Stein Terje Holden

Land redistribution, tenure insecurity, and intensity of production: a study of farm households in southern Ethiopia

This study analyzes the effects of the Ethiopian land redistribution policy on perceptions of tenure security and on the use of purchased farm inputs and planting of trees among households in Southern Ethiopia. The policy appears to have caused a positive correlation between farm size and tenure insecurity in some locations, although there is a negative correlation in other sites. It had no negative effect on the probability of use or the intensity of use of purchased farm inputs, or on the probability of planting perennials. Rather, it is resource poverty that appears to undermine intensification and investment in trees. (JEL Q15)

Impacts of Low-Cost Land Certification on Investment and Productivity

New land reforms are again high on the policy agenda and low-cost, propoor reforms are being tested in poor countries. This article assesses the investment and productivity impacts of the recent low-cost land certification implemented in the Tigray region of Ethiopia, using a unique household and farm-plot-level panel data set, with data from before and up to eight years after the reform. Alternative econometric methods were used to test and control for endogeneity of certification and for unobserved household heterogeneity. Significant positive impacts were found, including effects on the maintenance of soil conservation structures, investment in trees, and land productivity. Copyright 2007, Oxford University Press.

On the measurement of risk aversion from experimental data

Attitudes towards risk are measured for households in Northern Zambia using an experimental gambling approach with real payoffs that at maximum were equal to 30% of average total annual income per capita. The results of the experiment show decreasing absolute risk aversion and increasing partial risk aversion. Determinants of risk aversion are investigated using random effects interval regression model exploiting the panel data structure of the repeated experiments. Wealth indicator variables are found to be significant, and partial relative risk aversion decreases as wealth increases. Females are found to be more risk averse than males.

Tenure Insecurity, Gender, Low-cost Land Certification and Land Rental Market Participation in Ethiopia

Abstract There is a renewed interest in whether land reforms can contribute to market development and poverty reduction in Africa. This paper assesses effects on the allocative efficiency of the land rental market of the low-cost approach to land registration and certification of restricted property rights that was implemented in Ethiopia in the late 1990s. Four rounds of a balanced household panel from 16 villages in northern Ethiopia are analysed, showing that land certification initially enhanced land rental market participation of (potential) tenant and landlord households, especially those that are headed by females.

Can-food-for-work programmes reduce vulnerability?

Food-for-work (FFW) programmes have been widely heralded as a means of providing self-targeting transfers coupled with investment in public goods. This paper reviews the changing context that has sparked such interest in FFW, the simple theory that makes it so conceptually appealing, and conceptual problems with that simple theory, all illustrated with empirical examples, primarily from east Africa. We conclude with an attempt at distilling some useful rules of thumb as to when, how and why FFW can serve effectively as short-term insurance, a longer-term rehabilitation and development intervention, or both.

Does the nonfarm economy offer pathways for upward mobility? Evidence from a panel data study in Ethiopia

Empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households’ wealth or income. This paper explores whether nonfarm employment leads to higher consumption expenditure growth in Ethiopia. We find that: (1) households’ consumption expenditure growth is positively correlated with the initial share of nonfarm income; (2) the growth elasticity of nonfarm income share is higher for wealthier households; and (3) the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital.

Peasant household modelling: Farming systems evolution and sustainability in northern Zambia

Chitemene slash-and-burn cultivation continues to be a dominating cropping system in northern Zambia even after the introduction of modern technologies such as hybrid maize and fertilizer. The rationale of farming systems evolution in northern Zambia where labour markets have been absent or highly imperfect, has been analyzed by goal programming based on the theories of Chayanov (1966) and Nakajima (1986). Carrying capacity estimation is incorporated in the models and discussed in relation to the sustainability of land use systems in the area. The major changes in agricultural technologies in northern Zambia during this century has been the introduction of cassava, maize and fertilizer technologies. Cassava has had the most significant impact since the land could support much higher population densities and since the dependence on the chitemene system no longer was critical for the survival of peasants. By switching from finger-millet to cassava as the main staple the peasants could reduce their total labour requirement to meet their basic food needs by as much as 40%. The results also show that the maize-fertilizer technology has been unable to replace the chitemene system because economic incentives to continue the system exist as long as there is suitable woodland available. Nevertheless, the introduction of the maize-fertilizer technology may have resulted in reduced chitemene cultivation. The rapid expansion of maize production in northern Zambia from the late 70s to the late 80s depended critically on the government policy of equity pricing and input subsidisation. The models predicted that the removal of fertilizer subsidies would result in a dramatic reduction in maize production.

Who Benefit from Malawi's Targeted Farm Input Subsidy Program?

Malawi has over the last 6 years embarked on a comprehensive targeted fertilizer and seed subsidy program to boost its agricultural production and to enhance household and national food security. The program aims to target coupons for purchase of subsidized fertilizers and seeds to poor rural households. This study provides evidence on the extent of leakages of coupons and fertilizers and the targeting efficiency of the program. While the program enhances food production and food security, it does not target the poor better than a program that distributes inputs randomly and corruption, and targeting errors lead to local frustration and conflicts. The same basic problems of establishing a credible population base, developing clear targeting criteria, establishing a system for beneficiary selection and targeting, leakages of coupons higher up in the system, cost-efficient import and timely distribution of the inputs, and illegal markets for coupons and fertilizers were as serious during our study (2007–2009) as during the Starter Pack program and Targeted Inputs Program (1998–2003). Corruption appears to be the elephant in the room in the negotiations between donors and the Government of Malawi about how to set higher standards such as transparency and accountability at all levels of the program.

Structural adjustment and market imperfections: a stylized village economy-wide model with non-separable farm households

Village economies and peasant households represent the main link between the economy and the environment in sub-Saharan Africa. The links from the macro level and down to the household level and further to the natural resource base are complex. It may therefore be difficult to predict the impact of macro policies and external shocks on the environment. This paper presents a typology of village economies and village economy-wide models. The framework is applied to a special case where a model is proposed and estimated to examine the impacts of external shocks, including structural adjustment policies, on cash-crop production and chitemene (shifting cultivation) in a remote Zambian village characterized by a missing (or negligible) labour market, input supply constraints, and credit rationing. Our findings indicate that structural adjustment policies, by decreasing the profitability of maize production, may encourage households to increase their chitemene production, resulting in more rapid deforestation.

Tree planting for poverty reduction in less-favoured areas of the Ethiopian highlands

This paper assesses the potential impact of planting of eucalypt trees as a strategy to reduce poverty in a less-favoured area of the highlands of Ethiopia. Results from simulations with a bio-economic model for a less-favoured case study area in the highlands are combined with survey data at community, household and plot level to assess how general the results of the bio-economic model are. Application of the bio-economic model shows clearly that land degradation, population growth, stagnant technology and drought threaten food security. Household welfare and land quality are deteriorating rapidly in the area and interventions are urgently needed to avoid human disaster. Planting of eucalypts on land unsuitable for crop production may substantially increase household incomes if market outlets for trees can be found. Tree planting will not have severe negative effects on food production or land conservation. A policy combining promotion of tree planting and conservation of cropland may achieve win-win benefits in terms of increased household incomes as well as more sustainable land-use. Analysis of survey data from the Amhara Region of Ethiopia reveals that there is a large area of land that is unsuitable for crop production located close to all-weather roads in the less-favoured areas of the region. Few trees have been planted on this type of land up to now. The past policy seems to have discouraged tree planting except on homestead plots that are more suitable for food crops.