Institutional economics of sustainable land: The case of smallholder the eastern Africa highlands

Joseph TanuiDr Rolf Groeneveld

Dr Jeremiahs MowoDr Jeroen Klomp

Prof Ekko

Overview •This paper forms part of a study on the “scaling up of sustainable land management in the eastern Africa highlands”

•Specifically the study contributes towards understanding of “the institutional economics of sustainable land management in smallholder communities”.

Scale perspectives

Landscapes

Farm

Plot

Tree Tree tenure, Niche compatibility and multipurpose use

Crop productivity, nutrient cycling, soil (fertility, depth, slope)

Watershed

Systems

Agricultural productivity, land tenure , income and expenditure flows

Local governance, biodiversity , common property regimes

Vertical and horizontal integration of the biophysical and social economic

International treaties, food security and climate change perspectives

A work in progress Institutional economics of sustainable land management research

has produced the following outputs (papers):1. Rural household income diversification effects on sustainable land

management in smallholder farming systems: The case of the eastern Africa highlands

2. Rural household energy poverty and natural resource degradation effects under intense land pressure: the case of smallholder farming systems from Vihiga district of western Kenya

3. Social networks and investments in sustainable land management practices by smallholder farmers of the east African highlands: A spatial analytical approach

4. Role of poverty in constraining investments in sustainable land management: Modelling an institutional perspective through GAMS

Rural household energy poverty and natural resource degradation effects under intense land pressure: the case of smallholder farming systems from Vihiga district of western Kenya

Understanding the poverty environment nexus

• Smallholders as duo economic agents facing simultaneously the following major objectives (Shiferaw et al., 2009b):– Improving productivity – Sustaining the natural resource base

• Rural households and village incomes, land use and investment strategies determine the links between environment and poverty (Reardon and Vosti, 1995)

• Poverty is usually treated as a single concept, rarely asked is how particular poverty types influence the poverty – environment link

• The combination of rural poverty and natural resource degradation has become a big problem world wide (Kaygusuz, 2011)

Poverty environment nexus

• Rural household energy costs are predominant in household decision making (Hosier and Kipondya 1993);

– Biomass fuels are becoming scarce and conventional fuels expensive

• Decreasing land asset base has increasingly made rural household energy costs a predominant limiting factor (Wamukunya,2004)

• Smallholder agricultural development is considered essential for food security and poverty reduction(Janvry, 2010)

• Smallholder production depends heavily on environmental production conditions that are largely exogenously determined (Sherlund et al., 2002)

Poverty manifestation in East Africa

• Widespread failures in soil fertility replenishment and soil and water conservation are characteristic of majority of smallholder farmers in sub-Saharan Africa (Reardon, 2001; Sanchez, 2001; World bank, 2003);

• Increasing population and reduced farm productivity has over time elicited a culture of agricultural expansionism with disastrous effects;

• In most rural areas, communities predominantly depend on a dwindling supply of wood and other biomass fuels for most of their household and income generating activities(Kaygusuz, 2011).

Conceptual framework

• The study utilizes the notion of sustainable land management as a framework for examining link between poverty and environment

• It addresses a specific type of poverty attributed to specific environmental changes for guiding food security, poverty and environmental policies

• Describes various household energy uses amongst households for indications of fuel transitions based on a diminishing land resource base

Conceptual framework

From Figure (next slide):• The deployment of assets into flows of welfare

constitute a household decision making strategy

• Each strategy maps a stock of assets into flows of welfare based on underlying production, exchange mechanism, market and non market resource allocation arrangement

Energy poverty definitions

• Fuel poverty has been named and defined broadly by at least early 80s (Bradshaw and Hutton, 1983);

• Defined specifically to cover households whose fuel expenditure on all energy services exceed 10% of their income (Boardman,1991);

• Energy poverty defined as the lack of access of households in developing countries to modern energy sources and their consequent reliance on solid biomass fuels for cooking (Temilade,2012);

• The definition of fuel poverty line as the average energy consumption of all households whose overall per capita consumption expenditure level falls within 10% of the official expenditure poverty line (Foster,et. al.,2000).

Study methodology

A cross-section household survey involving a stratified random sampling procedure is undertaken in Vihiga district.

Sampling framework

• Village lists of households were made up based on the 2009 national census lists

• From the list every 9th household member was interviewed• Total number of households interviewed were 320 • Plot level soil sampling and analysis were undertaken in 490

farm plots• A structured survey questionnaire was used to collect

biophysical and social economic data• Community level and district level information was collected

through focus group meetings• Desk top research was also undertaken

Developing a household energy poverty line

We propose an approach to gauging energy poverty based on mean total household income and the mean total annual household energy costs

Where EPI stands for the Energy poverty index, TINC is the annual total income, TENC is the total annual household energy costs and n is the sample population.

Econometric model specification

We develop a model specification of household poverty line model (IFPRI)(Shenggen Fan, 2008).Total household income (TINC) is modeled as:

Where OFF stands for off farm income stream, NRM stands for NRM based income streams, LVT stands for income accruing from livestock production and CRP stands for crop production

Where FOH stands for forest honey, FWD is firewood, TMB is timber, and FDD is fodder, FSH is fishing, TRN is tree nurseries, SAH stands for sand harvesting and QUR for quarrying.

Econometric model specificationThe poverty status is therefore modeled as a function of the household income streams, given z -farm household characteristics.

