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Farm Output, Non-Farm Income, And Commercialization In Rural Georgia

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  • Kan, Iddo
  • Kimhi, Ayal
  • Lerman, Zvi

Abstract

This article examines the decision of farmers to sell part of their farm output on the market, using data from the Republic of Georgia. A two-level empirical model is used, in which endowments and resource allocation decisions determine farm output and non-farm income, and these in turn determine market participation. We found, as expected, that farm output affects market participation positively, while non-farm income affects it negatively. Landholdings have an indirect positive effect on market participation, through its positive effect on farm output. Education has a negative effect on market participation, mainly through its positive effect on non-farm income.

Suggested Citation

  • Kan, Iddo & Kimhi, Ayal & Lerman, Zvi, 2006. "Farm Output, Non-Farm Income, And Commercialization In Rural Georgia," Discussion Papers 7179, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    • Handle: RePEc:ags:huaedp:7179
    DOI: 10.22004/ag.econ.7179
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    1. Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel D., 2004. "Rural infrastructure, transactions costs and market participation in Kenya," Journal of Development Economics, Elsevier, vol. 73(1), pages 349-367, February.
    2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    3. Gogodze, Joseph & Kan, Iddo & Kimhi, Ayal, 2005. "Development of Individual Farming in Georgia: Descriptive Analysis and Comparisons," MPRA Paper 11721, University Library of Munich, Germany.
    4. Philip Kostov & John Lingard, 2004. "Subsistence Agriculture in Transition Economies: Its Roles and Determinants," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 565-579, November.
    5. Marc F. Bellemare & Christopher B. Barrett, 2006. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 324-337.
    6. Borbala Balint & Peter Wobst, 2006. "Institutional Factors and Market Participation by Individual Farmers: The Case of Romania," Post-Communist Economies, Taylor & Francis Journals, vol. 18(1), pages 101-121.
    7. Lerman, Zvi, 2005. "The Impact Of Land Reform On Rural Household Income In Transcaucasia And Central Asia," Discussion Papers 7169, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    8. Erik Mathijs & Nivelin Noev, 2004. "Subsistence Farming in Central and Eastern Europe : Empirical Evidence from Albania, Bulgaria, Hungary, and Romania," Eastern European Economics, Taylor & Francis Journals, vol. 42(6), pages 72-89, November.
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    Cited by:

    1. Sisira S. Withanachchi & Ilia Kunchulia & Giorgi Ghambashidze & Rami Al Sidawi & Teo Urushadze & Angelika Ploeger, 2018. "Farmers’ Perception of Water Quality and Risks in the Mashavera River Basin, Georgia: Analyzing the Vulnerability of the Social-Ecological System through Community Perceptions," Sustainability, MDPI, vol. 10(9), pages 1-26, August.
    2. Tesfaye Woldeyohanes & Thomas Heckelei & Yves Surry, 2017. "Effect of off-farm income on smallholder commercialization: panel evidence from rural households in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(2), pages 207-218, March.
    3. Olale, Edward & Cranfield, John A.L., 2009. "The Role of Income Diversification, Transaction Cost and Production Risk in Fertilizer Market Participation," 2009 Conference, August 16-22, 2009, Beijing, China 49929, International Association of Agricultural Economists.
    4. Paul Kwame Nkegbe & Abdelkrim Araar & Benjamin Musah Abu & Hamdiyah Alhassan & Yazidu Ustarz & Edinam Dope Setsoafia & Shamsia Abdul-Wahab, 2022. "Nonfarm activity and market participation by farmers in Ghana," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-23, December.
    5. Gogodze, Joseph & Kan, Iddo & Kimhi, Ayal, 2007. "Land Reform And Rural Well Being In The Republic Of Georgia: 1996-2003," Discussion Papers 7168, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    6. Zhenhai Xiang & Pengfei Ban & Qifeng Yuan, 2020. "Measurement of the Income Difference of Rural Residents in Peri-Urbanized Areas and Its Influencing Factors: Evidence from Nanhai, Foshan, China," Sustainability, MDPI, vol. 12(20), pages 1-21, October.
    7. Kimhi, Ayal, 2007. "Does Land Reform In Transition Countries Increase Child Labor? Evidence From The Republic Of Georgia," Discussion Papers 7147, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    8. Paul Nkegbe & Abdelkrim Araar & Benjamin Abu & Yazidu Ustarz & Hamdiyah Alhassan & Edinam Dope Setsoafia & Shamsia Abdul-Wahab, 2018. "Rural Non-Farm Engagement and Agriculture Commercialization in Ghana: Complements or Competitors?," Working Papers PMMA 2018-07, PEP-PMMA.

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    More about this item

    Keywords

    Farm Management;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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