In market-oriented farming (MOF),farms are managed as business operations using purchased inputs to produce agricultural goods which are marketed and sold for cash(Kahan, 2013). Farmers usually face two markets in production, namely the factor/input market and the commodity/output market.Author:Jian Zhang, Ashok K. Mishra, Stefan HirschPublish Year:2021
What is market-oriented farming?
MARKET ORIENTED FARMING: An overview Emphasizes building the capacity and skills of extension workers in farm management and through them the farmers with whom they work. 4Market-oriented farming: An overview Economics plays an important part in the lives of all people.
What does it mean to be a market oriented farmer?
To be market- oriented farmers will need to produce what the market wants and what satisfies the consumer. As countries become more market-driven, the input and marketing systems become more complex and sophisticated. Farmers are often affected by fluctuations in the prices of inputs and outputs.
What is market orientation in agriculture?
Market-orientation in agriculture can be defined as the degree to which resources (land, labor and capital) are allocated to the production process and the exchange or sale of agricultural products ( Romer, 1994, Barrett, 2008 ).
What is traditional farming and market farming?
Traditional farming Farming utilizing traditional production technologies and largely aimed at increasing food production for the needs of the farm family. 90Market-oriented farming: An overview Value The amount buyers are willing to pay for products produced on a farm.
What is BRFair trust?
This article illustrates the trust relationships among the members of the Brazilian Association of Fairtrade Farmers Organizations (BRFair), which is a second-level network of coffee-producing cooperatives. Representatives of 19 cooperatives were interviewed in 2018 to verify their opinions about the other associations regarding several aspects. Through software specific for social network analysis, the direction and level of trust among the various cooperatives were measured. One cooperative is recognized as the most active and trustworthy, while the other ones are followers and perform peripheric roles. Several improvements are possible, including improvement in the performance of this second-level network and strengthening of its bargaining role with the other actors of the value chain.
What is market oriented farming?
Market-orientation in agriculture can be defined as the degree to which resources (land, labor and capital) are allocated to the production process and the exchange or sale of agricultural products (Romer, 1994;Barrett, 2008). In market-oriented farming (MOF), farms are managed as business operations using purchased inputs to produce agricultural goods which are marketed and sold for cash (Kahan, 2013). Farmers usually face two markets in production, namely the factor/ input market and the commodity/output market. …
Why is marketing information important for agriculture?
Acquisition of marketing information on agricultural products is necessary because lack of, and/or asymmetric, information has the potential of creating an imbalance between product supply and demand leading to loss to marketing channel members, especially farmers. The study was carried out from May to June 2016 in the central region of Nepal to investigate access and usefulness of sources of marketing information among smallholder vegetable farmers. A total information score was used to compare sources of marketing information available to farmers in relation to frequency of contact and usefulness of marketing information. The key sources of marketing information for farmers were notice board services, extension agents, traders, other farmers, and agrochemical dealers. The types of information available and used by farmers are limited either by applicability or acceptance. There needs to be more transparency with respect to dissemination of information to farmers. More sources of marketing information should be readily available to farmers, and the farmers need to accept them as reliable.
What is MOF in agriculture?
The shift from a self-sufficient , smallholder economy to commercialized and market-oriented farming ( MOF) is a sign of agricultural economic prosperity. MOF implies more efficient use of resources and higher returns on resource allocation. In this paper, we focused on farmers’ participation in MOF, namely, renting-in land and cash cropping and its impact on farm performance (farm profits, yields and costs). We applied a two-stage MESTR framework to data from a nationally representative household survey, comprising 4,560 rural Chinese farm households. We found that socioeconomic factors, natural and physical assets, formal credit, land certification and transportation assets significantly affected farmers’ participation in different MOF activities.
How does MOF relate to farmers?
