Microfinance, Efficiency and Agricultural Production in Bangladesh

The objectives of this study were to make a detailed and systematic empirical analysis of microfinance borrowers and non-borrowers in Bangladesh and also examine how efficiency measures are influenced by the access to agricultural microfinance. In the empirical analysis, this study used both parametric and non-parametric frontier approaches to investigate differences in efficiency estimates between microfinance borrowers and non-borrowers. This thesis, based on five articles, applied data obtained from a survey of 360 farm households from north-central and north-western regions in Bangladesh. The methods used in this investigation involve stochastic frontier (SFA) and data envelopment analysis (DEA) in addition to sample selectivity and limited dependent variable models. In article I, technical efficiency (TE) estimation and identification of its determinants were performed by applying an extended Cobb-Douglas stochastic frontier production function. The results show that farm households had a mean TE of 83% with lower TE scores for the non-borrowers of agricultural microfinance. Addressing institutional policies regarding the consolidation of individual plots into farm units, ensuring access to microfinance, extension education for the farmers with longer farming experience are suggested to improve the TE of the farmers. In article II, the objective was to assess the effects of access to microfinance on household production and cost efficiency (CE) and to determine the efficiency differences between the microfinance participating and non-participating farms. In addition, a non-discretionary DEA model was applied to capture directly the influence of microfinance on farm households production and CE. The results suggested that under both pooled DEA models and non-discretionary DEA models, farmers with access to microfinance were significantly more efficient than their non-borrowing counterparts. Results also revealed that land fragmentation, family size, household wealth, on farm-training and off farm income share are the main determinants of inefficiency after effectively correcting for sample selection bias. In article III, the TE of traditional variety (TV) and high-yielding-variety (HYV) rice producers were estimated in addition to investigating the determinants of adoption rate of HYV rice. Furthermore, the role of TE as a potential determinant to explain the differences of adoption rate of HYV rice among the farmers was assessed. The results indicated that in spite of its much higher yield potential, HYV rice production was associated with lower TE and had a greater variability in yield. It was also found that TE had a significant positive influence on the adoption rates of HYV rice. In article IV, we estimated profit efficiency (PE) and profit-loss between microfinance borrowers and non-borrowers by a sample selection framework, which provided a general framework for testing and taking into account the sample selection in the stochastic (profit) frontier function analysis. After effectively correcting for selectivity bias, the mean PE of the microfinance borrowers and non-borrowers were estimated at 68% and 52% respectively. This suggested that a considerable share of profits were lost due to profit inefficiencies in rice production. The results also demonstrated that access to microfinance contributes significantly to increasing PE and reducing profit-loss per hectare land. In article V, the effects of credit constraints on TE, allocative efficiency (AE) and CE were assessed while adequately controlling for sample selection bias. The confidence intervals were determined by the bootstrap method for both samples. The results indicated that differences in average efficiency scores of credit constrained and unconstrained farms were not statistically significant although the average efficiencies tended to be higher in the group of unconstrained farms. After effectively correcting for selectivity bias, household experience, number of dependents, off-farm income, farm size, access to on farm training and yearly savings were found to be the main determinants of inefficiencies. In general, the results of the study revealed the existence substantial technical, allocative, economic inefficiencies and also considerable profit inefficiencies. The results of the study suggested the need to streamline agricultural microfinance by the microfinance institutions (MFIs), donor agencies and government at all tiers. Moreover, formulating policies that ensure greater access to agricultural microfinance to the smallholder farmers on a sustainable basis in the study areas to enhance productivity and efficiency has been recommended. Key Words: Technical, allocative, economic efficiency, DEA, Non-discretionary DEA, selection bias, bootstrapping, microfinance, Bangladesh.

Constructing and negotiating entrepreneurial agency : A social psychological approach to entrepreneurship discourse in the farm context

Entrepreneurship, understood as the autonomous, effective pursuit of opportunities regardless of resources, is currently subject to a multitude of interests, expectations, and facilitation efforts. On the one hand, such entrepreneurial agency has broad appeal to individuals in Western market democracies and resonates with their longing for an autonomous, personally tailored, meaningful, and materially rewarding way of life. On the other hand, entrepreneurship represents a tempting and increasingly popular means of governance and policy making, and thus a model for the re-organization of a variety of societal sectors. This study focuses on the diffusion and reception of entrepreneurship discourse in the context of farming and agriculture, where pressures to adopt entrepreneurial orientations have been increasingly pronounced while, on the other hand, the context of farming has historically enjoyed state protection and adhered to principles that seem at odds with aspects of individualistic entrepreneurship discourse . The study presents an interpretation of the psychologically and politically appealing uses of the notion of entrepreneurial agency , reviews the historical and political background of the current situation of farming and agriculture with regard to entrepreneurship, and examines their relationships in four empirical studies. The study follows and develops a social psychological, situated relational approach that guides the qualitative analyses and interpretations of the empirical studies. Interviews with agents from the farm sector aim to stimulate evaluative responses and comments on the idea of entrepreneurship on farms. Analysis of the interview talk, in turn, detects the variety of evaluative responses and argumentative contexts with which the interviewees relate themselves to the entrepreneurship discourse and adopt, use, resist, or reject it. The study shows that despite the pressures towards entrepreneurialism, the diffusion of entrepreneurship discourse and the construction of entrepreneurial agency in farm context encounter many obstacles. These obstacles can be variably related to aspects dealing with the individual agent, the action situation, the characteristics of the action itself, or to the broader social, institutional and cultural context. Many aspects of entrepreneurial agency, such as autonomy, personal initiative and achievement orientation, are nevertheless familiar to farmers and are eagerly related to one s own farming activities. The idea of entrepreneurship is thus rarely rejected outright. The findings highlight the relational and situational preconditions for the construction of entrepreneurial agency in the farm context: When agents demonstrate entrepreneurial agency, they do so by drawing on available and accessed relational resources characteristic of their action context. Likewise, when agents fail or are reluctant to demonstrate entrepreneurial agency, they nevertheless actively account for their situation and demonstrate personal agency by drawing on the relational resources available to them.

