Zambian smallholder behavioral responses to Food Reserve Agency activities

Type Working Paper
Title Zambian smallholder behavioral responses to Food Reserve Agency activities
Publication (Day/Month/Year) 2011
In this paper, we use nationally-representative household-level panel survey data from Zambia to estimate the marginal effects of the FRA’s maize purchase price and quantities purchased on smallholder behavior, while controlling for the effects of the Government of the Republic of Zambia (GRZ) fertilizer subsidy programs and other factors. The panel data cover the 1999/2000, 2002/03, and 2006/07 agricultural seasons, and therefore capture years before and during the recent scaling-up of the FRA’s activities. The smallholder behavioral responses examined are fertilizer demand (kilogram (kg) of fertilizer applied per hectare (ha) of maize) and crop output supply (total, maize, and non-maize area planted, crop output per hectare, and crop output). The empirical results point to three key findings. First, an increase in the volume of maize purchased by the FRA in a household’s district in previous years or an increase in the effective FRA maize price faced by the household at the previous harvest has a positive effect on the household’s expected maize price at the next harvest. Second, an increase in the expected maize price has a positive effect on total and maize area planted, a negative effect on maize yields, and no statistically significant effect on the intensity of fertilizer use on maize, non-maize area planted, total and non-maize output per hectare, and total, maize, and non-maize output. Third, the first- and second-stage results combined show that for 2006/07, increases in past FRA district-level maize purchases and in the lagged effective FRA price are associated with household-level increases in total and maize area planted, a decrease in maize yield, and no significant change in maize quantity harvested, total crop output, or the other dimensions of smallholder behavior examined.

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