Sources of agricultural growth in India: role of diversification towards high-value crops

"This study examines the sources of crop income growth in Indian agriculture over the 1980s and 1990s. Using a method developed by Minot (2003), the analysis decomposes crop income growth into the contribution of yield increases, area expansion, price increases, and diversification from low-value crops to higher-value crops. The results confirm that at the national level, technology (higher yield) was the main source of crop income growth during 1980s, while rising prices and diversification emerged as the dominant sources of growth in agriculture during 1990s. Diversification towards higher-value crops such as fruits and vegetables accounted for about 27% of crop income growth in the 1980s and 31% in the 1990s. However, these national averages hide substantial regional variation. In the grain-dominated northern and eastern regions, price increases were the most important source of growth during 1990s, while in the southern and western regions crop income growth was led by diversification into higher-value crops. The results reflect the slowing growth of wheat and rice yields in India, as well as the growing importance of diversification into higher-value crops. Restoring the growth in grain yields will require investment in agricultural research and development, while facilitating further diversification involves institutional development to better link small farmers with growing markets for high-value commodities. " Author's AbstractCrops, income growth, Agriculture, Grain production, Agricultural research, Research and development, High value commodities, Crop yields, Prices, High-value crops, Decomposition,

INCOME DIVERSIFICATION AND POVERTY REDUCTION IN THE NORTHERN UPLANDS OF VIETNAM

In the context of the economic development, income diversification is sometimes defined as the process by which households switch from growing low-value staple food crops to growing a mix of food crops and higher-value commercial crops (crop diversification) and from farming to non-farm activities (non-farm diversification). The literature on income diversification has measured trends, identified determinants, and speculated on the constraints to diversification, but there has been relatively little analysis of the contribution of diversification to income growth. This paper uses household survey data from 1993 and 1998 to quantify the contribution of crop diversification and non-farm diversification to the growth of household income in the northern upland region of Vietnam. We find that rural incomes have increased substantially over this period, but non-farm income has increased at the same rate as farm income. Poor households are particularly dependent on crop income growth, while higher-income households rely more on non-farm diversification to increase their incomes. Crop diversification has made a non-negligible contribution to rising living standards in the northern uplands, but the contribution of yield growth is substantially greater. Crop income growth among poor households is based heavily on yield increases, while income growth among richer households is associated with area expansion and crop diversification. These results have implications for policies and investment to improve rural living standards.Food Security and Poverty,

Prairie Crop Diversification

The Canadian prairies traditionally have been dominated by spring wheat production. Crop diversification is now being advocated to enhance farm-level risk management, ecological benefits, nutrient cycling, and pest and disease control, and to reduce the farm economy’s reliance on income from a single crop. There has always been interest in diversifying away from wheat, but until recently, economically feasible alternatives have been limited, and government policies may have constrained the shift to other crops. Knowing the impact of prices and policies on crop diversification is essential to understanding producer response and to determining strategies to enhance cropping diversity.Marketing,

Pattern of Agricultural Diversification in India

Agricultural diversification as measured by increase in the percent of non-food crops has grown; whereas diversification as measured by the concentration indices has remained unchanged in the recent decade. There have been significant changes in the pattern of agricultural diversification at the regional level. Within a region, smaller sub-regions or pockets of specialization in certain crops and crop-groups have emerged. Farms do not remain diversified and the usual notion of crop diversification as a risk management practice is also belied in the present study. The study also found certain kind of structural changes in all sub-sectors of agriculture : crop, livestock, and fisheries. Concerns over extreme effects of such changes are however, not valid.agricultural diversification, Agriculture Analysis, India, non-food crops, crop, livestock, and fisheries

Does risk matter for farm businesses? The effect of crop insurance on production and diversification.

We use a large increase in Federal crop insurance subsidies as a natural experiment to identify the impact of risk on acreage and diversification decisions. Subsidy increases induced greater crop insurance coverage, which reduced farmers' financial risks. Did this change in the risk environment alter production decisions? We merged crop insurance participation data with farm-level Agricultural Census data from 1992 and 1997 to examine how harvested acreage and diversification changed in response to the policy-induced change in insurance coverage. The difference in differences empirical approach controls for unobservable heterogeneity and our results are robust across multiple definitions of our key variables and various fixed effects. We find that changes in the risk environment caused larger farms to expand while smaller farms shrank. Regardless of size, producers showed some evidence of using diversification as a method to mitigate risk. However, risk does not seem to have large overall effects.Risk and Uncertainty,

