The methodologies of the studies - Institutional Constraints to Small Farmer Development in Southern Africa - page 299

Appendix - The methodologies of the studies

A.1 Introduction

The three component studies implemented under the FIRCOP Project No. 6 were framed
around the central goals of defining and understanding the sampling frame and identifying the
key institutional constraints to smallholder market access. One study was therefore designed
in such a way as to determine the baseline status of the sample in terms of occupational and
employment patterns and livelihoods strategies. The results of that study were expected to
facilitate the determination of the design parameters for the constraints studies. The study
on the welfare and incentive effects of maize market deregulation was conducted using
the partial equilibrium model based on the Policy Analysis Matrix (PAM). The Natural
Resource Management study employed the Institutional Analysis and Development (IAD)
framework and this has already been discussed in the relevant chapter of the topic. hese
various methods relevant to the other chapters are described in this section.

A.2 Model for baseline-related study

One organizing conceptual principle for understanding household livelihoods strategies is
based on the household model which relates poverty measurements to household resource
use patterns. The simplest starting point is the utility maximizing scenario which can be
depicted by a general participation function of the form:

Y j = f (u, k, i) (A.1)

where:
Y j = household participation in activity j ;
u = capacities;
k = incentives;
i = institutions.

This function is derived from similar analysis by De Janvry and Sadoulet (2001) and Sanchez
(2005). According to De Janvry et al. (2005), two major categories of factors determine a
rural household's economic participation decision: first, the factors that affect the relative
returns and risks of participation (incentives); second, the factors that determine the capacity
to economic participation, namely, capacities, such as education, asset endowments, etc.
Any factor that positions agriculture as a risky or low return activity increases participation
in non-farm activities, and vice versa. Factors increasing risk or reducing returns in non-
farm enterprises increase households' participation in farming. This can only be possible if
the required capacities to participate in these activities are available to a household.