Adam M. Komarek

Farmer responses to changing risk aversion, enterprise variability and resource endowments

The focus of this article is on assessing how risk aversion, enterprise variability and resource endowments affect farm land-use decisions and economic returns. A theoretical model of a two-enterprise, two-constraint farm is developed, and then, an empirical illustration for an Australian farm is provided. The methodology used builds on previous expected mean-variance (EV) models by incorporating land and budget constraints. The Kuhn–Tucker conditions of the EV model are examined to highlight that changes in resource endowments have larger effects on economic returns, than do changes in risk aversion or enterprise gross margin variability. It was also found that combinations of enterprise mixes that do not use all available resources can produce higher economic returns, relative to some enterprise mixes that use all available resources.

Income implications of political capital and agricultural land use in western China

Purpose - The purpose of this paper is to explore the expansion of agricultural production into marginal lands, also known as “wasteland,” and examine the association between political capital, household income, and using additional marginal lands for agriculture in the Xinjiang Uyghur Autonomous Region of western China. Design/methodology/approach - The paper uses exploratory data analyses methods, including descriptive statistics, graphical analysis, econometrics and propensity score matching, and data from a 2008 survey of 342 households in Awat County of Aksu Prefecture to explore the role of political capital in an agricultural household setting. Findings - Preliminary results suggest that wasteland usage has a positive association with income, and that household political capital, in the form of Communist Party membership or being a village cadre, correlates with wasteland usage because it improves access to irrigation water. Originality/value - A constant topic of debate in China is the role of political capital in influencing livelihoods. The authors aim to add modest insights into this debate and provide a starting point to foster additional debates regarding the role of political capital, rural livelihoods, and natural resource usage.

Improving the use of available feed resources to overcome sheep feeding deficits in western China

Socioeconomic and agro-ecological circumstances often compel smallholder livestock farmers in the developing world to maintain livestock over winter, and this can incur production penalties due to insufficient feed quality and availability. Recent policy efforts in western China have attempted to address this issue through the promotion of lucerne production to support growing livestock numbers with its high nitrogen content, however lucerne is underutilised by farmers and rarely maintained beyond harvest. The potential benefits to production of storing enough lucerne to meet the minimum nitrogen requirements of rumen function during the winter deficit were explored in an experiment in Qingyang Prefecture, Gansu Province, P.R. China. Tan weaner sheep (mean weight 15.4 kg) were fed corn straw, corn grain and lucerne hay in respective ratios of 80 : 20 : 0 [metabolisable energy (ME) = 7.4 MJ/kg DM, crude protein = 40 g/kg DM; ‘R1’] or 55 : 20 : 25 (ME = 8.2 MJ/kg DM, crude protein = 65 g/kg DM; ‘R2’). Rations were offered daily in a constant quantity that supplied ~80% maintenance energy requirements at the start of the experiment. Sheep fed R2 retained 0.7 kg more on average than those fed R1 (P 0.05). The results indicate that the capacity for underfed Tan weaner sheep to absorb energy from low protein rations typical of winter rapidly degrades and that the lucerne hay in the diet prevented this decline. Furthermore, these findings demonstrate that conserving lucerne for inclusion in winter rations is a potential strategy for smallholder farmers to maintain the digestive efficiency of Tan sheep during sustained underfeeding contributing to greater retention of liveweight on restricted diets.

Growth, Globalization and Upgrading of the Chinese Cashmere Industry

Three decades of double-digit export-oriented growth have expanded China’s position in multiple sectors of the global economy. China’s vast manufacturing base and consumer market continues to expand, and Chinese companies have become increasingly pro-active in promoting products and sourcing inputs overseas (Schuler-Zhou and Schuller 2007). Despite the growth and internationalization, however, China’s export sector is still based on the labour-intensive manufacture of low-value products and China is seeking to upgrade its economy by building international competitiveness in higher-value activities (OECD, 2007).

The impact of changing marketing conditions on Ugandan banana farmers

Purpose - Low productivity and the prevalence of marketing and demand constraints are all interrelated problems for banana growers in East Africa. The purpose of this paper is to examine how different marketing policies can alter the incomes of banana-growing households in the Ntungamo district of Uganda. Design/methodology/approach - A partial equilibrium model and a trader profit-maximisation model are used to analyse changes in banana market equilibrium conditions, marketing costs and market competitiveness. Findings - The results indicate that increasing supply relative to demand reduces grower returns. It appears that reducing market power and lowering middlemen marketing costs may lead to higher grower returns. Policies facilitating lower marketing costs for traders are proposed in conjunction with strategies that promote banana processing. Originality/value - Drawing on both primary and secondary data, this paper examines how increasing demand and reducing marketing costs impacts on banana-grower returns. Furthermore, sources of price movements in the Ugandan banana industry are assessed.

