CMAAE Thesis

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    Modeling farm-household livelihoods for estimating the adoption impacts of selected policy instruments on agriculture and climate change in south-eastern Cameroon.
    (African Economic Research Consortium, 2023-10-17) Ngaiwi, Mary Eyeniyeh
    With climate change already compounding the socio-economic and biophysical constraints to development in Central Africa, the adoption of conservation agriculture (CA) is one mainstreamed opportunity to improve food and livelihood security in the region. Despite the rapid advancements in CA, research on CA has been superficially addressed in Cameroon. This study therefore seeks to ex ante estimate the adoption impacts of policy instruments (Reducing Emissions from Deforestation and Degradation REDD+ and CA)(REDD+) on the livelihood security of small holder farmers in the face of climate change in south-eastern Cameroon. To accomplish this herculean task, a multistage purposive random sampling technique was employed arriving at a sample of 351 respondents. Primary and secondary data were employed in this study. An impact analysis was conducted on smallholder farmers of this area, using a multinomial logit regression analysis with treatment effects. This research was grounded by the utility maximization theory and thus Heckman two-stage regression and the multivariate probit regression analysis were also employed for this study. The results from this analysis indicated that among the conservation practices employed by farmers, cover crops, mulching, minimum tillage, and crop rotation are the most used though agroforestry and intercropping have some conservation attributes and employed by most farmers. Furthermore, adoption of these policy instruments is determined by institutional, socio-demographic and farm level characteristics with gender playing a great significance. This therefore implies that adaptation to climate change is dependent on socio-demographic and plot level characteristics which should be paid thorough attention when formulating adaptation strategies and policies. Farmers of this area will greatly be positively affected in their livelihoods if they adopt mulching, intercropping, agroforestry, and cover crops. Thus, agroforestry and intercropping can be incorporated fully in conservation agriculture and scaled to attain climate change mitigation.
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    Factors affecting adoption of mobile money by farming households in Lomahasha Inkundla of the Lubombo Region, Eswatini
    (African Economic Research Consortium, 2023) Dlamini, Theophilus Lusito
    The conventional banking system has not been meeting the needs of the mass market in Eswatini, which is mostly made of the unserved and underserved farmers in rural areas. Mobile money and other recent innovations in fintech present the potential to address the financial exclusion amongst financially marginalised groups in Eswatini. Only 44% of adult Emaswati are formally banked. In a mission to improve financial inclusion, Eswatini MTN introduced mobile money to provide formal financial services for financially excluded groups. This study was carried out to determine the factors which influence mobile money’s adoption by farming households in rural areas of Eswatini. Knowledge of such factors is crucial in formulating policies geared towards financial inclusion in the country. The study used survey data collected from 160 randomly selected rural farmers from the Lomahasha Inkundla in the Lubombo region of Eswatini. The results of the descriptive statistics show that 93.1% of sampled farmers have knowledge of mobile money, 80% were registered mobile money users, whilst 67% of the non-registered farmers indicated a positive intention to open a mobile money account. A majority (61.3%) of respondents were male. The typical farmer’s age was 43 years old. Farmers without formal education accounted for 16.9% of the sample. About 58.8% of respondents owned bank accounts, whilst 40% were members of a Savings and Credit and Cooperatives (SACCOs). Trust as an informal institution against moral hazard is quite strong across the mobile money value chain. Most farmers trust that the system is safe and secure. Interpersonal trust between agents and customers is very strong. Users perceive the financial service to be useful, with a majority of the registered users utilizing mobile money for settling utility bills and executing peer to peer transactions. The study uses the binary logistic regression models to determine the factors that significantly influence the decisions of farmers to adopt mobile money. Evidence from the results show that, socioeconomic characteristics of farmers have significant influence on the decisions for adoption of mobile money. Gender, Education, Ownership of a formal bank account and farming experience were found to significantly influence the decisions for mobile money adoption. The odds of mobile money adoption were higher for female farmers than male farmers. The odds for mobile money adoption were also found to be higher for farmers with formal education beyond Primary school. So were the banked farmers as compared to unbanked farmers. The mobile money innovation has evidently shown some prospects to significantly improve the level of financial inclusion in Eswatini. In the study sample, the overall result of financial inclusion was 61.3% before accounting for mobile money adoption, thisimprovesto 80% when we account for mobile money. The results also show that the fintech is complementary to the conventional banking system. The study recommends that the Mobile Network Operator (MNO) incorporates financial literacy training in their strategy to capacitate mobile money users and prospective adopters. It is also recommended that formal financial institutions leverage potential linkages with informal finance organisations and self-help groups i.e. SACCO’s, ASCA’s and ROSCA’s. However, it’s imperative to approach this with caution and avoid any over-formalization would threaten the existence of the informal sector.
