Nutrition Demand, Subsistence Farming, and Agricultural Productivity

Stepan Gordeev

This project has been retired

Small Research Grant (PhD)

Economic growth in low-income countries is strongly connected to subsistence farming decisions. Instead of producing as efficiently as possible to sell food, subsistence farmers produce based on familial dietary needs. These personal requirements can impact farming decisions including quantity and products, rather that decisions being dictated by efficiency and productivity concerns. Often, this type of situation arises in the presence of extreme market frictions when trading, selling, and purchasing goods is more difficult than it is worth. In this scenario, it is necessary to self-produce all required goods. This project examines to what extent farming production decisions are influence by subsistence requirements in the context of Malawi.

A government survey of food consumption and nutrition at the household level is the basis of the project’s analysis. This is combined with food composition tables (to evaluate the energy and nutrient intakes of households and the caloric densities of agricultural products) and recommended energy and nutrient intakes. Using these data, the relationship between the observable characteristics of household food consumption and the product choice on the household’s farm is modelled. The key element of the model is a penalty that the household bears if insufficient calories are consumed. Poor farmers are calorically constrained and concentrate their consumption and production in the most efficient sources of calories. Richer farmers are less calorically constrained and can afford to diversify their diet, which they can achieve by diversifying production. Satisfying their nutritional needs, they can afford to reallocate resources towards procuring the manufactured good, which they achieve by specializing in the revenue-maximizing good. This model reflects empirical findings that models with more traditional preference setups would be silent on.

Large farms which produce for the market tend to be highly successful due to a high level of efficiency through specialisation and a low level of competition. Yet, there remains a large quantity of subsistence farmers in Malawi who produce mainly or entirely for self-consumption, particularly in contexts where markets are not well developed or accessible. These farmers decide on products based on caloric and nutritional needs rather than specialisation. This decreases overall agricultural productivity, and therefore slows potential economic growth. Policies such as reducing trade frictions, estimated as a counterfactual in this project, can assist farmers in leaving subsistence production and moving towards market specialisation without any change to the underlying agricultural technology. This could be extremely impactful across sub-Saharan Africa.

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