Trade-offs and synergies between yield, labor, profit, and risk in Malawian maize-based cropping systems

Land degradation, population growth, and chronic poverty in Eastern and Southern Africa challenge the sustainability of livelihoods for smallholder farmers. These farmers often manage soils depleted of nutrients, apply limited amounts of mineral fertilizer, and take decisions about their cropping systems that involve multiple trade-offs. The rotation of cereals with legumes bears agronomic and ecological merit; however, the socio-economic implications of the cereal-legume rotation require a deeper understanding. This study explores the yield, labor, profit, and risk implications of different legume and mineral fertilizer practices in maize-based cropping systems in central Malawi. Our method involves coupling crop modeling and an agricultural household survey with a socio-economic analysis. We use a process-based cropping systems model to simulate the yield effects of integrating legumes into maize monocultures and applying mineral fertilizer over multiple seasons. We combine the simulated yields with socio-economic data from an agricultural household survey to calculate indicators of cropping-system performance. Our results show that a maize-groundnut rotation increases average economic profits by 75% compared with maize monoculture that uses more mineral fertilizer than in the rotation. The maize-groundnut rotation increases the stability of profits, reduces the likelihood of negative profits, and increases risk-adjusted profits. In contrast, the maize-groundnut rotation has a 54% lower average caloric yield and uses more labor than the maize monoculture with mineral fertilization. By comparing labor requirements with labor supply at the household scale, we show for the first time that the additional labor requirements of the maize-groundnut rotation can increase the likelihood of experiencing a labor shortage, if this rotation is undertaken by farm households in central Malawi. We demonstrate that risk and labor factors can be important when examining trade-offs among alternative cropping systems.

The interplay of production commercialisation and specialisation : an empirical study on Chinese smallholders

Purpose - The purpose of this paper is to explore the endogenous relationship between production specialisation and market commercialisation with an empirical study of farmers in Northwest China. Design/methodology/approach - The three-stage least squares were used to address simultaneity and over-identification problems in comparison with two-stage least squares (2SLS). The Durbin-Wu-Hausman test was employed to identify the endogeneity of the commercialisation and specialisation variables. The validity, relevance, and strength of the instruments were tested using the Stock-Yogo weak instrument diagnostics test. Findings - A two-way interrelationship between specialisation and commercialisation were confirmed, and suggest that farmers’ decisions on farm commercialisation and production specialisation are actually separate and interacting. Social implications - By demonstrating that a virtuous cycle exists between agricultural commercialisation and on-farm specialisation, policies can be formulated to complement these two effects that may help increase small holders’ income. Farmers’ market participation can be indirectly improved by combining market improvement and risk management tools to encourage production specialisation. Originality/value - The insights of this study cast further light onto the farm market participation theory by emphasising that higher asset endowments enable small farmers to specialise in production with comparative advantage.

Variation in feed utilisation by sheep undergoing compensatory growth following underfeeding with and without additional dietary nitrogen in western China

Small mixed farming systems in developing economies often rely on compensatory growth to recover livestock weight lost during seasonal feed shortages; however, deficit feed management may continue to affect the capacity of livestock to efficiently use feeds even after adequate feeding has resumed. Accordingly, we compared the difference in liveweight gain and feed utilisation over time in Tan weaner sheep in western China, during a period of ad libitum compensatory feeding after alternative feed deficit scenarios. During the feed deficit period, sheep were offered, at 80% maintenance requirements, corn straw, corn grain and lucerne hay in a respective ratio of either 80 : 20 : 0 (S1 ration: metabolisable energy = 7 MJ/kg DM, crude protein = 40 g/kg DM) or 55 : 20 : 25 (S2 ration: metabolisable energy = 8 MJ/kg DM, crude protein = 65 g/kg DM) for 20 days. All sheep were then offered an ad libitum supply of the S2 ration for a further 20 days, during which DM digestibility (DMD), energy intake and liveweight was measured and compared at 5-day intervals. Results indicated that sheep previously fed the S1 ration were not able to digest as much of the ad libitum S2 ration as those previously fed the S2 ration, experiencing significantly lower DMD, energy intake and average daily weight gain. The difference in the effect of the two restrictive feeding treatments on the digestibility of the ad libitum S2 ration gradually decreased over time, indicative of a recovery adaptation during ad libitum feeding period. The rate of DMD recovery post-realimentation was greater in the S1 sheep, likely due to their significantly lower DMD values immediately following underfeeding. We concluded that the comparatively higher nutritive value of the S2 ration sustained rumen digestive function throughout the restrictive feeding period, permitting sheep to commence re-feeding under conditions that are more favourable. Additionally, it is evident that reliance on livestock winter rations typical in western China, as expressed by the S1 ration, degraded ruminant digestive conditions to such an extent that feed was used with reduced efficiency even after being supplied in adequate quantities.

Structural change and agricultural diversification since China’s reforms

Structural change is considered the major engine in fostering a country’s growth. In the agricultural sector, diversification is the commonly used development strategy to increase rural sector’s flexibility, and to respond to improving technologies and market conditions. This study examined agricultural development and transformation during China’s socio-economic reforms. In particular, it empirically investigated whether the change of China’s agricultural structure is consistent with structural change theory and observed outcomes from other countries. The degree of agricultural diversification was quantitatively measured at a regional scale using the Herfindahl index. An underdeveloped province in northwest China was studied to provide insights into the interaction among structural change, agricultural diversification, and implemented development policies. Aggregate-level analyses suggest that China’s agricultural transformation pattern is consistent with those of other developing countries. A specific provincial-level analysis shows that environmentally and economically disadvantaged regions are slower to diversify their economy than better endorsed regions.