seed and Fertilizer in Malawi: Findings from the 1996-97 CIMMYT/ MoALD Survey," Economics Working Papers 7674, CIMMYT: International Maize and Wheat Improvement Center.
    6. 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.
    7. Fernandez-Cornejo, Jorge & McBride, William D., 2002. "Adoption Of Bioengineered Crops," Agricultural Economics Reports 33957, United States Department of Agriculture, Economic Research Service.
    8. Diagne, Aliou & Zeller, Manfred, 2001. "Access to credit and its impact on welfare in Malawi:," Research reports 116, International Food Policy Research Institute (IFPRI).
    9. Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 219-234.
    10. repec:cdl:agrebk:836256 is not listed on IDEAS
    11. Smale, Melinda, 1995. ""Maize is life": Malawi's delayed Green Revolution," World Development, Elsevier, vol. 23(5), pages 819-831, May.
    12. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    13. Eswaran, Mukesh & Kotwal, Ashok, 1990. "Implications of Credit Constraints for Risk Behaviour in Less Developed Economies," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 473-482, April.
    14. 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 255-298, January.
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    Citations

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    Cited by:

    1. Holden, Stein & Mangisoni, Julius, 2013. "Input subsidies and improved maize varieties in Malawi: -What can we learn from the impacts in a drought year?," CLTS Working Papers 7/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    2. Christina Handschuch & Meike Wollni, 2016. "Improved production systems for traditional food crops: the case of finger millet in western Kenya," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 783-797, August.
    3. Benjamin, Olatunbosun, 2012. "Improving credit allocation to sustainable agriculture in Sub-Saharan Africa: Review of bio-based economy benefits," MPRA Paper 41313, University Library of Munich, Germany.
    4. Christina Handschuch & Meike Wollni, 2013. "Improved production systems for traditional food crops: The case of finger millet in Western Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 141, Courant Research Centre PEG.
    5. Collins Asante-Addo & Jonathan Mockshell & Manfred Zeller & Khalid Siddig & Irene S. Egyir, 2017. "Agricultural credit provision: what really determines farmers’ participation and credit rationing?," Agricultural Finance Review, Emerald Group Publishing, vol. 77(2), pages 239-256, July.
    6. Ricker-Gilbert, Jacob & Jones, Michael, 2012. "Does Access to Storage Protectant Increase Smallholder Adoption of Improved Maize Seed? Insights from Malawi," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124658, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    credit constraints; hybrid maize; adoption; treatment- effect; endogenous; Malawi; Agribusiness; Agricultural and Food Policy; Agricultural Finance; Consumer/Household Economics;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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