Module 5 buffer role of agriculture in times of crisis the ghanaian experience
Download
1 / 17

Module 5 Buffer Role of Agriculture in Times of Crisis: The Ghanaian Experience - PowerPoint PPT Presentation


  • 165 Views
  • Uploaded on

Module 5 Buffer Role of Agriculture in Times of Crisis: The Ghanaian Experience. Principal Investigator: Daniel Bruce Sarpong Collaborator: S. Asuming-Brempong Department of Agricultural Economics & Agribusiness University of Ghana, Legon-Accra GHANA. Background to the study.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Module 5 Buffer Role of Agriculture in Times of Crisis: The Ghanaian Experience' - lindsey


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Module 5 buffer role of agriculture in times of crisis the ghanaian experience

Module 5Buffer Role of Agriculture in Times of Crisis: The Ghanaian Experience

Principal Investigator: Daniel Bruce Sarpong

Collaborator: S. Asuming-Brempong

Department of Agricultural Economics & Agribusiness

University of Ghana, Legon-Accra GHANA


Background to the study
Background to the study

  • Ghana’s economy hit by internal and external shocks: mid 1970s to mid 1980s

  • Some Macroeconomic crisis indicators

  • Labor Market severely affected


Buffer Role of Agriculture

Broadly defined

Agriculture’s ability to absorb non-agricultural dependent HH in urban and rural areas in times of macroeconomic shocks/crises


  • CONTEXT OF STUDY

  • Primarily focuses on the positive externality role of agriculture in the economy.

  • 1983 - 2000

  • Specifically on the implicit value of the informal insurance role that HH play in supporting family members who lose jobs acquired upon migrating to urban areas


General objective
General Objective

To document, assess and characterize agriculture’s ability to act as a buffer when economic shocks hit the urban labor market and how agriculture influences non-agricultural dependent HH.


Methodology of the study
Methodology of the Study

  • Data

  • Descriptive Evidence of macroeconomic crises in Ghana

  • Descriptive Evidence regarding labor market adjustments

  • Descriptive evidence of Formal/informalsafety nets


Methodology continued
Methodology continued...

  • Analysis of the role of agriculture in times of crisis:

  • Descriptive evidence at Macro-level

  • Descriptive evidence at Micro-level


Methodology continued1
Methodology continued…..

  • Econometric work (HH level) : implicit value of the informal insurance role

  • The test is based on the Remittance function(Stark, 1991; Lucas and Stark, 1985, Hoddinot, 1992; etc)


Remittance function contd
Remittance Function contd….

  • The basic model for urban to rural transfer is:

    R = d0 + d1y + d2W + d3Z + d4FA + d5MA + d6 Mills R i + di Xi + ei

  • For the rural to urban transfers, the estimated model is:

    R = b0 + b1y + b2Xi + b3Z + ui

  • An equation of the probability of being employed is estimated:

    Pi = c + g Xi +  Di

    Z = (1 – Pi) is derived

  • The main hypothesis tested where Ho is the null and Ha the alternative, is:

    • Ho: d3 = 0

    • Ha: d3 > 0


Key results
KEY RESULTS

Agriculture role at the macro level during crisis

(the widely perceived fundamental contributions of agriculture)

  • employment

  • exports

  • revenue (general and for social services)

  • food supply

  • etc


Results contd
Results contd…...

  • Ease of entry into agriculture

  • allowed the populace to draw directly on nature (food/nutrition/diet shifts)

  • reactivation of rural enterprises utilising local inputs such as wood and wood extracts

  • etc


Results contd…At the micro level………..Agriculture role at the micro level during crisis:Reverse migration

Source: Table adapted from Canagarajah and Mazumdar (1997)


Results contd reverse migration effects and incomes in rural vrs urban areas
Results contd….. Reverse migration effects and incomes in rural vrs urban areas

Source: Canagarajah and Mazumdar (1997). AEU--Adult equivalent units


Results contd1
Results contd….. rural vrs urban areas

Agriculture role at the micro level during crisis:

Remittances (value of cash, food or goods)

Proportions

1991/92 GLSS 3

  • From Urban to Rural households: 5.7 percent of total remittances from urban

  • From Rural to Urban households: 36 percent of total remittances from rural

    1998 GLSS 4

  • From Urban to Rural households: 3.1 percent of total remittances from urban

  • From Rural to Urban households: 52 percent of total remittances from rural

    Absolute (real 1991 cedis)

    1991/92 GLSS 3

  • From Urban to Rural households: 2 billion cedis

  • From Rural to Urban households: 9 billion cedis

    1998 GLSS 4

  • From Urban to Rural households: 2.9 billion cedis

  • From Rural to Urban households: 26.3 billion


Migrants remittance equation dependent variable log remit
MIGRANTS REMITTANCE EQUATION: rural vrs urban areasDependent variable: log (REMIT)

  • VARIABLE DESCRIPTION ALL MIGRANTS (Estimated Coeff)

    (Only variables statistically significant reported)

    Constant 3.215*

    Emprisk Z 7.3277***

    log (FPCI) 0.3771***

    log (LAND) 0.1451***

    DCHILD*SEX 0.5666*

    SEX (Male = 1) 0.6367***

    Location of H of H in rural coast 0.3407*

    Educ of H of H (Kinder + Prim) 0.4161*

    Educ of H of H (Mid + JSS) 0.3850*

    Dummy for Spouse 1.1678***

    N = 252 (*), (**), (***) Sig. at 10, 5 and 1 percent


Heads of hh remit equation dependent variable log totremit
HEADS OF HH REMIT EQUATION: rural vrs urban areasDependent variable: log (TOTREMIT)

  • VARIABLE DESCRIPTION ALL Heads of H (Estimated Coeff)

    (Only variables statistically significant reported)

    Constant 3.0015***

    Emprisk Z -2.2179**

    log (PCI) 0.6188***

    DCHILD 0.2490***

    DCHILD*SEXM 0.2429**

    Where migrat lives (Accra) -0.1633*

    Where migrat lives (Kumasi) 0.2001**

    Educ of H of H (Learnt Trade) 0.2759**

    Dummy for Spouse 0.6544***

    Dummy for Kin -0.2633***

    N = 1,918 (*), (**), (***) Sig. at 10, 5 and 1 percent


Deductions and policy implications
Deductions and Policy Implications rural vrs urban areas

Focusing on the buffer role of agric at the HH level, the main conclusion is

  • The rural household support system points to a much more enhanced role of the rural sector as an institutional set-up complementing an incompleteness in formal social security markets. Agriculture (rural HH) is not just a source of food, employment, income and of labor supply.

    The question is: How do we enhance the existence and effectiveness of this positive externality whereby agriculture (the rural sector) engages in unemployment risk sharing schemes? We see that:

    • As RHPCI increases, there is an increase in remittances from migrants (premiums goes up, increasing investment funds at the rural level)

    • As RHPCI increases, there is increased remittances to migrated HH members to cushion economic effects

      The solution lies in helping the rural sector reduce aggregate risks in income through increased rural activity diversification. The policy implications include

  • Rural infrastructure improvements (roads, electricity, education, health)

  • PSI -like focus, etc

    These are areas where government policies could focus to enhance the role of agriculture in response to mitigating macro-shocks in an economy.


ad