Off-Farm Participation, Agricultural Production and Farmers’ Welfare in Tanzania and Uganda

29 Pages Posted: 1 Mar 2019

See all articles by Bethuel Kinuthia

Bethuel Kinuthia

University of Nairobi

Abdelkrim Araar

Université Laval - Département d'Économique

Laura Nelima Lalampaa

University of Nairobi - School of Economics

Stephene Maende

University of Nairobi

Faith Mariera

University of Nairobi

Date Written: February 28, 2019

Abstract

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

Suggested Citation

Kinuthia, Bethuel and Araar, Abdelkrim and Lalampaa, Laura Nelima and Maende, Stephene and Mariera, Faith, Off-Farm Participation, Agricultural Production and Farmers’ Welfare in Tanzania and Uganda (February 28, 2019). Partnership for Economic Policy Working Paper No. 2019-01. Available at SSRN: https://ssrn.com/abstract=3344558 or http://dx.doi.org/10.2139/ssrn.3344558

Bethuel Kinuthia

University of Nairobi

Abdelkrim Araar

Université Laval - Département d'Économique ( email )

CREFA
Ste-Foy, Quebec 179Que G1K
Canada

Laura Nelima Lalampaa (Contact Author)

University of Nairobi - School of Economics ( email )

Science Theatre, University Way
Nairobi
Kenya

Stephene Maende

University of Nairobi ( email )

Nairobi
Kenya

Faith Mariera

University of Nairobi ( email )

Nairobi
Kenya

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