Why liberalization alone has not improved agricultural productivity in Zambia : the role of asset ownership and working capital constraints

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Why liberalization alone has not improved agricultural productivity in Zambia : the role of asset ownership and working capital constraints, Volume 1

Author:	Deininger, Klaus; Olinto, Pedro;	Collection Title:	Policy, Research working paper ; no. WPS 2302
Country:	Zambia;	Date Stored:	2000/04/19
Document Date:	2000/03/31	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Agriculture, fishing, and forestry
Region:	Africa	Report Number:	WPS2302
Sub Sectors:	Other Agriculture	SubTopics:	Environmental Economics & Policies; Economic Theory & Research; Agricultural Research; Banks & Banking Reform; Labor Policies; Agricultural Knowledge and Information Systems
Volume No:	1

Summary: The authors use a large panel data set from Zambia to examine factors that could explain the relatively lackluster performance of the country's agricultural sector after liberalization. Zambia's liberalization significantly opened the economy but failed to alter the structure of production or help realize efficiency gains. They reach two main conclusions. First, not owning productive assets (in Zambia, draft animals and implements) limits improvements in agricultural productivity and household welfare. Owning oxen increases income directly, allows farmers to till their fields efficiently when rain is delayed, increases the area cultivated, and improves access to credit and fertilizer markets. Second, the authors reject the hypothesis that the application of fertilizer is unprofitable because of high input prices. Rather, fertilizer use appears to have declined because of constraints on supplies, which government intervention exacerbated instead of alleviating. (Extending the use of fertilizer to the many producers not currently using it would be profitable, but increasing the amount applied by the few producers who now have access to it would not be.) Policies to foster accumulation of the assets needed for agricultural production (including draft animals and implements) and to provide complementary public goods (education, credit, and good agricultural extension services) could greatly help reduce poverty and improve productivity.


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