Credit constraints and cropland allocation decisions in rural Burkina Faso

Abstract

This paper examined farm households’ cropland allocation decisions under credit constraints in rural Burkina Faso. A fully observed recursive mixed-process model was used to correct for the endogeneity of credit in farm households’ land allocation decisions in a multi-cropping context. Estimating the model with survey data collected in 2011 using the conditional mixed-process estimator, the results showed that credit constraints negatively affect farm households’ decision to allocate land to maize and cotton production in rural Burkina Faso. In contrast, at the expense of maize and cotton, credit constraints encourage farm households to allocate more land to sorghum and millet. The results also showed that socio-demographic characteristics and the use of animal traction significantly determined farm households’ land allocation decisions in rural Burkina Faso.