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M‘W‘WWEHQ‘Wilt!“ LIBRARY Mlchlgan State Unlverslty This is to certify that the thesis entitled AGRICULTURAL INVES'I‘MEN'I‘ DECISICNS BY HJRAL HOUSEHOIDS: WHAT ROLE DOES MICRD_CREDIT PLAY? presented by JENNIFER S. BURI‘ has been accepted towards fulfillment of the requirements for MASTER OF SCIENCE degree inAGRICIJL'IURAL AND EXTENSION EIIJCATICN Major professor Date IZ/If/qY 0-7639 MS U is an Affirmative Action/Equal Opportunity Institution PLACE IN RETURN BOX to remove this checkout from your record. TO AVOID FINES return on or before date due. MAY BE RECALLED with earlier due date if requested. DATE DUE DATE DUE DATE DUE JAM 5 m. 1M www.mu AGRICULTURAL INVESTMENT DECISIONS BY RURAL HOUSEHOLDS: WHAT ROLE DOES MICRO-CREDIT PLAY? A CASE STUDY FROM SOUTH-CENTRAL NIGER By Jennifer S. Burt A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural and Extension Education 1997 ABSTRACT AGRICULTURAL INVESTMENT DECISIONS BY RURAL HOUSEHOLDS: WHAT ROLE DOES MICRO-CREDIT PLAY? A CASE STUDY FROM SOUTH-CENTRAL NIGER By Jennifer S. Burt Farmers in Niger, West Africa consider many different variables prior to investing in their farming system. Both environmental as well as human factors affect a resource poor farmer’s decision making process. As it is difficult to control for environmental factors when looking at a farmer’s decision-making process, this research attempts to examine a human factor, access to credit and the impact of micro-credit on a farmer’s investment decisions. This research posits that Nigerien farmers must be first insured of their basic livelihood, such as access to food and shelter, before making capital or labor intensive agricultural investments in the farming system Sixty-five farmers were interviewed in south-central Niger about uses of their farm and non-farm income and the impact of micro-credit on their investment decisions. Borrowers of a rural bank called BRK (Bankin Raya Karkara) and non-borrowers were interviewed, and visits were made to eleven farmer’s fields. Three research methods were used during a two month period to gain insight into Nigerien farmer’s agricultural investment decisions: survey interviews with farmers; semi-structured interviews with key informants; and participant observation. The findings indicated that there was a slightly higher percentage of farmers who received credit investing in capital intensive agricultural technologies than those farmers who did not receive credit. The non-borrower farmers in the research were more likely to practice labor intensive, sustainable agricultural technologies. ACKNOWLEDGMENTS To undertake original research requires a team of people. First and foremost, the sixty-five Nigerien farmers are to be lauded for their patience and understanding in speaking with me in my broken Hausa during the course of the research. Their dignity, pride, and consideration for their families and neighbors are an inspiration to me. Without the assistance of the CARE International Staff in the Maradi office, especially Cherbou Samna, Rekia Abdu, Pascal Marino, and Hainikoye, I would not have been able to accomplish half of what I did in such a Short period of time. My committee chairperson, Dr. Murari Suvedi must be commended and thanked for his persistent support with both my thesis and assistantship. The other committee members, Drs. George Axinn and S. Joseph Levine also deserve an acknowledgment for their practical and scholarly insight into my research topic. Apart from my committee members, I would like to give my most heartful gratitude to those people who stuck with me, day in and day out: my family, Charles, Laura, Kristen, and Elizabeth Burt; and my close friends at Michigan State University, John U. Davis, Beth Dunford, Kimberly York, Christoffel denBiggelaar and Cary Trexler. TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES E: LIST OF ABBREVIATIONS 1. INTRODUCTION TO THE RESEARCH Introduction to research Agra-economic environment of Niger, West Afiica CARE International and BRK, Maradi, Niger Importance of the research Statement of problem Research hypothesis and questions Operational definition of terms Assumptions of the study 2. REVIEW OF RELATED LITERATURE Introduction 15 Non-farm and farm linkages and household food security A system’s approach 17 Physical context 18 Policy and economic contexts 20 Social context 21 Micro-credit’s role in non-farm/farm linkages 24 Theoretical framework 26 3. METHODOLOGY Description and selection of research site: Maradi, Niger 30 BRK in the Maradi department 31 Data collection strategies Rapid appraisal 34 Pro-testing procedures 35 Sampling issues 36 iv Data gathering procedures Interview schedule with farmers 39 Participant observation 40 Semi-structured interviews with key informants 41 Archival research 42 Timetable of research activities 43 Data analysis procedures 44 Limitations of study 45 4. FINDINGS AND DISCUSSION Introduction 46 Description of respondents 47 Farm revenue and the household 49 Non-farm revenue from and for the household 55 Credit obtained from BRK: Amount, Utilities, and Results 60 Inferential statistics: Responses to research questions Research question #1 63 Research question #2 67 Research question #3 69 5. SUMMARY, CONCLUSIONS, and RECOMMENDATIONS Summary 71 Conclusions 74 Recommendations Administration of BRK 76 Other micro-finance institutions 79 Researchers studying the impacts of micro-credit 81 APPENDICES 83 LIST OF REFERENCES 119 LIST OF TABLES Table 1 -Use of farm revenue in the rural, family household (N = 53) 52 Table 2 -Number of animals in the household between men and women 54 Table 3 -Activities indicated by respondents for the non-farm activity (N = 59) 56 Table 4 -Number of markets attended per week (N = 59) 57 Table 5 -Uses of non-farm income in the rural, family household 59 Table 6 -Use of BRK loans (N = 50) 61 Table 7 -Adoption of agricultural improved practices by respondents Table 8 -Use of animal traction by borrower and non-borrower of the BRK 65 Table 9 -Number of goats and Sheep by borrower and non-borrowers 67 Table 10 -Number and size of land holdings by borrowers vs.