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The impact of credit constraints on the adoption of hybrid maize in Malawi

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  • Simtowe, Franklin
  • Zeller, Manfred
  • Diagne, Aliou

Abstract

This paper investigates the impact of credit constraints on the adoption of hybrid maize among rural households in Malawi. To address the endogenous and binary nature of the household's credit constraints status, we employ a treatment-effects model to consistently estimate the effect of credit constraints. Results reveal that after effectively correcting for endogeneity, credit constraints have a negative and significant effect on the amount of land allocated to hybrid maize. Results also show that farmers with larger land holdings allocate more land to hybrid maize. Although less likely to report credit constraints, older farmers allocate less land to hybrid maize than younger farmers. These findings suggest that there is scope for increasing the cultivation of hybrid maize in Malawi if credit is targeted at younger farmers that are credit-constrained.

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  • Simtowe, Franklin & Zeller, Manfred & Diagne, Aliou, 2009. "The impact of credit constraints on the adoption of hybrid maize in Malawi," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 90(1).
    • Handle: RePEc:ags:frraes:207797
    DOI: 10.22004/ag.econ.207797
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    2. Uzoamaka Joe-Nkamuke & Kehinde Oluseyi Olagunju & Esther Njuguna-Mungai & Kai Mausch, 2019. "Is there any gender gap in the production of legumes in Malawi? Evidence from the Oaxaca–Blinder decomposition model," Review of Agricultural, Food and Environmental Studies, Springer, vol. 100(1), pages 69-92, December.
    3. Uzoamaka Joe-Nkamuke & Kehinde Oluseyi Olagunju & Esther Njuguna-Mungai & Kai Mausch, 2019. "Is there any gender gap in the production of legumesin Malawi? Evidence from the Oaxaca–Blinderdecomposition model," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 100(1-4), pages 69-92.
    4. Salazar, Cesar & Jaime, Marcela & Pinto, Cristian & Acuna, Andres, 2019. "Interaction between crop insurance and technology adoption decisions: The case of wheat farmers in Chile," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(3), July.
    5. Wang, J. & Bi, S. & Lyu, K. & Zhang, C., 2018. "Does Formal Credit Constraint Restrain Agricultural Production?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277536, International Association of Agricultural Economists.
    6. Holden, Stein & Mangisoni, Julius, 2013. "Input subsidies and improved maize varieties in Malawi: -What can we learn from the impacts in a drought year?," CLTS Working Papers 7/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 10 Oct 2019.
    7. Porgo, Mohamed & Kuwornu, John K.M. & Zahonogo, Pam & Jatoe, John Baptist D. & Egyir, Irene S., 2018. "Credit constraints and cropland allocation decisions in rural Burkina Faso," Land Use Policy, Elsevier, vol. 70(C), pages 666-674.
    8. Christina Handschuch & Meike Wollni, 2016. "Improved production systems for traditional food crops: the case of finger millet in western Kenya," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 783-797, August.
    9. Funes, Jose E., 2018. "The role of social interaction in the adoption and geographic diffusion of an agricultural technology: The case of high-iron bean (Phaseolus vulgaris) in Rwanda," 2018 Annual Meeting, August 5-7, Washington, D.C. 273872, Agricultural and Applied Economics Association.
    10. Blanca Isabel Sánchez-Toledano & Zein Kallas & Oscar Palmeros Rojas & José M. Gil, 2018. "Determinant Factors of the Adoption of Improved Maize Seeds in Southern Mexico: A Survival Analysis Approach," Sustainability, MDPI, vol. 10(10), pages 1-22, October.
    11. Benjamin, Olatunbosun, 2012. "Improving credit allocation to sustainable agriculture in Sub-Saharan Africa: Review of bio-based economy benefits," MPRA Paper 41313, University Library of Munich, Germany.
    12. Maurice Kesonga Nsele & Jules Nkulu Mwine Fyama & Kevin Maréchal & Thomas Dogot, 2022. "Factors Influencing the Sustained Adoption of Innovative Techniques by Urban Farmers in Lubumbashi, Democratic Republic of Congo," Agriculture, MDPI, vol. 12(8), pages 1-19, August.
    13. Collins Asante-Addo & Jonathan Mockshell & Manfred Zeller & Khalid Siddig & Irene S. Egyir, 2017. "Agricultural credit provision: what really determines farmers’ participation and credit rationing?," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(2), pages 239-256, July.
    14. Benjamin, Emmanuel O. & Ola, Oreoluwa & Sauer, Johannes & Buchenrieder, Gertrud, 2021. "Interaction between agroforestry and women's land tenure security in sub-Saharan Africa: A matrilocal perspective," Forest Policy and Economics, Elsevier, vol. 133(C).
    15. Ricker-Gilbert, Jacob & Jones, Michael, 2012. "Does Access to Storage Protectant Increase Smallholder Adoption of Improved Maize Seed? Insights from Malawi," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124658, Agricultural and Applied Economics Association.
    16. Ndem Chijioke, Uteh Akaninyene, 2018. "Profitability of Improved Seed Adoption on Small Holders Maize Farmers in Abuja Nigeria," Business and Management Studies, Redfame publishing, vol. 4(4), pages 71-81, December.
    17. SANCHEZ, Blanca I. & Kallas, Zein & Gil, Jose M., 2017. "To Adopt, or Not to Adopt the Case Study of the Improved Corn Seeds in Chiapas (México)," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258130, Agricultural and Applied Economics Association.
    18. Joe-Nkamuke, Uzoamaka & Oluseyi Olagunju, Kehinde & Njuguna-Mungai, Esther & Mausch, Kai, 2019. "Is there any gender gap in the production of legumes in Malawi? Evidence from the Oaxaca–Blinder decomposition model," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 100(1-4), November.
    19. Henry Kankwamba & Mariam Kadzamira & Karl Pauw, 2018. "How diversified is cropping in Malawi? Patterns, determinants and policy implications," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(2), pages 323-338, April.
    20. Ruzzante, Sacha & Labarta, Ricardo & Bilton, Amy, 2021. "Adoption of agricultural technology in the developing world: A meta-analysis of the empirical literature," World Development, Elsevier, vol. 146(C).

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    More about this item

    Keywords

    Crop Production/Industries;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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