Migration and Technical Efficiency in Cereal
Production:
Evidence from Burkina Faso
Fleur Wouterse
International Food Policy Research Institute
Wednesday, July 27, 2016
OUTLINE
 Introduction: Migration and agricultural production
o Migration and investment in agriculture
o Migration and loss of labor
o Migration and technical efficiency
 Data and study area
 Analytical model
 Results
 Conclusions
 Policy implications
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 2
MIGRATION AND AGRICULTURAL PRODUCTION
 Two important effects of migration
o Earnings in the form of remittances
o Loss of labor
o
o
Changes in household agricultural activities
Effect on technical efficiency
 Migration and investment in agriculture
o New Economics of Labour Migration (NELM): remittances as a substitute
for formal or informal credit enable households to overcome liquidity
constraints, invest in new technologies and activities.
 Migration and loss of labour
o Migration may compete with other household activities for scarce
household resources, including time.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 3
MIGRATION AND AGRICULTURAL PRODUCTION ctd.
 Migration and technical efficiency
o Technical inefficiency: inability of household to obtain maximal output from
a given set of inputs.
o Technical inefficiency considered as a measure of management error,
rather than income or gross output.
o Lower inefficiency does not correspond to greater yields or greater income.
o Low input farmer could achieve a better technical efficiency score than a
high input farmer – depends on maximum possible yield from inputs
applied.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 4
MIGRATION AND AGRICULTURAL PRODUCTION ctd.
 Households with different migration status can differ in terms of efficiency
o Poverty or rigidities in factor markets may contribute to variations in technical
inefficiency based on differential access to labor – i.e. labor lost to migration
cannot be replaced by hired labor
o Access to remittances may encourage resident household members to
attend less to farm production and more to other activities
o In an imperfect market environment, access to remittances may enable
households to respond faster to management imperatives
 Different forms of migration are likely to have different impacts on
efficiency
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 5
DATA AND STUDY AREA
 Household survey conducted by the author in a number of villages in
Burkina Faso in 2003.
 Purposeful selection of villages: incidence of both continental (within Africa)
and intercontinental migration (to Europe, mainly Italy).
 Two villages, Niaogho and Béguédo, selected for this analysis
 Niaogho and Béguédo situated next to each other in the south of the Central
Plateau
 Central Plateau characterized by high population density, land degradation,
and history of outmigration.
 Random selection of 100 households
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 6
DATA AND STUDY AREA ctd.
 Subsistence cropping of sorghum (Sorghum bicolor) and millet (Pennisetum
glaucum) primary activity of households.
 Cropping on the Central Plateau is rain fed and characterized by a single
short cropping season each year.
 Soils chemically poor with high vulnerability to erosion
 Labor productivity in staple cropping tends to be low, little investment in
fertilizer and limited application of manure.
 Crop production often combined with livestock keeping.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 7
DATA AND STUDY AREA ctd.
 Agricultural production takes place in imperfect market environment
 Missing markets for
o Labor: households make virtually no use of hired labor – some
exchange labor is used (“work parties”)
o Land: land cultivated on hereditary basis - high population density has
led to land scarcity - not a single land transaction was recorded in the
data.
o Credit: lack of commercial land market transactions
land cannot
function as collateral for credit. Restricted options for collateral and
collateral substitutes mean that households face severe limitations in
accessing a formal credit market
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 8
DATA AND STUDY AREA ctd.
 Uncertainty, combined with missing markets for risk, creates
incentives to diversify income-generating activities.
 Diversification through migration:
o Continental migrants: young men looking for work elsewhere on the
African continent, until recently Côte d’Ivoire, now often Ouagadougou.
o Intercontinental migration: young (Bissa) males migrate to Italy, initially
to engage in horticulture around Naples.
o Intercontinental migration is highly lucrative in terms of remittances sent
back to the household but involves high entry costs (transport)
o Household members who migrate almost always stay away for more
than one year.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 9
DATA AND STUDY AREA ctd.
Table 1: Farm characteristics by migration status (cereal production)
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 10
DATA AND STUDY AREA ctd.
 Land: intercontinental migrant farms larger compared with the farms of nonmigrant and continental migrant households
 Labour:
o Non-migrant households: more males than females per hectare.
o Continental migrant households: number of males and females per
hectare is equal,
o Intercontinental migrant households: more females per hectare
compared to males – polygamy & wealth
 Capital: animal traction most used by households with intercontinental
migrants
 Variable inputs: spending on inputs similar across household groups
 Output: harvest per hectare similar across household groups
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 11
DATA AND STUDY AREA ctd.
Table 2: Labour input in days per hectare (cereal production)
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 12
DATA AND STUDY AREA ctd.
 Differences in production process by migration status:
o Preparation and planting – intercontinental migrant households use less
male labour
o Crop maintenance: most labour-intensives stage but migrant
households use less male labor – flexibility in weeding decisions
depending on information
o Harvesting – intercontinental migrant households use less male labour
o Non-migrant households: total labor input per hectare of males is higher
than that of females
o Continental migrant households: input of males and females is almost
equal
o Intercontinental migrant households: labor input of females exceeds that
of males.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 13
DATA AND STUDY AREA ctd.
