Hybrid Seed and the Economic Well-Being of Smallholder Maize Farmers in Zambia

The development and diffusion of hybrid maize in Zambia since the 1970s is a major achievement in African agriculture, but other than profitability studies, analyses of how this process has affected the economic well-being of smallholder farmers have been few. We test the relationship of hybrid seed use with six indicators of economic well-being. After using the control function/instrumental variables approach to test for the endogeneity of hybrid seed use, we estimate correlated random effects (CRE) fractional response, CRE Tobit, and fixed effects models with a panel of nationally representative data collected in 2002/3 and 2006/7. Findings suggest that use of maize hybrids is associated with higher values of household income, assets, farm and processing equipment, and livestock, and less deprivation compared to other farmers in nearby villages.