Combination of Spatial and Temporal Diversification in European Cropping Systems

There is a lack of results on the advantages and limitations of combining different crop diversification strategies both in time and space, which makes it difficult for famers and advisers to find relevant information for the transition towards more diversified cropping systems. A network of ten field experiments (diverIMPACTS project) was built across seven European countries, covering a range of pedo-climatic conditions and different farming systems: arable and vegetable systems under both conventional and organic management. Each field experiment tests one or several diversified cropping systems, which combine three diversification strategies with low input practices. These diversified cropping systems are compared to reference systems, which are less diversified and more dependent on external inputs. The three strategies of crop diversification are rotation, multiple cropping (growing different crop species on the same land within one growing season) and intercropping (growing different species in proximity on the same field). A diversified system includes, for example, the addition of cover crops or cash crops, such as legumes, for their expected ecosystem services, or crops for new markets (e.g hemp, lentil), the use of multiple cropping to increase productivity per year (e.g. winter barley with soybean) and intercropping (e.g. barley/pea,wheat/faba bean, oat/lupin) to increase productivity per unit of area and reduce external inputs. Expected impacts include: higher arable land productivity, diversification and increased farmer revenues through access to new markets and reduced economic risk, lower environmental impact through reduced use of pesticides, chemical fertilisers, energy and water, and improved delivery of ecosystem services, including biodiversity. The diversified cropping systems will be assessed using standardized measurements across the network and multi-criteria assessment tools. Decisions regarding the design and management of the diversified cropping systems will be recorded to support other diversification initiatives. The year 2018 is the first year of the network. This paper presents the original approach, the strategies designed in the network, and the assumptions concerning the interests to combine temporal and spatial diversification in order to improve the delivery of multiple services. This network will be a source of inspiration for other initiatives of crop diversification in Europe. The ultimate goal is to guide farmers in their transition towards more diversified cropping systems and to promote innovations by various actors at different scales (e.g. innovations regarding machinery for sowing or harvesting new sole or mixed crops, value-chains through the consolidation of new markets, new process of transformation, or adaptation of value-chains to intercropping)

DIVERSIFICATION ECONOMIES AND SPECIALISATION EFFICIENCIES IN A MIXED FOOD AND COFFEE SMALLHOLDER FARMING SYSTEM IN PAPUA NEW GUINEA

Smallholder farming systems in Papua New Guinea are characterised by an integrated set of cash cropping and subsistence food cropping activities. In the Highlands provinces, the subsistence food crop sub-system is dominated by sweet potato production. Coffee dominates the cash cropping sub-system, but a limited number of food crops are also grown for cash sale. The dynamics between sub-systems can influence the scope for complementarity between, and technical efficiency of, their operations, especially in light of the seasonality of demand for household labour and management inputs within the farming system. A crucial element of these dynamic processes is diversification into commercial agricultural production, which can influence factor productivity and the efficiency of crop production where smallholders maintain a strong production base in subsistence foods. Data are used on coffee and food crop production for 18 households in the Benabena district of Eastern Highlands Province to derive technical efficiency indices for each household over two years. A stochastic input distance function approach is used to establish whether diversification economies exist and whether specialisation in coffee, subsistence food or cash food production significantly influences technical efficiency on the sampled smallholdings. Diversification economies are weakly evident between subsistence food production and both coffee and cash food production, but diseconomies of diversification are discerned between coffee and cash food production. A number of factors are tested for their effects on technical efficiency. Significant technical efficiency gains are made from diversification among broad cropping activities.Farm Management,

Whether crop diversification is a desired strategy for agricultural growth in Bangladesh?

This study aimed at examining the merit of crop diversification as a strategy for agricultural growth in Bangladesh. Specifically, the existence of economies of diversification, scale economies and diversification efficiencies at the farm level were examined using a stochastic input-distance function approach. The results reveal strong evidence of diversification economies amongst most crop enterprises except the combination of modern rice and modern wheat enterprises. Ray economies of scale exist in Bangladeshi cropping system. Also, significant are efficiency gains made from diversification among cropping enterprises. The key policy implication is that crop diversification should be a desired strategy for agricultural growth in Bangladesh. Development of the rural infrastructure is also essential as this will not only improve technical efficiency but may also synergistically promote crop diversification by opening up opportunities for technology diffusion, marketing, storage and resource supplies. © 2009 Elsevier Ltd. All rights reserved

The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data

Block and Webb (2001) in food policy address the issue of the dynamics of livelihood diversification in Ethiopia. Their study uses the ratio of per capita income derived from crops to the sum of all other incomes as an indicator of livelihood diversification for the years 1989 and 1994. Their study focuses only on drought-prone areas during the survey years. The aim of the present study is to explore further the demographic and economic determinants of the dynamics of income diversification using survey data. The data used in this study cover larger and more representative sample and was colleted from rural Ethiopia during 1994 and 1997 harvest years. This study investigates not only the determinants of participation and intensity of off-farm activities, but also factors that affect the dynamics between 1994 and 1997. The results of this study attempt to answer the question: to what extent initial conditions (for instance, asset holdings, production, and crop income) prompt households to diversify to off-farm activities overtime. The results show that participation in off-farm activities is mainly driven by demographic factors, whereas land and other asset ownership as well as crop production and income affect intensity of off-farm activities. The dynamic model results show that farm families who have initially diversified to more off-farm activities subsequently realized less income diversification. Families with more initial crop production from slack harvest season subsequently realized greater income from off-farm activities in 1997. The study also confirms that it is only during slack harvest season that off-farm and on-farm activities are complement each other.Dynamic Livelihood, Off-farm Income, Diversification, Ethiopia

Use of a Crop Simulation Model to Provide Long-Term Data for Economic Analysis: the Case of Early Maturing Soybeans

A target MOTAD model is used to investigate incorporation of early maturing soybeans by a crop farm in southeastern Kansas. Weather (WGEN) and crop simulation (SOYGRO) models are used to generate a long-term series of soybean yields. Results indicate that early maturing soybeans offer a risk-reducing diversification strategy.Crop Production/Industries, Farm Management,