 Hypotheses:
1. Migrant households of either type do not follow a strategy of cereal cropping
intensification i.e. remittances do not lead households to invest more in
inputs
2. The effect of migration differs by destination of the migrant.
o Continental migration associated with a balanced labor input of males
and females
o Intercontinental migration associated with more use of female compared
with male labor
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 14
ANALYTICAL MODEL
 Estimation of technical efficiency in cereal production: non-parametric
approach
o No need to make arbitrary assumptions regarding the functional form of
the frontier and the distributional form of the error
o Relatively less data demanding, works well with small samples, as
compared with the parametric approach
o Drawback: attributes all the variation from the frontier to inefficiency frontier it estimates is likely to be sensitive to measurement errors or other
noise in the data - use a bootstrap method to address this problem
 Data Envelopment Analysis to estimate output-oriented technical efficiency
index (appropriate in missing market environment where households use fixed
quantities (land, labor) of inputs to produce a maximum amount of output)
 Allowing for variable returns to scale (DEA-VRS)
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 15
ANALYTICAL MODEL
 Sources of technical inefficiency: factors that relate to
o Managerial ability
o Endowment of physical capital
o Financial market access
 Problems using Tobit:
o Efficiency scores are not independent (calculation of the efficiency score
for one farm household necessarily involves all other farm households in
the sample) - error term will be serially correlated and standard inference
is not valid.
o Efficiency scores are likely to be biased in finite samples.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 16
ANALYTICAL MODEL
 Double bootstrap (Simar and Wilson, 2007):
(i)
(ii)
(iii)
(iv)
standard DEA efficiency point estimates are calculated
estimates are integrated in a bootstrap procedure
the bootstrap procedure produces bias-corrected efficiency estimates;
the bias-corrected efficiency estimates are used in a parametric bootstrap on
the truncated maximum likelihood;
(v) thus creating standard errors for the parameters of the regression.
(vi) confidence intervals are then constructed for the regression parameters as
well as for the efficiency scores.
Number of bootstrap replications set equal to 2000.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 17
RESULTS
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 18`
RESULTS
 Mean technical efficiency estimate measures range from 1.21 to 1.39
 Figure 1 shows the distribution of the efficiency scores for the different
groups of households.
 The distribution for households with intercontinental migrants resembles that
of non-migrant households but is shifted towards the right, indicating lower
efficiency.
 The distribution for continental migrant households is less dispersed so that
more households have efficiency estimates closer to 1, resulting in higher
efficiency.
 Substantial shortfalls in cereal production efficiency exist.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 19
RESULTS
Table 3: Truncated regression of determinants of bias-corrected technical efficiency
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 20
RESULTS
 Negative relationship between continental migration and technical
inefficiency - households with continental migrants are more efficient
 No relationship exists between intercontinental migration and inefficiency
 Missing or incomplete markets, for labor, credit and insurance, create the
possibility of asymmetric impacts of migration and remittances on efficiency
across the asset distribution (farm equipment, cattle, female/male labor
ratio) – estimation of interactions:
o The interaction effect of intercontinental migrants with the value of farm
equipment is negative, direct migration effect is not significant
intercontinental migration through its effect on the value of farm
equipment positively affects technical efficiency.
o The interaction of intercontinental migration with the dummy for the
female-to-male labor ratio is strongly positive and significant, the direct
migration effect remains insignificant
intercontinental migration
through its impact on the female to male labor ratio negatively affects
efficiency.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 21
RESULTS
o The positive effect of intercontinental migration on efficiency through the
quality of productive capital offset by a negative effect from its disturbing
effect on the gender balance.
o For continental migrant households the direct migration effect strongly
significant for all interactions.
o Findings with asset-migration interactions suggest that although assetrich intercontinental migrant households could improve technical
efficiency in cereal cropping through investment in farm equipment, the
pronounced imbalance between males and females in labor input has a
strong negative effect on inefficiency.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 22
CONCLUSIONS
 Destination of migrants is an important explanatory factor in inefficiency.
 Continental migration is associated with improved efficiency by shifting labor
time of male adults away from cereal production.
 The lack of a positive relation between intercontinental migration and
efficiency is explained by a distortion of the gender balance in the household,
with females becoming the prominent provider of labor in cereals.
 The ability of households to adopt cereal production to changing factor
endowments implies that migrant households remain involved in staple
cropping.
 Cereal production practices are not transformed from traditional to modern.
 A missing market environment forces households to allow for flexibility in their
production practices and to make investments in traction equipment—not to
increase productivity, but to retain flexibility.
 A missing market for labor does not allow for ambitious production plans likely
to lead to seasonal manpower constraints.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 23
POLICY IMPLICATIONS
 Migration and remittances have development implications - most relevant for
policymakers.
 A benchmark for development useful in the current context is how migration
and related remittances reshape migrant-sending economies.
 Even though intercontinental migration provides households with the
required liquidity and the value of productive capital is higher for these
households, technical efficiency does not improve.
 If migrants leave in response to a lack of productive investment
opportunities in the local economy, then remittances alone will not suffice to
transform agricultural production.
 Productive investments are strongly related to the level of market formation
and local economy conditions.
 Thus, to maximize benefits of migration, imperfections in the market
environment will still need to be addressed.
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 24