Smallholder participation in vegetable exports and age‐disaggregated labor allocation in Northern Tanzania

Abstract

Modern agricultural supply chains have been playing an increasingly important role in developing countries and have had significant effects on rural labor markets. This article analyses the effects of smallholder farmer participation in export vegetable supply chains in Northern Tanzania on both household hired labor demand and off-farm labor supply, using an age-disaggregated approach. In our sample, neither separability nor exogeneity of smallholder farmer participation in export supply chains can be rejected. Hence, we apply lognormal double-hurdle models and find that participation in export supply chains positively affects households' decision to hire labor from all age groups. We also find that it increases the unconditional overall level of hired labor demand, while the age-disaggregated analysis shows that these effects mostly benefit rural youth. However, our sample does not allow us to establish statistically significant evidence of an effect on household off-farm labor supply although the point estimates point to nonnegligible positive effect sizes.JEL classifications: I31, J43, O12, Q12

Participation in contract farming and farm performance: Insights from cashew farmers in Ghana

“…This finding is in line with Benali et al. (), who showed for vegetable farmers in Tanzania that participation in modern supply chains increases the likelihood to hire labor.…”

“…While Bellemare () found a significantly negative effect of participation in CF on income from nonfarm businesses of smallholder farmers in Madagascar, our findings are in line with Benali et al. () who did not find a statistically significant effect for vegetable farmers in Tanzania.…”

“…The impacts on labor productivity and price margins can be attributed to efficient use of labor associated with the use of more hired labor by contract farmers and guaranteed prices, respectively. This finding is in line with Benali et al (2018), who showed for vegetable farmers in Tanzania that participation in modern supply chains increases the likelihood to hire labor.…”

“…Very few studies have extended their analysis on how factors like output prices and labor inputs contribute to the improvement of smallholders welfare through CF (Bellemare, 2018;Benali, Brümmer, & Afari-Sefa, 2018;Mishra, Kumar, Joshi, & D'Souza, 2018a). Participation in CF generally evolves in response to market imperfections particularly that of labor inputs due to moral hazard and high monitoring costs in developing countries (Casaburi, Kremer, & Mullainathan, 2016).…”

Global and local food value chains in Africa: A review

“…Agrifood export production in developing countries and global food value chains (GVC) are expanding rapidly. Agricultural Economics has published a large body of literature on GVC and the implications for rural development in low‐ and middle‐income countries (eg, Benali, Bruemmer, & Afari‐Sefa, ; Diaz‐Bonilla & Reca, ; Harou, Walker, & Barrett, ; Maertens, ; Minten, Randrianarison, & Swinnen, ; Reardon & Barrett, ; Schipmann & Qaim, ; Swinnen & Maertens, ). In general, the expansion of GVC, especially for high‐value products, such as horticulture produce, is seen as a propoor development strategy (Govereh & Jayne, ; Maertens & Swinnen, ; Van den Broeck, Swinnen, & Maertens, ).…”