SIERRA LEONE maq 4ª.indd - agrilife - Europa
SIERRA LEONE maq 4ª.indd - agrilife - Europa
SIERRA LEONE maq 4ª.indd - agrilife - Europa
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stock or exchanges at the village level. Since own<br />
stocks are accounted in the output value and since<br />
exchanges imply a cost that is even for both parts,<br />
this means that for the measurement of variable<br />
costs seeds must be taken into account for their<br />
entire value independently of whether cash was<br />
involved in the transaction or not. Consequently,<br />
seeds are calculated in the same manner under<br />
both income calculation approaches. However,<br />
in the cash income calculation it is taken into<br />
account that approximately ¼ of seeds were<br />
acquired without entering into a monetary<br />
exchange. Livestock purchases were valued at<br />
market price (as reported in the survey) under<br />
both income calculation approaches.<br />
Fixed costs were calculated for tools and<br />
land rent. The cost of tools was calculated on<br />
the basis of a linear depreciation of their market<br />
value over the number of years it has been<br />
utilised by smallholders. Land rent payment is<br />
usually made in the form of a token which is a<br />
part of the harvested output (FAO, 1999).<br />
In the discussion of results, these two<br />
approaches are used for calculating Farm Net<br />
Income. FNI-NA is the income calculation based<br />
on Neoclassical Approach (NA) principles of<br />
complete markets and FNI-PF is based on the<br />
assumption that Peasant Farming (PF) relies on a<br />
partial integration to the market economy and faces<br />
incomplete market. Quantitative evidence suggests<br />
that the latter approach is closer to the context in<br />
which farm households produce and interact.<br />
Reproduction Threshold<br />
The Reproduction Threshold (RT) 35 is<br />
introduced as a benchmark for assessing the<br />
economic viability of different farming or<br />
production systems. For farm households, the<br />
RT is the minimum output/revenue level per<br />
Household Working Unit (hhWU) below which<br />
farmers are unable to adequately pay for all inputs<br />
35 Refer to FAO (1999) for wider definitions of the<br />
Reproduction Threshold of a farming system.<br />
and to completely restore capital productivity in<br />
order to begin a new production cycle. Without<br />
any additional outside-farming income, farms<br />
can survive in the short run either by underpaying<br />
the labour and/or by not replacing the capital<br />
depreciation, but in the medium-to-long run such<br />
survival strategies will inevitably exclude some<br />
farms from the market. RT is strongly affected<br />
by national economic policies, international<br />
trade etc., and producers have very little hope<br />
of influencing. These thresholds can also differ<br />
by region. The macro-economic changes that<br />
have no immediate relationship with local farm<br />
production systems can completely modify<br />
thresholds and turn well-off producers into<br />
deprived ones.<br />
Since farm net income is a micro-economic<br />
indicator, and the minimum acceptable income<br />
(RT) needs to be determined separately for each<br />
region by taking into consideration the general<br />
economic and social situation, the difference<br />
between these elements can link the farms’<br />
economic performance to the prevailing regionaland<br />
macro-economic and social conditions.<br />
For the two regions, two different<br />
Reproduction Thresholds were identified. For<br />
the Northern region, where farms have hardly<br />
any opportunity work off-farm, it was assumed<br />
that the Reproduction Threshold is equal to<br />
zero Farm Net Income per household working<br />
unit (RT north). For the Eastern region, where<br />
some alternative work can be found outside the<br />
farm, the opportunity wage was defined as the<br />
minimum agricultural wage from off-farm work<br />
(RT east) attainable locally, therefore set to be<br />
equal to 700000 Leones36 of Farm Net Income<br />
per household working unit.<br />
A positive difference between NFI and RT<br />
(RT north as well as RT east) indicates that the<br />
36 The approximate days of the working opportunity outside<br />
the farms were assumed at around 60 - 100 working days<br />
per year (the average collection period for coffee cherries<br />
and cocoa pods) (Source HIS 2003/04).<br />
Rural poverty reduction and food security: The case of smallholders in Sierra Leone<br />
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