Adjustment Policies, Peasant Household Resource Allocation and Deforestation in Northern Zambia: An Overview and Some Policy Conclusions

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Abstract
Stein Holden, ‘Adjustment Policies, Peasant Household Resource Allocation and Deforestation in Northern Zambia: An Overview and Some Policy Conclusions’, Forum for Development Studies, 1997:1, pp. 117–134. This article gives an overview of effects of adjustment policies on resource use of peasant farm households in northern Zambia. The transaction costs and imperfect information paradigm is used as a basis for the analysis. This research included empirical studies as well as development of models of households and villages. The major policy changes which affected farmers' resource use are removal of input and transportation subsidies in relation to maize production. This has caused a drastic decrease in profitability of maize production and a switch to other forms of production, particularly chitemene shifting cultivation. This has led to more rapid deforestation in areas where the carrying capacity of the system is exceeded. Deforestation in northern Zambia may, however, not result in serious Pareto-relevant externalities in the foreseeable future. Policies should aim for future development of agriculture in areas with good agroclimatic conditions and which are located close to markets and thus having low transaction costs.