Farm productivity under financial constraints in developing countries: evidence from maize smallholder farmers in Burkina Faso

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Abstract In this paper, we apply an indirect production function approach to analyze producers’ output and input allocation choices under expenditure constraints. Our estimation results show that financial constraints induced a nonoptimal usage of smallholder farm inputs, resulting in losses in potential productivity of approximately 25%. It appears that the presence of a binding expenditure constraint has led to an underutilization of fertilizer and manure as well as an overutilization of seed.

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