Browsing by Subject "Productivity"

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Economic analysis and policy implications of wastewater use in agriculture in the central region of Ethiopia
(2008) Weldesilassie, Alebel Bayrau; Dabbert, Stephan
The general objective of this study was to analyze the impact of wastewater use in agriculture. It mainly focused on three aspects of wastewater use for irrigation and their policy implications: impact on crop production and productivity; its impact on the health of farmers; and the value attached to its safe use for irrigation. The main objectives of the study were, therefore, 1) to define the farming system of wastewater farmers and to analyze the impact of wastewater on crop productivity; 2) to analyze the prevalence of the actual health risks to farmers and estimate the health costs associated with the use of wastewater in irrigation; and 3) to estimate the farmer?s willingness to pay for improved or safe use of wastewater for crop production. This study used mainly primary data collected from a household survey conducted on 415 wastewater and freshwater farm households operating irrigated agricultural activities within and around Addis Ababa, a central region of Ethiopia. A Cobb Douglas production function is specified to analyze the impact of wastewater on crop productivity. The production function was estimated using a Censored Least Absolute Deviation (CLAD) econometric model. To analyze the health impact of wastewater, the probability of illness was estimated based on the theory of the utility maximizing behavior of households subject to the conventional farm household production model modified by adding a health production function. The economic value of safe use of wastewater is estimated from data obtained from a contingent valuation survey administered by in-person interviews. A dichotomous choice model is used to elicit the farmers? willingness to pay. Bivariate probit and interval regression models are used to analyze the factors determining the farmers? willingness to pay for safe use of wastewater for crop production. The study shows that the livelihoods of wastewater farm households depend on the wastewater farm. Income from a wastewater farm accounts for 62% of total annual household income, ranging from 27% to 97%. About 61% of the vegetable market of Addis Ababa, the capital city of Ethiopia with more than five million people, is produced from the wastewater farms. Leafy vegetables, which are eaten raw, are mainly produced in less polluted wastewater farms and root vegetables are produced in more polluted wastewater farms. The study revealed that wastewater farm households use significantly less doses of chemical fertilizer compared to the freshwater irrigators. However, they spend three times more on seed and five times more on farm labor. Net farm return per hectare of plots irrigated with wastewater is significantly higher than for plots irrigated with freshwater. The results also indicate that the predicted median output value per hectare is significantly higher in wastewater irrigated plots compared to plots irrigated with freshwater. The CLAD estimation result shows that higher productivity of wastewater plots is explained by investments in inputs (organic fertilizer, improved seed and agricultural extension services), ownership of plots and levels of pollution of the irrigation water. The overall effect of wastewater on crop productivity is negative and insignificant (compared to freshwater). Plots irrigated with less polluted wastewater are more productive than plots irrigated with more polluted wastewater. The implication of the result is that even if wastewater is a reliable source of irrigation water and contains essential plant nutrients such as NPK, the nutrient content exceeds the recommended level of the plant requirement (e.g. nitrogen) or it contains toxic elements (e.g. nickel, zinc) above the recommended limit, and thereby reduce yield. Due to unsafe wastewater irrigation systems, wastewater use in irrigation actually poses health risks to farmers. Apart from working on wastewater farms, different risk factors prevail that can cause wastewater-related diseases in the studied areas. This study shows that major risk factors causing illness are household demographic characteristics, hygienic behavior of farm families and poor access to sanitation services. Lack of awareness on health risk of wastewater as well as working without protective clothing on the farm are also important risk factors in the study area. The distribution of these risk factors varies between the wastewater and freshwater irrigation areas. The most common incidence of illness reported by farm households are intestinal infection due to hookworm and Ascaris, diarrhea and skin diseases, which also varies between the two groups of farmers as well as within the different areas of wastewater. The findings of this study show that the prevalence of illness is not only significantly higher in farmers working on wastewater farms compared to freshwater irrigators, but is also significantly higher in wastewater areas where the pollution level is higher. The probability of being sick with an intestinal illness is 15% higher for wastewater farmers than for freshwater farmers. Use of protective clothing during farm work and awareness of health risks in working on wastewater farms significantly reduce illness prevalence. In addition, hygienic behavior of farm families including eating safe raw vegetables, compound sweeping, and washing hands before a meal are important determinants of illness prevalence in wastewater irrigation areas. Therefore, use and provision of protective clothing at affordable prices, creating awareness for safe use of wastewater, and reducing the pollution level of irrigation water can significantly decrease the health risk of wastewater use in irrigation. While each of these policy interventions has a significant effect in reducing health risks, combining these measures will result in more significant reduction of health risks to farmers, and thereby maximize the benefit from the wastewater resource as a source of livelihood and vegetable supply to the residents of nearby cities. Farmers are willing to contribute money to improve the existing unsafe irrigation system. Two options were suggested by farmers to improve the existing situation: enforcing laws against polluters who discharge their wastewater without any kind of treatment, and awareness creation of safe use of wastewater for irrigation. Farmers are willing to pay for the improvement programs and there is a welfare gain to the society from safe use of wastewater for crop production. The benefit from irrigated-farming, membership to water users? association, yield value, off-farm income and working on a wastewater farm all significantly determine the farmers? probability of accepting offered bids for the improvement program. In addition to these variables, multi-purpose uses of irrigation water as well as education level determines the farmers? willingness to pay. Irrigation method has no significant effect on the farmers? willingness to pay, implying that introducing water saving and improved irrigation techniques has an important role in improving the situation without affecting the farmers? willingness to pay. Overall, this study shows that wastewater is a means of livelihood for many poor households, but the existing use of wastewater for crop production actually causes health risks both to farmers and consumers. Farmers are willing to contribute to programs designed to improve the existing situation so that it is possible to maximize the livelihood benefit at minimum health risks. However, the results do not necessarily imply that the cost of improving the situation has to be borne by the farmers only. Although the study focuses on the central region of Ethiopia, most conclusions can have a wider application in other parts of the country and in many sub-Saharan African countries where wastewater is used for irrigation.
