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Modelling Synergies and Scope Economies between Farm Enterprises and Ecosystem Outputs in the Agricultural Sector in England and Wales

2010, Fleming, Euan, Hadley, David, Holloway, Garth

Interest has been growing in the nature of synergies in agroecosystems, prompted in part by growing concerns about the effects of environmental degradation on agricultural productivity and interrelations between agricultural outputs and ecosystem outputs. Most productivity analyses focus on technology, technical inefficiency and scale effects on productivity; yet scope economies derived from synergies can also have substantial effects that are likely to increase in the future. Scope economies take on special importance when farms diversify to halt declining biodiversity and other forms of environmental degradation. We present results of an empirical case study based on panel data on farms in England and Wales. A stochastic input distance function is estimated using Bayesian methods that enable economies of scope to be calculated between pairs of outputs based on the derivatives of the input distance function. Results confirm the presence of scope economies from diversity, providing prima facie evidence that diversity is beneficial in farming systems in England and Wales. But a number of challenges lie ahead to improve the data set and method of measuring scope economies for further substantiation of this evidence. Chief among them is the need to obtain a better measure of ecosystem outputs. The complexity of agroecosystems, with their diverse elements and numerous interactions between elements, presents a major challenge for data collection.

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Sources of efficiency, productivity and output growth in Botswanan agriculture

2018-08, Temoso, Omphile, Hadley, David, Villano, Renato

The purpose of this study is to explore reasons for the decline in agricultural performance in Botswana that has occurred during the implementation of a variety of policy measures, as well as the introduction of new technologies, and to identify ways in which it might be reversed. Panel data from six regions in Botswana (period 1979-2012) is analyzed with a stochastic output distance function and inefficiency effects model. We decompose agricultural output growth into; total factor productivity (TFP) and changes in input use (factors of production). TFP is further decomposed into scale effects, technical efficiency and technological change. The results show that over the study period agricultural output grew at a very low rate of 0.072 percent per year, which is largely due to a growth in factors of production at 0.071 percent per year rather than TFP growth (which declined at 0.003 percent per year). We found that the decline in productivity has been due to technological regress and low growth in technical efficiency and scale efficiency. Policy options aimed at improving agricultural productivity and output growth will require the strengthening of extension services; improving the agronomic and husbandry management skills of farmers through training; and by encouraging farmers to adopt and utilize technologies that have been provided under existing policy programs.

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Coastal and Marine Ecosystem Services Valuation for Policy and Management

2009, Luisetti, Tiziana, Turner, R Kerry, Hadley, David, Morse-Jones, Sian

Understanding the economic value of nature and the services it provides to humanity has become increasingly important. In this paper we review the progress to date on both the necessary conceptual framework and empirical valuation studies required to bolster decision support systems targeted at integrated coastal zone management goals. We first review definitions of ecosystem services. We then highlight and discuss the importance of: spatial explicitness; marginal changes; double-counting; non-linearities; and threshold effects. Finally, using UK case studies on managed coastal realignment, we highlight the usefulness of an ecosystem services sequential decision support system to environmental valuation and policy assessment.

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The Impact of Financial Literacy on Financial Inclusion and Household Welfare in Ghana

2020-03-12, Koomson, Isaac, Villano, Renato, Hadley, David

Enhancing household welfare remains a major challenge in the developing world, and especially in sub-Saharan African (SSA). The provision of financial literacy and women’s empowerment training and improvements in financial inclusion have been widely acknowledged as key welfare-enhancing tools. The fundamental question is whether these tools are effective in achieving the welfare-specific components of the Sustainable Development Goals (SDGs). The main objective of this thesis is to examine the impact of financial literacy and women’s empowerment training on financial inclusion and household welfare in Ghana. We use household consumption expenditure, value of accumulated assets, poverty, and vulnerability to poverty as welfare indicators.

Using primary data collected through a randomised controlled trial (RCT) and secondary data extracted from the Ghana Living Standards Surveys (GLSS), this thesis employs various micro-econometric approaches to: (i) examine the impact of financial literacy training on financial inclusion and its intensity from a gendered perspective; (ii) ascertain the joint impact of financial literacy and women’s empowerment training on household consumption; (iii) study the joint impact of financial literacy and women’s empowerment training on rural household welfare; (iv) determine the role of financial literacy in the process of asset accumulation in households; (v) estimate the effect of financial inclusion on the growth of non-farm enterprises, and; (vi) analyse the effect of financial inclusion on poverty, and vulnerability to poverty. Household-level data from RCT experiments in 2015 and 2016 are used to address the first four objectives, while data extracted from GLSS6 (2012/13) and GLSS7 (2016/17) are used to accomplish the last two objectives. This thesis is organised in a journal paper-based structure composed of six interrelated papers with each paper presenting the empirical findings for each objective.

