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Smallholder Supply Response to Marketing Board Activities in a Dual Channel Marketing System: The Case of Zambia

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  • Nicole M. Mason
  • Thomas S. Jayne
  • Robert J. Myers

Abstract

type="main" xml:id="jage12066-abs-0001"> In recent years, parastatal grain marketing boards have re-emerged as important elements of grain markets in eastern and southern Africa, yet little is known about how farmers are responding to their scaled up activities. This article develops a conceptual model of farmers’ production decisions in the context of dual output marketing channels (government and private sector) when output prices at harvest time and the availability of one of the marketing channels are unknown at planting time. It then applies the model to the case of Zambia and uses nationally representative household-level panel survey data to estimate the effects of the Food Reserve Agency (FRA), the government parastatal maize marketing board, on smallholder crop production and fallow land. The FRA buys maize from smallholders at a pan-territorial price that typically exceeds market prices in major maize producing areas. Results suggest that increases in the farmgate FRA maize price raise farmer maize price expectations, which induces a supply response. Smallholders respond to an increase in the FRA price by extensifying their maize production. On average, a 1% increase in the FRA price is associated with 0.06% increases in smallholders’ maize area planted and quantity harvested. There is also some evidence that farmers reduce the area of land under fallow in response to FRA incentives but there is no evidence of reductions in the area planted to other crops.

Suggested Citation

  • Nicole M. Mason & Thomas S. Jayne & Robert J. Myers, 2015. "Smallholder Supply Response to Marketing Board Activities in a Dual Channel Marketing System: The Case of Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(1), pages 36-65, February.
    • Handle: RePEc:bla:jageco:v:66:y:2015:i:1:p:36-65
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    File URL: http://hdl.handle.net/10.1111/jage.2014.66.issue-1
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    Cited by:

    1. Ricker-Gilbert, Jacob & Mason, Nicole & Chamberlin, Jordan, 2016. "What Is Driving Farmland Rental Prices In Sub-Saharan Africa? Evidence From Malawi," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235819, Agricultural and Applied Economics Association.
    2. Saenz, Mariana & Thompson, Eric, 2017. "Gender and Policy Roles in Farm Household Diversification in Zambia," World Development, Elsevier, vol. 89(C), pages 152-169.
    3. Winnie Fung & Lenis Saweda O. Liverpool‐Tasie & Nicole M. Mason & Ruth Uwaifo Oyelere, 2020. "Do crop purchase programs improve smallholder welfare? The case of Zambia's Food Reserve Agency," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 519-533, July.
    4. Hazrana, Jaweriah & Mishra, Ashok K., 2024. "Food and Nutrition Security in Developing Economies: An Intra-household and Gender Based Assessment," 2024 Annual Meeting, July 28-30, New Orleans, LA 345099, Agricultural and Applied Economics Association.
    5. Kristi Mahrt & Gibson Masumbu, 2015. "Estimating multidimensional poverty in Zambia," WIDER Working Paper Series 137, World Institute for Development Economic Research (UNU-WIDER).
    6. Hinkel, Niklas, 2022. "More Biofuel = More Food?," EWI Working Papers 2022-2, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    7. Channa, Hira & Ricker-Gilbert, Jacob & Feleke, Shiferaw & Abdoulaye, Tahirou, 2022. "Overcoming smallholder farmers’ post-harvest constraints through harvest loans and storage technology: Insights from a randomized controlled trial in Tanzania," Journal of Development Economics, Elsevier, vol. 157(C).
    8. Olson, David W. & Mason, Nicole M., 2017. "Maize Marketing Boards and Sustainable Intensification: Panel Survey Evidence from Kenya," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258093, Agricultural and Applied Economics Association.
    9. Jacob Ricker-Gilbert & T. S. Jayne, 2017. "Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 70-97, February.
    10. Hinkel, Niklas, 2019. "Agricultural Liming in Zambia: Potential Effects on Welfare," EWI Working Papers 2019-6, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    11. Relwendé A. Nikiema & Sakiko Shiratori & Jules Rafalimanantsoa & Ryosuke Ozaki & Takeshi Sakurai, 2023. "How are higher rice yields associated with dietary outcomes of smallholder farm households of Madagascar?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(3), pages 823-838, June.
    12. David J. Hemming & Ephraim W. Chirwa & Andrew Dorward & Holly J. Ruffhead & Rachel Hill & Janice Osborn & Laurenz Langer & Luke Harman & Hiro Asaoka & Chris Coffey & Daniel Phillips, 2018. "Agricultural input subsidies for improving productivity, farm income, consumer welfare and wider growth in low‐ and lower‐middle‐income countries: a systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 14(1), pages 1-153.
    13. Melkani, Aakanksha & Mason, Nicole & Mather, David & Chisanga, Brian & Jayne, Thom, 2021. "Smallholder Market Participation and Choice of Marketing Channel in the Presence of Liquidity Constraints: Evidence from Zambian Maize Markets," 2021 Conference, August 17-31, 2021, Virtual 315273, International Association of Agricultural Economists.
    14. Mason, Nicole M. & Tembo, Solomon T., 2014. "Do input subsidies reduce poverty among smallholder farm households? Evidence from Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170617, Agricultural and Applied Economics Association.
    15. Villacis, Alexis H. & Kopp, Thomas & Mishra, Ashok K., 2024. "Agricultural marketing channels and market prices: Evidence from high-value crop producers in India," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1308-1321.
    16. repec:ags:aaea22:335470 is not listed on IDEAS
    17. Kristi Mahrt & Gibson Masumbu, 2015. "Estimating multidimensional poverty in Zambia," WIDER Working Paper Series wp-2015-137, World Institute for Development Economic Research (UNU-WIDER).
    18. Zhou Yujun & Baylis Kathy, 2020. "Effects of Stockholding Policy on Maize Prices: Evidence from Zambia," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 18(1), pages 1-11, January.
    19. Nicole M. Mason & Ayala Wineman & Solomon T. Tembo, 2020. "Reducing poverty by ‘ignoring the experts’? Evidence on input subsidies in Zambia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1157-1172, October.

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