Smallholders, output and input markets, and technology adoption in Central America

Chapter 1 analyzes the determinants of Guatemalan farmer participation in off-farm employment (in different activities, the lion's share of which is in local rural nonfarm employment (RNFE), as skilled RNFE and unskilled RNFE, and in agricultural wage employment (AWE)). The paper then analyzes how that participation in off-farm employment is correlated with farming technology and crop choice, in particular in terms of diversification into horticulture (versus traditional grain and bean farming). The paper uses a switching regression model applied to rural data in the LSMS dataset collected in Guatemala in 2000. The overall results suggest a virtuous triangle of income inter-sectoral diversification, agricultural diversification into higher value crops, and modernization of agricultural technology. This process appears to be spurred by overall development of agricultural markets and rur-urbanization. The concern is that this combination is uneven distributed, with the asset-poor participating least. This suggests policy interventions to help the poor have greater access to RNFE would spur diversification which helps incomes and manages risk, and technology modernization which spurs farm productivity.;Chapter 2 explores whether farm land and non-land assets determine the participation of tomato growers in modern markets in Nicaragua, and how farmers' duration as supermarket suppliers affects the farm technology they use. The methodology is based on a survival analysis approach. We use data from a stratified random sample of tomato farmers in Nicaragua over a 10-year period. Our results show that participation in supermarket supply chains as supermarket supplier is not determined by farm size, contrary to a common hypothesis, and thus small farmers can be supermarket suppliers. However, non-land assets are important determinants of being in the modern channel. Duration as a supermarket supplier is positively correlated with farm asset accumulation and the use of modern technology (mainly in the form of capital-led intensification) of tomato farming - but negatively correlated with the share of highly toxic pesticides in overall pesticide use.;Chapter 3 is an extension of chapter 2. This paper studies how product choice, perishability and modern farm technologies can be both causes and consequences of participation of smallholders in horticultural modern markets. The methodology is based on a survival analysis approach, we use data from a stratified random sample of 794 growers of six horticultural crops in Nicaragua in 2010. Similarly to the second essay, our results show that participation as supermarket supplier is not determined by farm size. However, the use of drip irrigation (a modern technology) significantly determines participation and duration as supermarket supplier. Production of highly perishable products and/or niche varieties is a competitive advantage for smallholders, as they tend to last longer as supermarket suppliers. Duration is positively correlated with indicators of farm modernization and intensification, while late adopters (long time to adoption periods) tend to overuse pesticides and are negatively correlated with indicators farm technology modernization.