Enhancing individual animal resilience to environmental disturbances to address low productivity in dairy cattle performing in sub-Saharan Africa
(2023) Oloo, Richard D.; Ojango, Julie M. K.; Ekine-Dzivenu, Chinyere C.; Gebreyohanes, Gebregziabher; Mrode, Raphael; Mwai, Okeyo A.; Chagunda, Mizeck G. G.
The current review examines potential solutions to enhance the sustainability and productivity of the dairy sector in sub-Saharan Africa (SSA) with an emphasis on breeding for resilience. Additionally, the paper explores various indicators for measuring resilience and provides insights into the data that can be utilized to quantify resilience in SSA’s dairy production systems. Dairy production contributes significantly to food and nutritional security and employment in SSA. However, besides the general lack of enabling policy and institutional environments, production is negatively affected by environmental challenges such as high temperatures and heat stress, diseases and parasites, unreliable rainfall patterns, shortages of feeds and forages and undue preference for taurine cattle breeds regardless of their poor adaptability to prevailing local conditions. Fostering the resilience capacity of dairy animals is imperative to combat climate-related adversities and maintain productivity. This can only be achieved if reliable and practical methods for quantifying and analyzing resilience in SSA are described and undertaken. This study has reviewed variance of deviations, root mean square of deviations, autocorrelation of deviations, skewness of deviations, slope of the reaction norm and its absolute value as possible indicators of resilience in SSA. While previous research has reported genetic variation and favorable correlations of these indicators with health, fitness, and fertility traits, their potential in SSA environments requires further investigation. Besides, labor- and cost-effective phenotypic data collection is essential for characterization of resilience using these indicators. Through this study, we propose frequently collected data on milk production traits, body fat-related traits, and activity patterns as suitable in the sub-Saharan Africa context. The African Asian Dairy Genetic Gains Project by the International Livestock Research Institute (ILRI) offers a valuable opportunity to collate data from diverse dairy systems in SSA for testing the potential of these indicators. Insights from this study are helpful in improving resilience of dairy animals in SSA, which would contribute to poverty alleviation, animal welfare improvement, and better preparedness in lieu of climate change in SSA.
Ethical banking and finance : a theoretical and empirical framework for the cross-country and inter-bank analysis of efficiency, productivity, and financial performance
(2012) Abu-Alkheil, Ahmad; Burghof, Hans-Peter
Islamic banking is a growing worldwide phenomenon involving a variety of institutions and instruments. Previously, Islamic banks? transactions made up a small part of the total banking industry. Recently, Islamic banks have significantly expanded their network, and have been able to mobilize a large amount of funds and upgrade many economic ventures. Given the unique behavior of Islamic banks and their involvement in both social and economic activities, there has always been a question about their long run financial sustainability, particularly in adverse market conditions. Thus, a reliable and unbiased estimation of Islamic banks?efficiency and productivity performance is essential for the evaluation of Islamic banking operations within and outside its traditional borders of Muslim economies. Due to the short history of Islamic banking in Europe, and consequently the lack of sufficient data, empirical researches on the financial performance of Islamic banking have concentrated primarily in Muslim-majority countries and focused on the theoretical issues and descriptive statistics rather than rigorous statistical and econometric estimation. The main purpose of our analysis is to bridge this gap in the global and cross-country literature and to contribute to the ongoing debate regarding the performance of Islamic banking. Therefore, the orientation of this thesis is chiefly quantitative in nature. The aim of this thesis is primarily to shed some light on the emergence and the continual global growth of Islamic banking all over the world. It also tries to assess, for the first time, the relative performance of Islamic commercial and investment banks operating in Europe against counterparties-conventional banks in Europe and also against Islamic banks from Muslim-majority countries. Our methodology in this academic work clearly differs from the literature researches. This thesis is, basically, divided into two main parts. In first part, we specifically discuss the basic features and principles of the Islamic banking and finance. We then reviewed several in-depth market analysis results concerning Islamic banking and finance that were performed by well-known specialized financial institutions. In the second part, we primarily utilize different empirical approaches to examine the performance of our sample banks which shows a great variety, ranging from large active banks to new and small banks. More specifically, we use the Data Envelopment Analysis (DEA) method to calculate the commercial banks? efficiency scores and investment banks (cost)-X-efficiency levels; the DEA-based Malmq- uist Productivity Index (MPI) to estimate the banks productivity indices; the common financial ratios to measure the banks financial