Informal Cattle Rental Markets as a Source of Draft Power: Productivity Gains, Allocative Efficiency, and Constraints among Maize Farmers in Zambia

Despite the potential productivity gains from using draft animals in African agriculture, evidence on the role of cattle rental markets in household production remains scarce. This study examines whether rental markets for draft cattle used in land preparation improve borrower productivity and promote efficient factor allocation, using household survey data from maize farmers in rural Zambia. The results show that cattle borrowers achieve approximately 47% lower maize yields than cattle owners, primarily due to greater production intensification among owners. In contrast, yield differences between borrowers and hand-hoe users are insignificant, suggesting frictions that inhibit efficient allocation. Consistent with this interpretation, less productive farmers are more likely to borrow cattle without payment, indicating that unpaid cattle borrowing serves as a form of social support within agrarian communities. Further analysis shows that both the allocative-efficiency benefits of paid rental and the social-support function of unpaid borrowing are concentrated among farmers located near the village center. Overall, the dual functions of informal cattle rental markets-promoting allocative efficiency and providing social support-are spatially constrained.