Abstracts Category : Other

Examining Agricultural Household Welfare through Output Marketing Choices and Land Market Efficiency : Evidence from Rural India

by Caleb Dickson

Development research and policy aim to improve household welfare by improving access to assets and economic opportunities (Besley & Burgess 2000; Deininger et al. 2003). In rural and agrarian contexts, these goals may be achieved by well-functioning markets for outputs, inputs, off-farm work, and credit. The status of these markets impacts household welfare and resilience, as well as the equity and efficiency of resource use. Designing policies for improving household welfare requires an understanding of markets in rural areas. In particular, policymakers must understand how household and location characteristics impact household participation in markets and how participation impacts welfare. This dissertation contains three essays that address rural household welfare and the role of policy for Southern India. The first essay examines the selection and impact of agricultural marketing channels for farm households in rural villages of Andhra Pradesh, India. The evaluation of agricultural marketing channels in developing countries is becoming more relevant due to the growth of modern food retail (e.g. large grocery stores). This type of supply channel evolution is beginning in India as the supermarket, food processing, and food service sectors have grown rapidly in recent years. For the most part, this growth has not extended beyond the retail end of the supply channel: the traditional wholesale markets (also known as mandis) are still the most significant means for transferring food from rural to urban areas. As such, this paper analyzes current crop and milk marketing channels available to rural households in Andhra Pradesh. The goals of this analysis are to identify how household and location characteristics impact channel choice (ex-ante), if existing channels provide differential returns from one another, and which types of households benefit more or less within a channel (ex-post). The results indicate that household income is higher for households selling crops to brokers and selling milk to co-operatives. Moreover, channel choices and resulting impacts are affected by both transport and search costs. This analysis provides evidence that policy aimed at reducing transport and search costs directly associated with a channel can improve household welfare under current channel structures. Given the likely characteristics of emerging channels, similar policy is expected to improve farmer welfare in the future too.The second essay is an analysis of rural land leasing markets in multiple states across India. Land leasing markets are hypothesized to improve the efficiency of land allocation and provide welfare gains to participating households. However, in developing countries, these markets are commonly impacted by transactions costs, missing or incomplete non-land markets, and insecure property rights. This study assesses how Indian land markets perform in terms of equity and efficiency, identifies land market distortions, and examines how policy can address these distortions. Using a panel dataset of householdsAdvisors/Committee Members: Antle, John M. (advisor), Munisamy, Gopinath (committee member).