More than half of Mozambique's population lives below the poverty line and more than a third are malnourished. Poverty and hunger are intrinsically linked to agriculture in Mozambique, a sector dominated by nearly four million smallholder families primarily growing food for themselves. As its government and international donors turn their focus to improving smallholder agriculture and nutrition, it is crucial to understand those farmers' behaviors and how they make production decisions. One such decision--how to allocate land between different crops--changes frequently between years, and there is no evidence as to what drives the changes in that decision. I use household panel data collected in 2008 and 2011 to investigate the determinants of crop diversification. Using fixed effects, I eliminate unobservable village level factors and isolate the change in diversification from year to year. I find that expected crop prices, access to roads and mobile networks, household and farm size are all significant determinants of household level diversity. I employ a two-stage decision model using correlated random effects to explore the recent upsurge in pigeon pea cultivation, finding market prices to be significant predictors of a farmer's decision to plant pigeon peas, while the presence of communication infrastructure in a village increase the amount of land allocated to pigeon peas.
Read
