Agricultural Economics

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Browsing Agricultural Economics by Subject "Agricultural productivity"

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    Modelling economic-environmental trade-offs of maintaining nitrate pollution standards
    (University of the Free State, 2014-01) Matthews, Nicolette; Grové, B.
    The main objective of this research was to develop the methods and procedures to more accurately quantify the trade-offs between improving production risk and environmental degradation using state-contingent theory to quantify economic and environmental risk with empirical distributions. The first step in developing the economic-environmental trade-offs is to model the risk efficiency of fertiliser applications through the development of a utility maximisation programming model. Separate state-contingent nitrogen maize yield response functions estimated from simulated crop yields for each state of nature characterise production risk empirically. The unexplained variability not captured by the response function is taken into account by adding the residuals to the expected response to produce a stochastic response function. The same procedure quantified the environmental fate of fertiliser applications. An upper partial moment (UPM) ensured that the optimised farmers’ response complied with an environmental pollution goal of 28kg/ha. The upper frequency method (UFM) was developed to ensure a stricter probability bound which was used to determine the conservativeness of the UPM. The results showed that the state-contingent representation of production risk were able to capture the changes in outcome variability without any distributional assumptions. More importantly, fertiliser can act as a risk-reducing input, risk-increasing input or both depending on soil choice while not considering the environment. The risk-reducing nature of fertiliser emphasises the importance of taking risk preferences into account when modelling economicenvironmental trade-offs. The UPM results indicated that an environmental constraint hold substantial compliance costs for agricultural producers. To minimise compliance costs producers had to make extensive and intensive margin changes to ensure compliance. Soil choice is identified as being more important than fertiliser application method in reducing compliance costs. An interesting finding is that environmental compliance resulted in fertiliser being a risk-reducing input. Comparison of the modelling results of the UPM and UFM showed that the UPM is very conservative in estimating the economic-environmental trade-offs. The size of the conservativeness is very situation specific and is determined by the combination of fixed resources used, fertiliser application method, compliance probability and the conservativeness measure used. The main conclusion is that state-contingent theory provides the opportunity to model the impact of management decisions on outcome variability due to the effect of the state of nature in which the production decision is made and not due to the input use decision. The state-contingent theory is therefore the more appropriate mechanism to model the influence of uncertainty on production risk and more importantly environmental risk. The application of the state-contingent theory requires transformation functions, which captures the relationship between management decisions and outcome variability due to the state of nature. Much more research is necessary on the development of appropriate transformation functions.
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    Rethinking blended high yielding seed varieties and partial-organic fertiliser climate smart agriculture practices for productivity and farm income gains in the drylands of Zimbabwe
    (Frontiers, 2022) Musara, Joseph P.; Bahta, Yonas T.; Musemwa, Lovemore; Manzvera, Joseph
    Most blended climate smart agriculture (CSA) technologies focusing on seed-fertilizer combinations have either been marginally adopted or dis-adopted by smallholder farmers due to the nature of design and implementation. A data science research approach was used with 380 households in the mid-Zambezi Valley of Zimbabwe. The study examines impact of adopting a farmer initiated CSA practice combining improved sorghum seed variety and partial-organic fertilizer on household income and productivity among smallholder farmers in the drylands of Zimbabwe. A cross sectional household survey using multi stage sampling with purposive and stratified proportionate approaches was conducted. A structured questionnaire was utilized for data collection. Endogenous Switching Regression (ESR) model was utilized to account for self-selection bias of sampled farmers. Overall, a combination of farm specific factors (arable land, variable costs) and external factors (distance to the market, value of aid) have a bearing on the adoption decision and the associated impact on productivity and income. The counterfactual analysis shows that farmers who adopt the technology are relatively better off in productivity and income. Our findings highlight the significance of improving access to CSA practices which are initiated by the farmers using a bottom-up approach since they suit their operating contexts better. Tailor-made supporting programs including farmer networking platforms and decentralized markets need to be designed and scaled up by policymakers to encourage farmers to adopt blended soil fertility CSA practices in their farming practices. Networking arrangements need to be strengthened through local, government and private sector partnerships along the sorghum value chain.