The study focuses mainly on two MOF activities of smallholders, namely renting-in land and cash cropping. Renting-in land relates to farmers’ participation in the factor market, while cash cropping reflects output market participation. Previous studies have shown that land renting and cash cropping are interrelated ( Liu et al., 2018, Zhang et al., 2020a ). Cash crop farming is known to maximize profits and generate higher net returns per unit of land than staple crops ( Anderman et al., 2014, Birthal et al., 2015 ). Besides, cash crops bring higher market prices but are associated with greater risks due to fluctuating prices and increased upfront investment ( Anderman et al., 2014, Birthal et al., 2015 ). Farmers must pay attention to market information to keep track of significant changes in market prices of cash crops, while the Chinese government regulates staple crop prices (rice, corn, and wheat) with quota procurement prices ( Huang and Rozelle, 2006 ). Furthermore, small farmers engaged in cash cropping tend to have more obvious profit-maximizing motives than households focusing on staple crops. Farmers growing cash crops for the market must concentrate on farming and devote more time to farm work, while those growing grain crops may hold several jobs. 3 Participation in LRM by renting-in land signals that farmers intend to expand their land scale and specialize in farming. 4 Also, China’s LRM development has lagged behind reforms in the rural labor market. This could be due to the current collective land tenure system under which the sale of land is forbidden and land transactions are constrained.
How did China’s rural reform affect the economy?
In addition to the agricultural commodity market reform, China’s rural reform has also had an impact on factor markets. Rural factor markets usually include land and labor markets and are crucial for improving agricultural productivity and rural household incomes ( Feng, 2006 ). While the economic reform brought a relaxation of the regulations governing rural labor mobility, farmers’ land transfer rights did not come into force legally until the promulgation of China’s Rural Land Contract Law in 2003 ( Ma et al., 2015 ). In 2005, the People’s Republic of China issued detailed guidelines to regulate land rental activities, specifying three main types of land transfer, namely subcontracting, rent and exchange. 6 However, the LRM developed slowly and there were hardly any land rental activities at that time ( Deininger and Jin, 2005 ).
What are farm performance indicators?
Following Latruffe and Piet, 2014, Mishra et al., 2016, farm performance indicators include farm profits, yields and costs. In our study, farm profit is the difference between aggregate agricultural output value and production costs. Farm yield is calculated as the ratio of aggregate agricultural output value to farm size. Note that farmers in our sample plant 1 to 3 crops on one plot during the year making physical measures of output an inadequate measure for yield. Following previous literature ( Vollrath, 2007, Feng et al., 2010, Deininger et al., 2014 ), we therefore use the aggregated monetary value per unit area (Yuan/mu) to measure farm yield. 12 Farm cost is the ratio of aggregated input costs for seeds, fertilizer, pesticides, hired labor, machine rental and irrigation to farm size. Table 2 presents descriptive statistics as well as a comparison of performance indicators across MOF groups. The Paired t-tests show that, on average, farmers in R 1 C 0, R 0 C 1, and R 1 C 1 have significantly higher farm profits than farmers in the base group (R 0 C 0 ). On average, farmers only renting-in farmland (R 1 C 0) had significantly lower yields than the base group. In contrast, farmers who chose cash cropping only (R 0 C 1) had farm yields over twice as high as the base group’s average yields (R 0 C 0 ). Finally, Table 2 shows that farmers participating in cash cropping (R 0 C 1) and farmers involved in both renting-in farmland and cash cropping (R 1 C 1) had significantly higher production costs than farmers in the base group.
What are the factors that affect the decision to rent in farmland?