Maidontuottajatila ja ravinnepolitiikka: Tilan toimintamekanismit, politiikan tarve ja ohjauskeinojen vaikuttavuus

Tutkielman tarkoituksena on rakentaa malli, jolla voidaan arvioida maitotilan toimintaa monipuolisesti ravinnehuuhtouman kannalta. Tavoitteena on ennen muuta analyyttinen tarkastelu siten, että kuitenkin huomioiden maidontuotannon ominaispiirteet, keskeisinä esimerkkeinä ravinnon, maidontuotannon ja lannan ominaisuuksien väliset riippuvuudet. Analyysissa tarkastellaan tilanomistajan yksityisen hyödynmaksimoinnin ja yhteiskunnan tavoitteiden eroavaisuutta. Lisäksi johdetaan optimaaliset ohjauskeinot ja arvioidaan eräiden yksinkertaisten ohjauskeinojen vaikuttavuutta. Mallin analysoinnin perusteella yksityinen ja yhteiskunnallinen optimiratkaisu eroavat toisistaan kaikkien päätösmuuttujien osalta. Ei voida kuitenkaan yleispätevästi sanoa muutosten merkittävyyttä tai suuntaa ottamatta kantaa mallin funktiomuotoihin ja parametriarvoihin. Optimaaliset ohjauskeinot tulisi asettaa keinolannoitteen ja lannan levitykselle, väkirehuruokinnalle ja säilörehun viljelylle, mutta ei eläinten määrälle. Toisaalta optimaaliset ohjauskeinot ovat hyvin monimutkaisia. Tarkasteltujen yksinkertaisempien ohjauskeinojen vaikuttavuutta ei voida tarkasti arvioida analyyttisella tasolla. Numeeristen tulosten perusteella yhteiskunnallisessa optimissa eläinmäärä olisi hieman yksityistä optimia pienempi, väkirehun käyttö vähäisempää, enemmän peltoa allokoitaisiin säilörehun viljelyyn ja lannoitustasot olisivat kautta linjan hieman pienemmät. Lannanlevitykset eroavat etäisyyden suhteen: molemmissa tapauksissa lannanlevityksen intensiteetti kasvaa kohti tilan keskusta kuljettaessa, mutta yksityisessä optimissa lähimmälle pellolle dumpataan kaikki ylimääräinen lanta, kun taas yhteiskunnallisessa optimissa lanta levitetään tasaisemmin eri pelloille. Ero kokonaishyvinvoinnissa jää pieneksi, mutta eläinmäärän kasvu kärjistäisi lannan dumppauksen aiheuttamia huuhtoumahaittoja. Yksinkertaisista ohjauskeinoista lannoitusrajoitus sekä ravinne- ja keinolannoitevero osoittautuivat kohtalaisen käyttökelpoisiksi numeeristen tulosten perusteella. Sen sijaan eläinmäärän rajoittaminen ja lannan kuljetuskustannuksia kompensoivat tuet vaikuttavat tulosten perusteella huonoilta ratkaisuilta.

Jatrophanviljely ja maankäyttö Vietnamissa

Biofuels are under discussion all over the world today. There are fears that the farming of biofuel plants hurts food production and weakens the food security of the poor. On the other hand, biofuel production could lessen the green house gas emissions caused by transportation, and it could also spread the profits from fuel markets more evenly between countries. The aim of this thesis is to find out how an oil plant called jatropha curcas L., which is used for biodiesel production, can affect the sustainability of livelihoods in Vietnam from the point of view of land use. Special attention is given to the effects of jatropha farming on food production, land productivity, natural resources of livelihoods and global livelihood. Jatropha belongs to the family Euphorbiaceae, and it grows naturally in tropical and subtropical areas. It can be grown on poor soils, its seeds have high oil content, and it cannot be eaten due to its toxicity. The plant grows naturally in Vietnam, and during the past few years it has also begun to be farmed for making biodiesel. Population growth in Vietnam has slowed down, but the population's standard of living and energy consumption are still rising quickly. An interest in the international biodiesel markets has awoken following Vietnam's opening up to international trade. Jatropha diesel plays a significant part in Vietnam’s clean fuel strategy, and many companies have set up jatropha plantations to produce raw material for biodiesel. Diesel made from jatropha is planned to be used both locally and for export. This thesis uses a theoretical concept of sustainable livelihoods. According to the theory, the resources that people have shape their livelihood possibilities. Farming of jatropha affects the livelihoods of people especially through land use, as land use changes have effects on many of the livelihood resources. In addition to the written sources, the material of the thesis is based on 14 interviews in Vietnam and Finland, and on observation during a field trip to Northern Vietnam in the spring of 2008. The results of the thesis show that jatropha diesel can support the sustainability of livelihoods at different scales if it is produced with deliberation. However, positive results are only possible if decisions are made carefully and more experience is collected. The possibilities of sustainable jatropha farming depend mainly on the previous land use methods and ways of production. Farming of jatropha does not threaten food production in Vietnam if the farming plans are implemented as planned. Jatropha may take some land from cassava, but at the same time, food production can be increased if mixed farming is used on some farms. Plenty of new research information and practical experiences on jatropha farming has to be collected before results of the real sustainability of the farming are ready. Carefully considered continuation and documentation of present and future projects would help to understand the possibilities of jatropha diesel in Vietnam and elsewhere.