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1. Public Transfers and Subsistence Producer Disincentives in Botswana

Author:
Tebogo B. Seleka and Khaufelo R. Lekobane
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This paper investigates the disincentive effects of public transfers on subsistence producers in Botswana. Comparative statics analyses indicate that public transfers would not affect farm production when profit and utility maximization decisions are recursive, with the profit maximization decision made first. However, when such decisions are interdependent, public transfers would lead to a reduction in farm output. Empirical results reveal that social pensions have impacted positively on cultivated area, but have had no impact on cereal yields and output. However, government food rations have impacted adversely on cultivated area, yields and output; they are a disincentive to crop production because they are relatively more sizable, consistent and certain. This, it is argued, is because food packages are directly substitutable for subsistence crop production. Therefore, public policy in Botswana should consider moving away from food to cash transfers to minimize such disincentive effects.
Topic:
Agriculture, Welfare, Safety Net, Work, and Public Transfers
Political Geography:
Africa and Botswana

2. Do Public Transfers Discourage Farmer Participation in Subsistence Crop Production? Empirical Evidence from Botswana

Author:
Khaufelo R. Lekobane and Tebogo B. Seleka
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
We analyze the impact of public food and cash transfers on farmer participation in Botswana’s subsistence arable agriculture. The results indicate that publicly provided social pensions and food packages (rations) reduce the probability of participation in subsistence crop farming. Engagement in paid off-farm employment, which is sometimes facilitated through a public works programme (PWP), also discourages farmer participation in the subsistence economy. Therefore, public food and cash transfers and the PWP yield work disincentive effects in Botswana’s subsistence agriculture. This is because transfers are usually consistent and regular in Botswana, impacting on household behaviour. The design of social protection policies should therefore consider such potential disincentive effects on the agricultural sector.
Topic:
Agriculture, Poverty, Labor Issues, Farming, Safety Net, Cash Transfers, and Dependency
Political Geography:
Africa and Botswana