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    Agroecological location of farms and choice of drought coping strategies of smallholder farmers in Swaziland
    (African Economic Research Consortium, 2023) Khumalo, Temndeni Amnestantia
    This study uses data from Swaziland to test whether variations in local agro-ecological regions levels of drought susceptibility and other socioeconomic factors significantly determine farmer selected drought coping and adaptation strategies. This was in response to the policy need to understand how livelihoods of poor, rural, smallholder farming communities can be made more resilient in the face of recurrent droughts. Swaziland’s agro ecological regions were divided into those that were highly susceptible (Lubombo and Lowveld) and those that were relatively less susceptible (Highveld and Middleveld) to drought. Using structured questionnaires and face-to-face interviews, the study compared 115 randomly selected farmers from the former and 50 farmers from the latter region based on the following household level indicators: behavioural responses to perceived long-term changes in temperature and precipitation; the impact and behavioural responses to the most recent drought event; how farmers would have responded if they had ex ante information on the most recent drought event; ex ante private investment in anticipation of future drought events; and finally farmer preferences for ex ante public investments in anticipation of future drought events.
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    The impact of the Europeun Union grant on access to credit and production in smallholder sugarcane agriculture in Siphofaneni, Eswatini
    (African Economic Research Consortium, 2023) Maziya, Sikhanyiso Angel
    Credit is important because it enables farmers to increase agricultural production. Access to credit from commercial banks for smallholder farmers enhances productivity and promotes farmer development. It plays an important role in alleviating poverty and creating an economically stable life. However, access to credit for rural smallholder sugarcane farmers in Eswatini is limited. The purpose of this study was to assess the impact of a European Union (EU) grant on access to credit from commercial banks and farming activities for smallholder sugarcane farmers in Eswatini. The study determined whether smallholder sugarcane farmers had access to credit from commercial banks and other formal financial institutions. It also determined whether being a participant in an EU grant funding led to increased access to credit and to higher production for smallholder sugarcane farmers. The study determined the extent to which an EU grant funding contributed to eliminating constraints faced by smallholder sugarcane farmers. Data was analysed using Statistical Package for the Social Sciences (SPSS) software. Descriptive and econometric analyses were performed to identify the factors that influence access to credit and farming activities for smallholder sugarcane farmers. The Propensity Score Matching (PSM) was applied to identify the impact of the EU grant funding on access to credit from commercial banks and farm activities. The matching compared beneficiaries to non-beneficiaries of the EU grant funding in terms of the independent variables hypothesised to have an effect on access to credit. After the application of PSM, the average treatment effect on the treated was used to measure the appropriateness of the intervention of the EU grant funding on smallholder sugarcane farmers in Eswatini. Descriptive statistics show that 55% of the smallholder sugarcane farmers are male and their average age is 58 years. It also shows that about 37% of the smallholder farmers are illiterate, with only 32% attending primary school and only 31% attending high school. Lastly, it shows that, the major source of income for smallholder farmers is the sugarcane farming enterprise and that about 37.5 % of smallholder sugarcane farmers in Siphofaneni have been beneficiaries of EU grant funding.
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    Contract farming and access to formal credit in South Africa: A case of small scale sugarcane growers in the Felixton Mill area of KwaZulu-
    (African Economic Research Consortium, 2023) Sifundza, Sandile Bongani
    Sugarcane farming is one of the most important agricultural enterprises in South Africa and most of the people working in the agricultural sector are employed in the sugar industry. Sugarcane farmers and sugar mills contribute significantly to the economic survival of rural communities and towns where sugarcane is grown, in terms of employment opportunities. However, in the rural areas of KwaZulu-Natal, smallholder sugarcane farmers are faced with a serious problem of low productivity, partially caused by lack of access to formal credit. Formal financial institutions do not adequately provide credit to smallholder farmers, since they are considered to be non creditworthy and lack the required collateral. In the agricultural sector, one of the alternatives in solving the problem of inability to access formal credit is contract farming. Therefore, the main purpose of the study was to investigate the role of contract farming in improving access to formal credit for small-scale sugarcane farmers in the Felixton mill area in the KwaZulu-Natal province. The specific objectives were to (a) determine the status of access to formal credit for smallholder sugarcane farmers; (b) identify factors that determine smallholder sugarcane farmers’ access to credit from formal financial institutions; (c) identify factors that may lead sugarcane farmers to participate in contractual agreements; and (d) determine whether participating in contracts promotes access to formal credit for smallholder sugarcane farmers. In total, 220 small-scale sugarcane farmers were sampled for the survey, using a proportional stratified random sampling procedure. In analysing the data, both descriptive analysis and an econometric model were used in the study. The data were analysed using Statistical Package for Social Sciences software (SPSS 20.0). Two logistic regression models were estimated. One was estimated to identify the factors and characteristics that influence access to formal credit for smallholder farmers. The other was estimated to identify the different factors that influence smallholder sugarcane growers to participate in contractual arrangements with other value chain players. The results of the study indicate that most of the small-scale farmers in Felixton were credit constrained, as only 19% of the farmers had access to credit from formal credit sources. A majority of the farmers (94%) engaged in contractual agreements with other actors in the value chain. The results of the logit model revealed that engagement in contractual agreements by small-scale sugarcane farmers was statistically and positively influenced by farmers’ age, gender and whether or not they had received training in sugarcane production. Engaging in contract farming was also statistically, but negatively, influenced by access to the market and access to formal credit.