The Determinants of Rural Household Food Consumption Expenditure in Lesotho: Impact of Off-farm Income

Keywords: Off-farm, rural households, food consumption expenditure, Lesotho

Abstract

Most smallholder farmers in Sub-Saharan African need to diversify into nonfarm/off-farm income generating activities in order to ensure household food security through optimum consumption expenditure. The aim of this study was to investigate the effect of off-farm income on rural household food consumption expenditure in Lesotho, using secondary data from a comprehensive and representative Household Budget Survey of 2017. The survey design for data collection adopted a two stage stratified sampling procedure. The analysis used two econometric models. The OLS regressions were employed to identify important determinants of household food consumption expenditure and Instrumental Variable (IV) approach was employed to account for endogeneity issues. The results revealed a consistent positive and significant effect of off-farm income on household food consumption expenditure across all models. Household size, transfers and remittances were found to increase household food consumption expenditure significantly and positively. Government is advised to encourage and improve conditions under which rural smallholder farmers could participate in off-farm income generating activities.

Downloads

Download data is not yet available.

References

Abdallah, W., Goergen, M., & O’Sullivan, N. (2015). Endogeneity: How Failure to Correct for it can Cause Wrong Inferences and Some Remedies. British Journal of Management. https://doi.org/10.1111/1467-8551.12113
Ajaero, C. K., & Onokala, P. C. (2013). The Effects of Rural-Urban Migration on Rural Communities of Southeastern Nigeria. International Journal of Population Research. https://doi.org/10.1155/2013/610193
Akpan, S. (2013). Determinants of Food Consumption Expenditure among Agro-Based Firms Workers in Southern Nigeria: Simultaneous Equation Approach. Asian Journal of Agricultural Extension, Economics & Sociology. https://doi.org/10.9734/ajaees/2013/2919
Anderson, A. S. (2002). The effect of cash cropping, credit, and household composition on food security in Southern Malawi. African Urban Quarterly.
Babatunde, R. O., & Qaim, M. (2010). Impact of off-farm income on food security and nutrition in Nigeria. Food Policy. https://doi.org/10.1016/j.foodpol.2010.01.006
Beyene, F., & Muche, M. (2010). Determinants of food security among rural households of Central Ethiopia: An empirical analysis. Quarterly Journal of International Agriculture.
Bryceson, D. F. (2002). The scramble in Africa: Reorienting rural livelihoods. World Development. https://doi.org/10.1016/S0305-750X(02)00006-2
Burgess, S., Dudbridge, F., & Thompson, S. G. (2016). Combining information on multiple instrumental variables in Mendelian randomization: Comparison of allele score and summarized data methods. Statistics in Medicine. https://doi.org/10.1002/sim.6835
Cawley, A., O’Donoghue, C., Heanue, K., Hilliard, R., & Sheehan, M. (2018). The impact of extension services on farm-level income: An instrumental variable approach to combat endogeneity concerns. Applied Economic Perspectives and Policy. https://doi.org/10.1093/aepp/ppx062
Ellis, F. (1998). Household strategies and rural livelihood diversification. Journal of Development Studies. https://doi.org/10.1080/00220389808422553
Ellis, F. (1999). Rural Livelihood Diversity in Developing Countries: Evidence and Policy Implications. Overseas Development Institute, London.
Ellis, F. (2000). The determinants of rural livelihood diversification in developing countries. Journal of Agricultural Economics. https://doi.org/10.1111/j.1477-9552.2000.tb01229.x
Gazuma, E. G. (2018). An Empirical Examination of the Determinants of Food Insecurity among Rural Farm Households: Evidence from Kindo Didaye District of Southern Ethiopia. Business and Economics Journal. https://doi.org/10.4172/2151-6219.1000345
