Off-farm work accounts for a substantial and growing share of household income among smallholder farmers in most of Sub-Saharan Africa, but evidence on the effects of these earnings on farm investments remains sparse. We use panel data from a sample of smallholder farmers in Kenya to estimate input demand for fertilizer, testing the effects of earnings from nonfarm activities, agricultural wage labor on other farms, and combined off-farm sources. We compare effects among three types of crops: a major food staple (maize), and emerging cash crop (vegetables), and a traditional export crop (tea). We find that, holding other factors constant, off-farm work detracts from fertilizer application rates on maize and vegetables. Nonfarm income drives these results. Off-farm work has no effect on fertilizer application to tea. Results suggest competition for household resources between farm and nonfarm sectors, with implications for public investments in rural development as Kenyan smallholders commercialize.


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