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Interlinked credit and farm intensification: evidence from Kenya
Author(s) -
Jayne T. S.,
Yamano Takashi,
Nyoro James
Publication year - 2004
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2004.tb00258.x
Subject(s) - cash crop , endogeneity , cropping , hectare , agricultural economics , instrumental variable , panel data , business , cash , economics , productivity , survey data collection , agricultural science , agriculture , finance , production (economics) , economic growth , microeconomics , geography , statistics , environmental science , mathematics , archaeology , econometrics
This paper addresses the potential for interlinked credit/input/output marketing arrangements for particular cash crops to promote food crop intensification. Using panel survey data from Kenya, we estimate a household fixed‐effects model of fertiliser use per hectare of food crops, using an instrumental variables approach for addressing the endogeneity of participation in interlinked credit arrangements. Results indicate that households engaging in interlinked marketing programs for selected cash crops applied considerably greater fertiliser on other crops (primarily cereals) not directly purchased by the cash crop trading firm. These findings suggest that, in addition to the direct stimulus that interlinked cash crop marketing arrangements can have on small farmer incomes, these institutional arrangements may provide spill‐over benefits for the productivity of farmers' other activities such as food cropping.