Off-Farm Participation, Agricultural Production and Farmers’ Welfare in Tanzania and Uganda
29 Pages Posted: 1 Mar 2019
Date Written: February 28, 2019
Panel data from the Living Standards Measurement Study-Integrated Surveys on Agriculture for Tanzania and Uganda were analyzed to investigate the impact of off-farm participation on agricultural production and farmers’ welfare. Using strategies ranging from simple least squares to a dynamic panel model, we demonstrated how each of the intermediate models, such as the random effects Tobit model, could tackle censoring bias. Our results reveal that off-farm participation had a negative impact on agricultural production in both countries, though the impact was positive on welfare for Tanzania only. Policy makers should consider the complexities surrounding the formulation of pro-agriculture and pro-welfare policies aimed at producing desirable outcomes from off-farm participation. In that effort, policies that minimize the trade-off between agricultural production and off-farm participation and which enhance positive welfare effects are vital.
Keywords: Off-farm participation, Agricultural production, Welfare, Consumption, Farmers, Sample selection, Dynamic panel model, East Africa, Tanzania, Uganda
JEL Classification: Q10, Q12, Q14, Q15, Q16
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