Search

In the last couple of decades, agriculture has faced a number of critical challenges. To cope with these challenges, agriculture and the food sector have gone through continuous social, structural and livelihood transitions. Understanding the economics of agricultural production with the dynamic natural, social and policy environment is an important topic for discussion and key concern for development policy. This dissertation presents empirical investigations on the economics of production in agriculture by giving particular emphasis to employment and labor conditions, climate change and risk management, productivity and welfare of farms. In den letzten Jahrzehnten war die Landwirtschaft verschiedensten Herausforderungen ausgesetzt. Um diesen Herausforderungen zu begegnen, unterliegen die Landwirtschaft wie auch der gesamte Lebensmittelsektor einem stetigen sozialen, strukturellen und wirtschaftlichen Wandel. Deshalb ist das Verständnis über die Ökonomie der landwirtschaftlichen Produktion mit ihrem dynamischen natürlichen, sozialen und politischen Umfeld ein wichtiges Diskussionsthema und ein Schlüsselanliegen der Entwicklungspolitik. Diese Dissertation präsentiert empirische Untersuchungen zur Ökonomie der landwirtschaftlichen Produktion mit Fokus auf Beschäftigung und Arbeitsbedingungen, Klimawandel und Risikomanagement, Produktivität und Wohlfahrt landwirtschaftlicher Betriebe.

This paper investigates the role of farm diversification for dietary diversity of households in smallholder agriculture. We use the Living Standards Measurement Study – Integrated Surveys on Agriculture (LSMS-ISA) dataset of the World Bank from Ethiopia and Tanzania. The results of the study show that farm diversification contributes to dietary diversity of farm households. Furthermore, we show that the effects of farm diversification and proportion of purchased food on the dietary diversity of the household significantly varies across families who are in food poverty, and the food secure families. Rural development efforts towards diversified farming systems can contribute to improve the food security and dietary diversity of farm households, especially if targeted towards nutritionally rich food production schemes.

This paper investigates the implication of the cost of risk exposure on farm diversification, farm insurance premium payment and investment behavior in agriculture using an extensive Farm Accountancy Data Network (FADN) panel data of arable farms and weather data from 1989 to 2009 from France and Germany. For this purpose, we develop a two stage empirical model. First, we estimate the full profit moments distribution using the major inputs of production with quadratic function. Following this, we estimate the major responses of farmers for exposure to risk (farm diversification, investment decisions and purchase of insurance) via three-stage least squares (3SLS) estimation procedure. Our empirical analysis confirms that risk exposure measured with variance and skewness of farm profit can significantly influence the level of farm diversification, insurance premium payment and farm investment and disinvestment in arable farms in both countries. As these strategies seem not to be completely substitutable, this evidence can be used to support the discussion of improving the availability of market based instruments to strengthen the adaptive capacity of farms in the developing world. We do find an evidence that farms can see disinvestment as a response to extreme shock and risk exposure at least in a short run. Improving the adaptive capacity of farms might not only secure them pervasive impacts of risk exposure, but also can influence their investment and disinvestment behavior.

This paper explores the implication of the rural non-farm employment and waged agricultural employment for income and risk mitigation of agricultural households in Ethiopia. We use a nationally representative panel dataset, and employ endogenous switching mixed multinomial logit model. After we control the selection bias that can arise from employment selection in rural households stemming both from observed and unobserved characteristics, we do find an evidence that the non-farm sector improves the income of the agricultural households, and serve as risk mitigation tool in rural Ethiopia. Combining the non-farm sector with hiring labor for agricultural activities at times of labor shortage increases the variance and contributes to positive skewness of income. Finally, we suggest that the rural non-farm sector could serve as a key development pathway for improving livelihood in the predominantly smallholder production system in Ethiopia.

Using a moment based approach, introduced by Antle for producers’ risk behavior elicitation, we develop an empirical model to evaluate the implication of risk preferences on farm level diversification. For the purpose, we use a household level panel data of years 2004 and 2009 from Ethiopia. The estimation is done in two stages; the first one for the elicitation of risk aversion behavior of farm households and the second one, for the inclusion of the first estimate on the factors that determine the level of on-farm diversification. To control for endogeneity problem in the estimation of diversification equation, we use efficient two stage least squares technique. We find that farmers with higher level of relative risk premium will more likely opt for more on-farm diversification. The engagement of farm households to off and non-farm income generating activities could likely reduce the on-farm diversification level. These could be due to the fact that households with income from off and non-farm activities use this income as a safety net and go for specialized farms.

This paper systematically investigates the role of the quality of rural employment on agricultural production efficiency in developing countries, taking Ethiopia and Tanzania as cases. We use data of the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) collected in 2011. In the analysis, an output-oriented distance function approach that accounts for different technological, demographic, socio-economic, institutional and quality of rural employment indicators is applied. The findings of the analysis support the idea that the quality of rural employment could be seen as an effective element of rural development policies and strategies in sub-Saharan Africa. Better integration of quality rural employment aspects (creation of jobs, improving quality of jobs, promoting public employment programs etc.) contribute to improve technical efficiency in agricultural production.

Using a moment based approach, introduced by Antle for producers’ risk behavior elicitation, we develop an empirical model to evaluate the implication of risk preferences on farm portfolio decisions. With a comprehensive household level panel data of rounds of 2004 and 2009, we estimate risk aversion behavior of farm households in uncertain climate and market imperfections. To solve the problem of endogeneity, the risk parameter is instrumented in a two stage maximum likelihood estimation technique, and used as a determinant of the level of farm level diversification. We find that farmers with higher level of relative risk premium will more likely opt for diversified farms. The engagement of farm households to off and non-farm income generating activities could likely reduce the on-farm diversification level. On-farm diversification and engagement in off-farm and non-farm activities can be considered as substitutable risk mitigation strategies