The focus of papers 1 to 4 is on the impact of financial literacy and women’s empowerment training on financial inclusion and selected welfare indicators. In general, the findings show that beneficiaries of financial literacy training are more likely to be financially included and that intensity of financial inclusion is higher for male and young beneficiary households. Our findings suggest important implications on the design of the training programs and its impact on selected welfare indicators. We find that solely offering financial literacy training has a weaker impact on household consumption than does training which incorporates a women’s empowerment module. Moreover, joint provision of financial literacy and women’s empowerment training increases impact on rural households compared to separate delivery of these training modules. The results indicate that financial literacy training plays a significant role in the asset accumulation process, especially in the accumulation of productive durable assets. Papers 5 and 6 centre on the effect of financial inclusion on the growth of family businesses and upon poverty. The evidence presented in Paper 5 suggests that improvement in the level of financial inclusion of non-farm entrepreneurs is growth enhancing, with higher probability in the urban relative to rural areas. Finally, the results in Paper 6 show that an increase in financial inclusion decreases a household’s likelihood of being poor and prevents households’ exposure to future poverty. Female-headed households stand a greater chance of experiencing a larger reduction in poverty and vulnerability to poverty through enhanced financial inclusion than do male-headed households. Furthermore, financial inclusion reduces poverty and vulnerability to poverty more in rural than in urban areas.

This thesis provides significant contributions to the literature and offers important policy implications. This is the first comprehensive analysis using empirical evidence on the relevance of financial literacy, women’s empowerment and financial inclusion, as welfare enhancing development tools in Ghana. This study also highlights the importance and practical significance of the use of experimental (RCT) and quasi-experimental designs in impact evaluation.

The results provide useful insights to policy makers and stakeholders. First, financial literacy training can be used to bridge existing gender gaps in financial inclusion and asset accumulation and enhance household welfare in sustainable ways. Second, we advocate for the inclusion of women’s empowerment modules into financial literacy training programmes to accelerate the achievement of their desired welfare-enhancing goals. Third, we envisage that strategies targeted at boosting financial inclusion will not only spur the growth of firms, but will also expand these enterprises and hence improve tax revenue for the economy as a whole. Fourth, we conclude that financial literacy, financial inclusion and women’s empowerment can be used as tools to achieve the welfare-specific components of the SDGs. Fifth, it will be prudent to improve on levels of FI by committing more resources to enhancing the regulatory and institutional frameworks that promote access to the financial system. Finally, there is a need to design policies that provide the business environment necessary for private banks to operate and expand services to more distant areas.

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Effect of Financial Inclusion on Poverty and Vulnerability to Poverty: Evidence Using a Multidimensional Measure of Financial Inclusion

2020-06, Koomson, Isaac, Villano, Renato A, Hadley, David

This study examines the effect of financial inclusion on poverty and vulnerability to poverty of Ghanaian households. Using data extracted from the seventh round of the Ghana Living Standards Survey in 2016/17, a multiple correspondence analysis is employed to generate a financial inclusion index, and three-stage feasible least squares is used to estimate households’ vulnerability to poverty. Endogeneity associated with financial inclusion is resolved using distance to the nearest bank as an instrument in an instrumental variables probit technique. Results showed that while 23.4% of Ghanaians are considered poor, about 51% are vulnerable to poverty. We found that an increase in financial inclusion has two effects on household poverty. First, it is associated with a decline in a household’s likelihood of being poor by 27%. Second, it prevents a household’s exposure to future poverty by 28%. Female-headed households have a greater chance of experiencing a larger reduction in poverty and vulnerability to poverty through enhanced financial inclusion than do male-headed households. Furthermore, financial inclusion reduces poverty and vulnerability to poverty more in rural than in urban areas. Governments are encouraged to design or enhance policies that provide an enabling environment for the private sector to innovate and expand financial services to more distant places. Government investment in, and regulation of, the mobile money industry will be a necessary step to enhancing financial inclusion in developing countries.