The study revealed that the age of the head of the household, land endowment, fixed agricultural assets, the value of livestock, irrigation facilities, access to formal credit, land certification and transportation assets are critical factors affecting farmers’ decisions to rent-in farmland (R 1 C 0 ). On the other hand, land endowment, fixed agricultural assets, irrigation facilities and transportation assets are essential factors when choosing the cash cropping (R 0 C 1) regime. Common factors affecting farmers’ participation in renting-in land only (R 1 C 0) and cash cropping (R 0 C 1) include owned farmland area, agricultural fixed assets, irrigation facilities and transportation assets. The findings underline that participation in the LRM is a more complicated process than cash cropping. It is influenced by the transaction environment and other factor markets, such as labor and credit markets and the family attributes of a rural household. Therefore, more secure property rights and developed factor markets have the potential to encourage farmers to participate in LRM. In turn, the decision to participate in cash cropping activities is influenced by the availability of ample productive assets and means of transportation which help farmers to improve their farming capabilities and facilitate product market access. Thus, access to means of transport and productive assets can encourage Chinese farmers to grow cash crops. The study found that factors that affect a farmer’s decision to rent-in land (e.g., age of HH, owned farmland, fixed agricultural assets and transportation assets) are also decisive for participating in both land renting-in and cash cropping activities. The above findings imply that farmers’ participation in the input market (farmland) is more commercialized. Farmers may also participate in the output market, driving the integration of the factor and output markets.
How to improve the economics of MOF?
Relevant policies should focus on integrating input and output markets to maximize the economic benefits of MOF. In this process, more attention should be paid to the LRM and its further development as this would help to expand farm size and stimulate farmers’ commercial production. The provision of secure property rights and eliminating the imperfections in the labor and credit markets are of paramount importance. Property rights could be improved by land certification while the development of the machinery service market could increase farming efficiency. Under China’s reform of “the separation of rural land ownership rights, contract rights, and management rights,” farmland should entail entitlement to collateral rights to facilitate farmers in seeking loans from banks. Access to credit would relax the liquidity constraints in land renting and simplify infrastructure investments and the purchase of inputs and other production materials. A better-developed machinery service market could improve farmers’ ability to expand farm size and productivity, especially for those suffering from a shortage of labor and agricultural assets. Furthermore, it is necessary to reduce the risks in agricultural production and market participation through a comprehensive crop insurance market. Finally, good public production facilities and marketing systems must be developed to improve agricultural production conditions and market access, thus encouraging farmers to specialize in farm production and adjust their crop choices and farming structures.
How does renting in land affect farm profits?
Renting-in land has allowed rural households to increase their farm profits by about 40%. However, despite increasing farm size, crop yields fell by about 47% due to land renting-in activities. Cash cropping increased both profits and yields by about 64% and 100%, respectively.
Why are smallholder farmers so poor?
One possible reason for low incomes among smallholder farmers is a lack of access to markets for the crops that they grow. As a result, programs that promote “market-oriented farming”—encouraging farmers to shift production to crops that are in higher demand—may be an effective strategy for increasing farmer incomes. However, there is little existing rigorous evidence about this strategy. This research will provide evidence on how market-oriented farming affects household income and consumption, and how these impacts may lead to changes in overall welfare (including health, education, and gender equity).
What is the main source of income in Kenya?
In Kenya, as in many countries in Sub-Saharan Africa, farming is a key source of income for many people. As of 2017, 38% of Kenyans were employed in agriculture. 1 The Smallholder Horticulture Empowerment and Promotion (SHEP) program is a project that encourages farmers to shift production to crops that are in higher demand, along with a host of activities meant to change agricultural practices, encourage cooperation between groups of farmers, and promote gender equity within farming households. The SHEP approach was designed in a collaboration between Kenya’s Ministry of Agriculture, Livestock and Fisheries and the Japan International Cooperation Agency (JICA) and begun in 2006. SHEP PLUS is the third iteration of the program, but the first to be studied using a randomized evaluation.
Why are smallholder farmers in sub-Saharan Africa so low income?
One reason for low incomes among smallholder farmers in Sub-Saharan Africa may be a lack of demand for their crops in the markets that these farmers have access to. In Kenya, Smallholder Horticulture Empowerment and Promotion (SHEP) is a program that trains smallholder farmers to adopt a “market-oriented farming” approach involving shifts to more in-demand crops and adoption of new agricultural practices. Researchers are working with IPA to evaluate the program’s impacts on participants’ incomes and other measures of well-being such as health and educational opportunity.