Economics of gender, risk and labour in horticultural households in Senegal

Women play an important role in agricultural production, particularly in Africa, by managing their own farm and by providing their labour to their husband’s fields. Regardless of the predominance of a gender bias with regard to their access to resource, women constitute a vital force in the development of agriculture. Throughout the world, gender issues in the development of agriculture and women’s role and contribution to agriculture continue to be a great subject of debate. Despite the wide range of literature available, the importance of agriculture to the economic development in Africa and the critical role that rural women play within this sector still constitute an attractive research agenda. In Sub-Saharan African countries, where the majority of the population derives its food and livelihood from agriculture, a strong growth in agriculture is vital for the process of economic development. Agriculture must be the leading sector for overall growth, poverty alleviation, and the reduction of income disparities. In such a context, getting agriculture to move forward is crucial. Particularly with the drastic changes in the world food situation, which affect Africa more than any other region, much more attention should be paid to the supply side of agriculture, both for food crops and market-oriented crops. In fact, cash crops, with high added value products like horticultural products, offer opportunities to boost the agricultural growth in developing countries like Senegal, where horticulture is a key element of the agricultural sector. Accordingly, with the recent world-wide food trouble, there is a need, more than ever, to examine the economic performance of the agricultural producers, and especially the efficiency of the use of scarce resources, to confront the challenges ahead. However, the key role of women in the agricultural sector in many parts of the world, and particularly in agriculture-based countries like African countries, calls for more gender-sensitive approaches and for policies that take people’s gender identity into account. Jointly, all these reasons widely justify the relevance of this research thesis, which aims to investigate the economic performance of horticultural households in Senegal, using efficiency and profitability as main indicators and adopting a gender perspective. Efficiency is assessed in a specific social, cultural, economic, and institutional context, in which polygamy occurs and husband and wives usually manage their plots separately. In this context, next to household labour, the labour market offers possibilities to hire labour under two common forms of contract, based on sharecropping or wage. In addition, with the high volatility of the price of horticultural products, the market risk is challenging. Therefore, from this context emerge four main research questions addressed in this thesis, related to (i) the efficiency of the allocation of household resource over men and women, (ii) the efficiency of contracts with hired workers, either as wage labourers or as sharecroppers for household profit optimization, (iii) risk behaviour across gender, and (iv) its effects on the economic performance and the choice of labour contracts. Three chapters (Chapters 3, 4 and 5) provide theoretical and empirical evidence on these research questions, preceded by two chapters (Chapters 1 and 2) setting out the purpose and background of this research. Chapter 2 describes horticultural households from a gender standpoint, using data collected from a survey of 203 horticultural households in the Niayes Zone in Senegal. We surveyed a total of 422 horticultural plots, managed by 279 producers, of which 190 are men and 89 are women. The households grow a diversity of horticultural crops during the three main seasons. We surveyed five of the most cultivated crops, such as onion, cabbage, tomato, green bean, and potato. All these crops are destined for the national and subregional market. Only green bean is exported to European countries, mainly to France. This descriptive chapter shows that a household homes 3 to 26 members, with an average of 10. Horticultural households derive their income essentially from horticulture, with a share of 77% of men’s total annual income and 60% of women’s income. Women provide 15% of the household’s total annual income, estimated on average at fcfa 2.1 million. With a daily income per capita of fcfa 575, or 1.3 US dollars, horticultural household members are living slightly above the national poverty line of fcfa 497 and the new extreme poverty threshold of 1.25 US dollars in developing economies. Household land ownership varies from 0 to 20 hectares, with a median of 3. A great gender gap occurs in particular with regard to the allocation of resource and assets, access to land, and irrigation equipment. Men are the main owners of land and irrigation equipment within the household. In 60% of the households, women are deeply involved in horticulture, managing their own piece of land that has usually been allocated to them by their husband. However, even when they manage their own plots, women and men often work on each other’s plots to carry out hard or time-consuming farming operations. With an average of 460 m2, women’s plots are 4.7 times smaller than men’s plots are. However, regarding the physical conditions of the plot, no major gender discrimination is noticed. With this small plot size, the intensity of the inputs used is higher on women’s plots than it is on men’s plots. As a result, women’s plots yield 17% more in terms of output in value per hectare and 40% more in terms of profit per hectare than men’s plots do. Horticultural production is so labour-intensive that household labour is not always sufficient and some households take recourse to hired labour. However, while some households hire labour based on a sharecropping contract (31%), others hire labour based on a wage contract (7%). The return per season to sharecropping for a sharecropper is higher on average than the seasonal wage paid by the household to a wage worker. Moreover, the most time-consuming cropping operation is irrigation, which takes 75% and 85% of the total working time of household members on men’s plots and women’s plots, respectively. The time-share of irrigation is on average higher on women’s plots than it is on men’s plots, because women do not have access to improved irrigation equipment like a motor pump. The horticultural marketing context is characterized by a high variability of the output price, which is a major risk. For the same plot and crop, the selling price of the production varies greatly from one harvesting sequence to the next one, which takes just a few days. Altogether, the descriptive chapter brings to light the research issues addressed in the following chapters. Chapter 3 replies to the first research question by examining the efficiency of household