Where HEP : A binary defined as 1 when the household is above the Household

energy poverty index , and 0 otherwise

Charcoal

5.92%

Firewood59.87%

Fishing, 0.66%Fodder7.24%

Forest honey1.32%

Quarrying3.95%Sand Harvesting

1.32%

Timber15.79%

Tree Nurseries3.95%

Percentage of farmers that practise specific off farm income source

CharcoalFirewoodFishingFodderForest honeyQuarryingSand HarvestingTimberTree Nurseries

Charcoal Firewood Fishing Fodder Forest honey Quarrying Sand Harvesting Timber Tree Nurseries0

10000

20000

30000

40000

50000

13,222

16,458

6,250

33,902

1,000

23,267

3,200

46,655

3,183

Average incomes from off farm

Non farm income sources

Average Incomes in KSH

•Iteration 0: log likelihood = -202.50971 •Iteration 1: log likelihood = -143.44867 •Iteration 2: log likelihood = -137.20523 •Iteration 3: log likelihood = -137.08014 •Iteration 4: log likelihood = -137.0801 •Iteration 5: log likelihood = -137.0801 • •Probit regression Number of obs = 320• LR chi2(21) = 130.86• Prob > chi2 = 0.0000•Log likelihood = -137.0801 Pseudo R2 = 0.3231• •------------------------------------------------------------------------------•energypove~1 | Coef. Std. Err. z P>|z| [95% Conf. Interval]•-------------+----------------------------------------------------------------• houtyp1 | -.4132279 .4990427 -0.83 0.408 -1.391334 .5648778• houtyp3 | -.990162 .4531941 -2.18 0.029 -1.878406 -.1019178• houtyp4 | -.0988006 .1616808 -0.61 0.541 -.4156891 .218088• houtyp5 | -.0447391 .1726639 -0.26 0.796 -.3831542 .293676•age_of_hou~d | .0095144 .0025852 3.68 0.000 .0044476 .0145812•distanceto~t | -.0024877 .0157836 -0.16 0.875 -.0334229 .0284475•Annualliab~y | 9.74e-06 .0000309 0.32 0.752 -.0000508 .0000702• bankaccount | .161946 .2738648 0.59 0.554 -.3748192 .6987112• transpmeans | -.0517002 .2126315 -0.24 0.808 -.4684502 .3650499•ln_ConserM~e | -.0287324 .0629331 -0.46 0.648 -.152079 .0946142•ln_Totalfe~t | .0117501 .0341482 0.34 0.731 -.0551793 .0786794•ln_Labourc~t | -.0163353 .030041 -0.54 0.587 -.0752146 .042544•ln_Totalot~t | .0007071 .0748632 0.01 0.992 -.146022 .1474362•ln_butaneg~t | .0667856 .1163831 0.57 0.566 -.1613212 .2948923•ln_paraffi~t | -.0303671 .041268 -0.74 0.462 -.111251 .0505168•ln_charcoa~t | -.0016212 .031774 -0.05 0.959 -.0638971 .0606546•ln_firewoo~t | -.980223 .1582336 -6.19 0.000 -1.290355 -.6700908•ln_cropres~t | -.21957 .1082903 -2.03 0.043 -.431815 -.0073249•ln_nrmincome | -.0231404 .018847 -1.23 0.220 -.0600798 .013799•ln_offfarm~e | .1466268 .0202787 7.23 0.000 .1068812 .1863723•ln_Totalfa~e | .057411 .0967658 0.59 0.553 -.1322465 .2470686• _cons | 8.246764 1.550185 5.32 0.000 5.208457 11.28507•------------------------------------------------------------------------------•Note: 0 failures and 1 success completely determined.• 

Probit regression

Variable Description Coefficient

Household Characteristics

houtyp1 Dummy Female headed household -0.4132279

houtyp3 Dummy Male headed Polygamous household -0.990162***

houtyp4 Dummy Male headed one wife household -0.0988006

houtyp5 Dummy Male headed widower household -0.0447391

age_of_hou~d Age of household head 0.0095144**

distanceto~t Distance of the farm to nearest market -0.0024877

bankaccount Dummy bank account ownership 0.161946

transpmeans Dummy Means of transport -0.0517002

Farm input costs

ln_ConserM~e Log of SLM maintenance costs -0.0287324

ln_Totalfe~t Log of fertilizer costs 0.0117501

ln_Labourc~t Log of labour costs -0.0163353

ln_Totalot~t Log of other farm inputs 0.0007071

Household energy costs

ln_butaneg~t Log of butane gas cost 0.0667856

ln_paraffi~t Log of paraffin cost -0.0303671

ln_charcoa~t Log of charcoal cost -0.0016212

ln_firewoo~t Log of firewood cost -0.980223***

ln_cropres~t Log of crop residue cost -0.21957**

ln_nrmincome Log of NRM based off-farm income -0.0231404

ln_offfarm~e Log of Nonfarm income 0.1466268

ln_Totalfa~e Log of value of crop produced 0.057411

Constant 8.246764

Asterisks (*, **, ***) indicate significance at 10%, 5%, and 1% respectively.

Discussions• Polygamous household had a negative significant influence on

the index• The older the household head, the more likelihood he had

enough biomass fuel at household level• Firewood income streams was negatively correlated to the

poverty index• Crop residue income streams were also negatively correlated• Those dealing with nonfarm income activities were

significantly above the energy poverty line• Though not very significant involvement in NRM based off-

farm was mainly from those below energy poverty line

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Reference