Decision-Making and Participation in Labour Markets: The Case of Rural Households of Office du Niger area at Mali

Mali'seconomy is based on the agricultural sector, dominated by small-scale farms, characterised by low productivity and the persistence of low-capital-intensity agriculture, and it is subject to imperfections. Market imperfection often leads to the non-separability between production and consumption decisions. However, the rapid increase in the agricultural population, coupled with the failure of rural markets and the effects of climate change, are today the determining factors in the decline in agricultural productivity of rural households. It poses the challenge of food insecurity inmost developing countries. Today more thana billion people live in food insecurity (IED, 2014).

However, the significant problems that rural households face in developing countries, which need to be solved to understand household behaviour in the labour market, remain, as do how these households make their production and consumption decisions. In the rural market of developing countries, household production and consumption decisions are non-separable (Benjamin, 1992). Otherwise, production and consumption decisions are made independently in rural markets. Households in developing countries frequently confront imperfect or even non-existent markets. Even if the markets exist, transaction costs or quantity constraints (labour markets, credit markets, input markets) prevent them from participating in these markets. When all markets function perfectly, farms with sufficient family labour will transfer their surplus to those with insufficient family labour to maintain production levels. However, when the market does not function perfectly (the main characteristic of developing countries), the household withdraws into itself (autarky). Production and consumption decisions are made instantly. In this case, we find ourselves in subsistence farming (autarky), where the household produces for its own consumption, not for the market. Under this assumption, there will be excess labour on farms, reducing labour productivity per worker. The downward trend in agricultural production (farm profit) per active worker would, in the long term, create a situation of food insecurity and poverty within households. The surplus labour must be transferred to off the farm to compensate for the loss of farm productivity. Due to the necessity for the market to operate effectively, income derived from agriculture needs to be improved to fulfil the requirements of family members. Consequently, family labourers migrate to non-agricultural activities or to the regions where labour remuneration is better.

According to the perfect market hypothesis, households base their decisions on comparative advantage and wages rather than household endowments. Market imperfections generally affect the organisation and use of resources within small farms (Bell, 1988; Conning & Udry, 2007; Ali et al., 2014). However, market imperfections in developing countries affect small-scale farms' production levels and technical efficiency (Stiglitz et Weiss, 1981; Eswaran et Kotwal, 1986; Ma & Abdulai, 2019). However, studies on rural households’ composition give divergent results but are of great interest in agricultural policy formulations. Lopez (1984) rejects the hypothesis of separability between household production and consumption decisions in the case of Canada. Benjamin (1992), in his famous paper on household composition and labour demand in the labour market in India, accepts the separability hypothesis, while Grimard (2000) studies the rural household behaviour in Côte d'Ivoire and rejects the separability notion between production and consumption decisions. De Janvry and Sadoulet (2002) assert that the household participates in the labour market according to its endowment of working time and disposable income. However, it allocates time between leisure, family, and off-farm work. The household hires labour in his farm when it needs it or sells it at the market wage ratew (Benjamin, 1992; Porgo et al., 2017; Ma & Abdulai, 2019) on the labour market. Examination of household involvement in the labour market was approached from various perspectives. (Huffman, 1980; Lopez, 1984; Benjamin et al., 1993; Porgo et al., 2017). Benjamin (1993) divided them into eight different regimes and then analysed the men'sand women'sbehaviour outside the farm. However, in the case of Burkina Faso, Porgo et al. (2017) divided the work into four work regimes and then added a credit constraint to determine the impact of this on the different work regimes. The decision to participate in the labour market was associated with the gender of the household’shead, the farm’ssize, and the household’ssize. We note that farms with too few farm workers employ more salaries labour in their farms than farmers with more workers. In general, the demand for labour depends on the type of crop cultivated by the household. The need for labour evolves according to the type of activity, the crop grown on the plot and the growing season. In Mali and the Office du Niger area, for example, activities such as ploughing, sowing, fertiliser spreading, herbicide use, and plant protection products are generally carried out by family labour. However, transplanting, weeding, and harvesting activities often require external support, as they depend on experience and technical expertise. We also note that the demand for labour is higher during the rainy season than during the low-water period when water levels in the dams are lower. It raises the issue of using family and hired labour in farm activities.