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Analysing the Agricultural Costs and Non-market Benefits of Implementing the Water Framework Directive

2006, Bateman, I J, Brouwer, R, Kay, D, Leeks, G, Lewis, M, Lovett, AA, Neal, C, Posen, P, Rigby, D, Turner, R K, Davies, H, Day, B H, Deflandre, A, Di Falco, S, Georgiou, S, Hadley, David, Hutchins, M, Jones, A P

Implementation of the Water Framework Directive (WFD) represents a fundamental change in the management of water in Europe with a requirement that member states ensure 'good ecological status' for all water bodies by 2015. Agriculture is expected to bear a major share of WFD implementation costs as it is compelled to reduce the emission of diffuse water pollutants. The research outlined here comprises interdisciplinary modelling of agricultural land use, hydrology and consequent water quality effects to consider both agricultural costs and the non-market recreational use (and potentially non-use) values that implementation of the Directive may generate. A theme throughout the research is the spatial distribution of the costs and benefits of WFD implementation, which is addressed through the use of GIS techniques in the modelling of agricultural land use, the integration of land use and hydrological models, and the estimation, aggregation and transfer of the economic value of the benefits.

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Total factor productivity growth in livestock production in Botswana: what is the role of scale and mix efficiency change in beef production?

2023, Temoso, Omphile, Ng'ombe, John N, Bahta, Sira, Hadley, David

It is well established that improving livestock productivity has the potential to boost food security, income, and employment for rural communities. While the technical efficiency of the livestock sector has been extensively studied in both developing and developed countries, few studies have analysed total factor productivity (TFP) and its components (technical change, technical, scale, and mix efficiency changes). To fill this gap this study specifically analyses the TFP growth of 26 beef cattle producing districts in Botswana using the Färe-Primont index. This index does not only allow us to understand how TFP varies amongst the districts but also how it has changed over time (between 2007 and 2014) as well as examining what has been driving that change. We also employ a feasible generalised least squares estimator for panel data to identify sources of productivity and efficiency growth. Results show that livestock TFP increased during the study period, and that this was driven by technological change, whilst efficiency change (TFPE) decreased. Further, we found that the decline in scale-and mix efficiency change (OSME) was largely responsible for the slowdown of TFPE, with a relatively smaller decline in technical efficiency change (OTE) also contributing. Districts with foot and mouth disease (FMD) outbreaks and restricted access to export markets had lower TFP growth whilst proximity to livestock advisory centres (LAC), off-farm income, education and herd size were shown to enhance productivity and efficiency growth.

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Agricultural productivity, efficiency and growth in a semi-arid country: a case study of Botswana

2015-09, Temoso, Omphile, Villano, Renato A, Hadley, David

This paper attempts to examine and revisit the trends in agricultural productivity in Botswana. Using secondary data from six regions of Botswana for the period 1979 to 2012, we estimate components of total factor productivity (TFP) using the Färe-Primont index. Estimates of technical change and changes in technical efficiency, scale efficiency and mix efficiency are obtained. The results show that the annual TFP has declined gradually over the period, predominantly due to a decline in technical efficiency and a slight decline in mix efficiency and scale efficiency. The regions with a significant proportion of arable agriculture performed worse than those that specialise in livestock production, thus confirming the comparative advantage of extensive livestock production in semi-arid countries such as Botswana. This study shows how the finer decomposition of TFP into different measures may assist in the identification of the main drivers of productivity and associated policies.

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Efficiency and Productivity at the Farm Level in England and Wales 1982 to 2002

2006, Hadley, David, Australian Government, Department for Environment, Food and Rural Affairs (Defra)

This report updates to 2002 the work on farm level efficiency presented previously, which terminated in 1997. This allows a better attempt at measuring the effects of new policies like set aside, which were introduced late in the period.

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Land use and the coastal zone

2009, Hadley, David

Future changes in land use in the coastal zone will be dominated by the effects of climate change. The major effect of climate change on the coastal zone will be due to increasing sea level which, in combination with possible increases in the frequency and intensity of storms, will bring about: • change in patterns of erosion and sedimentation • increased risk of flooding • change in the distribution and types of coastal habitats. The coastline has always been subject to change through erosion and other natural processes. Climate change may speed this change. This will mean profound impacts on low-lying coastal areas over the next 50 years, particularly along the eastern coast of England. These physical changes in the coastal zone will occur alongside, and interact with, a variety of human impacts and drivers of change. Agricultural policy reform, and changes in production in response to this and to climate change, will alter coastal landscapes as well as sediment and nutrient inputs into coastal waters. Demographic change - an increasing UK population, who are on average older and who potentially have more leisure time - will be likely to bring about an increased demand for the recreational opportunities that the coast provides. This will mean more demand for land for housing and recreational facilities. A continuing trend of rising income levels may also fuel further demand for imported goods and hence the need for further port development, particularly in the south east of England. Coastal landscapes are also likely to be heavily impacted by the construction of renewable energy infrastructure, i.e. offshore wind farms and wave and tidal power projects.