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Off-Farm Participation, Agricultural Production and Farmers’ Welfare in Tanzania and Uganda

Bethuel Kinuthia, Abdelkrim Araar, Laura Barasa, Stephene Maende and Faith Mariera

Working Papers PMMA from PEP-PMMA

Abstract: Panel data from the Living Standards Measurement Study-Integrated Surveys on Agriculture for Tanzania and Uganda were analyzed to investigate the impact of off-farm participation on agricultural production and farmers’ welfare. Using strategies ranging from simple least squares to a dynamic panel model, we demonstrated how each of the intermediate models, such as the random effects Tobit model, could tackle censoring bias. Our results reveal that off-farm participation had a negative impact on agricultural production in both countries, though the impact was positive on welfare for Tanzania only. Policy makers should consider the complexities surrounding the formulation of pro-agriculture and pro-welfare policies aimed at producing desirable outcomes from off-farm participation. In that effort, policies that minimize the trade-off between agricultural production and off-farm participation and which enhance positive welfare effects are vital.

Keywords: Off-farm participation; Agricultural production; Welfare; Consumption; Farmers; Sample selection; Dynamic panel model; East Africa; Tanzania; Uganda (search for similar items in EconPapers)
JEL-codes: Q10 Q12 Q14 Q15 Q16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-dev
Date: 2019
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