resource allocation. It furthermore deals with the appropriateness of using gender-specific models rather than a unitary model while investigating the economic performance of male and female managers of separate plots within horticultural households. Therefore, chapter 3 contributes to the gender and economics literature, providing empirical evidence regarding intra-household resource allocation in a polygamous context in which husband and wives manage their plots separately. Both the unitary and gender-specific stochastic frontier production functions show that women plot managers are as technically efficient as men plot managers are, but neither the men nor the women are fully technically or allocatively efficient. The determinants of technical inefficiency effects present some similarities as well as some differences between men and women plot managers. Furthermore, based on gender-specific models, the value of the marginal product of land and irrigation equipment is higher on the women’s plots than it is on the men’s plots, while the value of the marginal product of inputs and labour is higher on the men’s plots than it is on the women’s plots within the same household. We can conclude from the findings that optimality or allocative efficiency from a household perspective is far from being achieved for all the inputs. Some improvements can be made by shifting land and irrigation equipment from men to women and by shifting inputs and labour from women to men. However, given that both men and women are allocatively inefficient in the use of inputs, rather than to shift, it is better to scale up the inputs used in order to reduce the inefficiency. Since households are cropping on average 59% of their available land, there are some possibilities or potentialities to scale up the cropped area, but this is conditional on a better access to labour-saving irrigation equipment. This suggests some policy implications, which must be more gender-sensitive, to improve both men’s and women’s ability to manage their productive resource more efficiently. A better access of women to land and to improved irrigation equipment will be a lever to improve women’s economic performance and, consequently, both their own well-being and the whole household’s welfare. The second research question is addressed in Chapter 4. In agriculture, the coexistence of different forms of land tenancy or labour contract have so far been explained by theories related to Marshallian inefficiency, incentives, risk sharing, and transaction costs, including the costs of supervision. These theories and the empirical evidence have greatly contributed to explain the reasons behind land tenancy or labour contract choice. This study goes a step further by focusing particularly on production technologies at plot level. This study provides theoretical and empirical evidence by designing and testing a model based on household profit optimization (i) to compare the optimum profit derived from plots under household labour, a sharecropping labour contract, or a wage labour contract, and (ii) to test the efficiency of the labour choice made, controlling for the irrigation equipment used on the plot. The model does not account for risk behaviour, but focuses mainly on the supervision costs of labour under a wage contract, and on opportunity wages ratios of the sharecropper and the wage worker, of the sharecropper and the landlord, and of the wage worker and the landlord. In order to test the efficiency of the labour contract choice, for each plot, simulations were made to see if another labour contract than presently applied would yield a higher profit to the household. As expected, the results show that the production elasticity of labour decreases when improved irrigation equipment like a motor pump is used. The technology displays an increasing return to scale on plots without a motor pump and a constant return to scale on plots irrigated with a motor pump. While on plots without a motor pump a sharecropping contract is the efficient labour contract choice, leading to a higher optimum profit for household, on plots irrigated with a motor pump, a wage contract is the best labour contract choice. Consequently, we can conclude from this finding that the use of a motor pump drives out the sharecropping contract in favour of household labour and the wage labour contract. Unless the commonly applied sharing rules, 50-50 of the profit, change with a greater share for the landowner, with the increasing use of labour-saving technologies, households will be less and less willing to hire labour under a sharecropping contract. Chapter 5 theoretically and empirically investigates the risk issues. Agricultural production is typically a risky business. Farm households have to tackle several risks. For this reason, farm households’ risk attitude is an important issue connected with decision making and greatly affects their economic performance. In Senegal, for horticultural households, the output market price is one of the foremost risks. Moreover, within the household, husband and wives may behave differently towards risk. This research provides theoretical and empirical evidence regarding the measures and effects of risk attitude on economic performance and on the choice of inputs across gender. More precisely, based on an experimental game implemented in the Senegalese Niayes Zone, this chapter investigates the gender dimension of risk attitude and the causal relationship between risk attitude, allocative inefficiency of the choice of inputs, and decisions regarding the choice of labour contract. The results show that, on average, men and women producers display an absolute risk aversion towards the output market price, and that women are as risk averse as men. As expected, and in line with the theoretical model, the empirical evidence shows that allocative inefficiency in the use of inputs increases with risk aversion. Moreover, the empirical evidence confirms the theoretical model propounding that if producers are more risk averse, they prefer to hire labour based on a sharecropping contract rather than on a wage contract. We identify recommendations for policy decision makers in terms of strategies that may help to make men and women producers more risk-neutral towards the output market price and to dampen the repercussions of risk for efficiency. All in all, this thesis innovatively provides theoretical and empirical evidence to add to the body of the literature of the economics of household resource allocation, with a special focus on gender, labour and risk. In addition to its scientific contribution, the thesis puts forward to decision makers a number of recommendations for a better economic performance of horticultural households with women playing a leading role, as this is in favour of household welfare. Although agricultural growth driven by horticulture is a challenge for economic growth and poverty alleviation, it is potentially achievable.