performance; the T-Test to determine the differences of investment bank's performance pre- and post- the financial crisis that hit the world?s economy in 2007; the Ordinary Least Squares (OLS)-regression to determine the impact of internal and external factors on bank's efficiency and also to check the robustness of the overall results obtained from DEA scores; Spearman's rho correlation to investigate the association of the DEA-efficiency scores with the traditional accounting ratios; and eventually the efficiency?profitability matrix in order to determine the characterization of the banks' performance and the factors that influence efficiency. Our analysis is carried out, primarily, over the period from 2005 to 2008. This indeed helps to account for the impact of the recent financial crisis on the efficiency and productivity performance of the selected banks. The preliminary review of the market surveys-based analysis shows that the Islamic finance and banking is one of the fastest growing sectors in the financial world. Islamic financial products and services are increasingly being regarded as a viable investment opportunity, making them very attractive for Muslims and non-Muslims alike. Leading Islamic banks from Muslim countries are expanding their network. Several European banks have directly involved in providing Islamic financial products in order to satisfy the special needs for Muslim customers and the non-Muslims who seek ethical financial and investment solutions. Eventually, European governments have also started to amend their legal, tax, and regulatory systems to allow the establishment of Islamic banks. Most importantly, from an empirical point of view, our presented results suggest that the Islamic commercial banks in Europe are found to be relatively technically inefficient. They have also, on average, poor financial performance and under-performing practices. Moreover, Islamic banks in Europe actually suffer from significant productivity losses over the sample years driven, to a large extent, by the regress in banks? technology innovations. By and large, the bank?s inefficiency stems from both the sub-optimal size of operations and the lack of management knowledge and skills. Findings suggest that the optimal size for Islamic banks to achieve better levels of performance is neither large nor small rather medium. Therefore, increasing banks size through mergers and acquisition will substantially enhance their technical efficiency and productivity progress. The period prior to the current financial crisis was marked by the most stable economic environment for generations. Our results illustrate that Islamic banks lag relatively, before the emergence of the crisis, behind their conventional peers in terms of estimated efficiency scores and productivity changes. Strikingly, conventional banks gradually lose their superiority over Islamic banks in subsequent years, but remain, on average, a head of Islamic banks. Islamic banks are, indeed, less vulnerable to the effects of the crisis as compared with counterparties-conventional banks. They exhibit only slight inefficiency and productivity regress during this severe crisis and therefore, produce a consistent and remarkable positive trend in technical efficiency, productivity performance, and financial profitability. This might be because of the beliefs in the power of petro-dollars in the Gulf region, the fact that the Islamic banks are relatively small and young at present, and could also be due to the religious financial constraints. Such factors might have played an important role in preventing Islamic banks from being severely affected by the crisis. Overall, results suggest that the small and new Islamic banks in Europe can be as efficient and productive as large and old Islamic and conventional banks. They also have long run sustainability, substantial room for improvements, and a great potential in the banking industry to sustain their competitive edge not only in Muslim countries but also in the European financial system. The estimated findings pertaining to the performance of Islamic investment banks in Europe suggest that these banks experience low (cost)-x-efficiency and poor allocative-efficiency compared with counterparties-conventional banks. Bank?s inefficiency is caused largely by the under-utilization of inputs, the bank's diseconomies of scale, and also appears to be due to the regulations not controlled by management due to fluctuations and instability in factor prices. Islamic investment banks additionally show a clear paradox between their high calculated efficiency scores and low achieved profitability ratios. They are also less risky, more solvent, and operate with lower use of debt. Nevertheless, Islamic investment banks suffer a gradual deterioration in liquidity position. The banks' supply of Murabaha (cost-plus loans) financing appears to be most dominant and has increased significantly in importance. Overall, findings seem to reveal that the banks that are technically more efficient are larger in size (total assets), financially more profitable, have greater loans intensity, acquire lower levels of debt, invests more in appropriate human skills, have a lower market share (total deposits), and operate in countries with higher GDP-per capita. Such results reflect the strong and high association between the DEA-efficiency measures and the standard accounting measures, suggesting that the DEA approach can be adopted separately or concurrently along with financial ratios to make comparisons of Islamic banks performance more robust.