Greene, W. W. H. . (2012). Econometric analysis 7th Ed. In Prentice Hall.
Gujarati, D. N. (2004). Basic Econometrics 4th Edition. In Tata McGraw-Hill. https://doi.org/10.1126/science.1186874
Hoang, T. X., Pham, C. S., & Uluba?o?lu, M. A. (2014). Non-farm activity, household expenditure, and poverty reduction in rural Vietnam: 2002-2008. World Development. https://doi.org/10.1016/j.worlddev.2014.06.027
Idowu, A. O., Awoyemi, T. T., Omonona, B. T., & Falusi, A. O. (2011). Non-farm income diversification and poverty among rural farm households in southwest Nigeria. European Journal of Social Sciences.
Imbens, G. W., & Wooldridge, J. M. (2009). Recent developments in the econometrics of program evaluation. Journal of Economic Literature. https://doi.org/10.1257/jel.47.1.5
Jacobson, D., Mavrikiou, P. M., & Minas, C. (2010). Household size, income and expenditure on food: The case of Cyprus. Journal of Socio-Economics. https://doi.org/10.1016/j.socec.2009.12.009
Lewbel, A. (2012). Using heteroscedasticity to identify and estimate mismeasured and endogenous regressor models. Journal of Business and Economic Statistics. https://doi.org/10.1080/07350015.2012.643126
Mishra, A. K., Mottaleb, K. A., & Mohanty, S. (2015). Impact of off-farm income on food expenditures in rural Bangladesh: An unconditional quantile regression approach. Agricultural Economics (United Kingdom). https://doi.org/10.1111/agec.12146
Mishra, V., & Smyth, R. (2015). Estimating returns to schooling in urban China using conventional and heteroskedasticity-based instruments. Economic Modelling. https://doi.org/10.1016/j.econmod.2015.02.002
Mitiku, A., Fufa, B., & Tadese, B. (2012). Emperical analysis of the determinants of rural households food security in Southern Ethiopia: The case of Shashemene District. In Basic Research Journal of Agricultural Science and Review.
National Institute of Statistics, Directorate General for Health, & ICF International. (2015). Lesotho Demographic and health survey 2014. In Lesotho Ministry of Health.
Nordin, M., & Höjgård, S. (2017). An evaluation of extension services in Sweden. Agricultural Economics (United Kingdom). https://doi.org/10.1111/agec.12294
Paul, K. N., Hamdiyah, A., & Samuel, A. D. (2014). Food expenditure and household welfare in Ghana. African Journal of Food Science. https://doi.org/10.5897/ajfs2013.1120
Rantšo, T. A. (2016). The role of the non-farm sector in rural development in Lesotho. In Journal of Modern African Studies. https://doi.org/10.1017/S0022278X16000197
Rantšo, T. A., & Seboka, M. (2019). Agriculture and food security in Lesotho: Government sponsored block farming programme in the Berea, Leribe and Maseru Districts. Cogent Food & Agriculture. https://doi.org/10.1080/23311932.2019.1657300
Reardon, T. (1997). Using Evidence of Household Income Diversification to Inform Study of the Rural Nonfarm Labor Market in Africa. World Development. https://doi.org/10.1016/S0305-750X(96)00137-4
Ricciuto, L., Tarasuk, V., & Yatchew, A. (2006). Socio-demographic influences on food purchasing among Canadian households. European Journal of Clinical Nutrition. https://doi.org/10.1038/sj.ejcn.1602382
Seng, K. (2015). The Effects of nonfarm activities on farm households’ food consumption in rural Cambodia. Development Studies Research. https://doi.org/10.1080/21665095.2015.1098554
Wang, T., Maruyama, A., & Kikuchi, M. (2000). Rural-urban migration and labor markets in China: A case study in a Northeastern province. Developing Economies. https://doi.org/10.1111/j.1746-1049.2000.tb00872.x
Wooldridge, J. M. (2013). Introductory econometrics?: a modern approach / Jeffrey M. Wooldridge. In Introductory econometrics?: a modern approach.
World Bank. (2005). Empowering People By Transforming Institutions: Social Development in World Bank Operations. Board Report.
?
Published
2020-11-11
Section
Research Paper