factors impacting adoption of organic farming in … impacting adoption of organic farming in...

Factors Impacting Adoption of Organic Farming in Chitwan District of Nepal

Mrinila SINGH (PhD), Bijan MASKEY & Prof. Keshav Lall MAHARJAN

Graduate School for International Development and Cooperation (IDEC) Hiroshima University, Japan

Regional Conference on Marketing & Innovation in Organic Farming Goesan County, South Korea

October 2, 2015

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Outline 1. Introduction 2. Literature review 3. Research design 4. Result & Discussion 5. Conclusion & Recommendation 6. References

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1. Introduction

1.1 Background

• Agriculture in Nepal - 36% to Gross Domestic Product (GDP) (MoAD, 2015)

• Government prioritizes agricultural commercialization for economic growth (Samriddhi, 2011; Tamang, Dhital, & Acharya, 2011)

• Use of agro-chemicals declined soil fertility and yield, impacted environment and health of farmers (Bhatta, 2010; Bhatta & Doppler, 2010; Shrestha, 2010; Shrestha & Neupane, 2002; KC, 2006; Vaidya et al., 2008; Weiss, 2004)

•  To tackle above issues, organic movement reinforced in 1986 (Bhatta & Doppler, 2010; Nepal, 2011;

Sharma, 2005; Weiss, 2004) and growing gradually in Nepal (Adhikari, 2011)

•  In 2007, `National Standards of Organic Agriculture Production and Processing` enacted

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1.2 Problem statement • Organic farming, sustainable approach to conventional farming (IFOAM, 2008)

•  healthy lifestyle •  adapt, mitigate and resilient to climate change •  improves soil fertility •  self-dependence •  diversification as safety against shocks (Scialabba, 2007)

•  In 2013, organic share only 0.2% of total agricultural land (lower compared to global share of 0.98%) (FiBL & IFOAM, 2015)

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Contd…

Contd…

1.3 Study rationale • Organic sector characterized by limited data, market information and research based

activities (Bhatta, Doppler, & KC, 2009; Pokhrel & Pant, 2009)

•  Impact at household level lacking (Bhatta, 2010)

• Comparison of farming methods provide better insight on related issues •  Local level studies necessary - differing impact of same component (Adesope et al., 2011;

Alexopoulosa et al., 2010; Akinola & Owombo, 2012; Adolwa et al. 2010; Adil, Badar, & Sher, 2004; Bizimana, 2013; Gauchan, et al., 2005; Khaledi et al., 2011; Kafle, 2011b; Mugwe et al., 2009; Mahmudul, Ishida, & Taniguchi, 2003; Pandey, 2013; Parvin & Akteruzzaman, 2012; Rehima et al., 2013; Weir, 1999)

•  1.4 Study objective • Determine factors impacting adoption of organic compared to conventional farming

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Potentiality of organic farming in Nepal

•  Easy conversion – high mountain and middle mountain areas `organic by default`; lower chemical fertilizer usage/hectare (Pokhrel & Pant, 2009; KC, 2006; Joshi, 2010; Vaidya, Shrestha, & Wallander, 2008)

•  Ecological richness – diverse crops produced organically (Pokhrel & Pant, 2009; DoAE, 2006; Tamang, Dhital, & Acharya, 2011)

•  Member of World Trade Organization (WTO) – organic as potential export crop (Bhandari, 2006; Pant, 2006)

•  Rise in export + domestic market (FiBL & IFOAM, 2009; FiBL & IFOAM, 2010; Pokhrel & Pant, 2009; DoAE, 2006; Tamang, Dhital, & Acharya, 2011)

•  Labor availability – 66% employed in agriculture (MoAD, 2015)

•  Exclude expensive fertilizer import (Rahija, Shrestha, & Stads, 2011)

•  Climate change (MoE, 2011)

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2. Literature review

Contd… Adoption strategies

•  In any adoption studies of agricultural innovations, socioeconomic characteristics as important as agro-ecological variables and farmers’ perception (Kafle, 2010)

• Organic farming adoption in relation to socioeconomic characteristics context-specific (Adesope et al., 2011; Alexopoulosa, Koutsouris, & Tzouramani, 2010; Halberg, Alroe, Knudsen, & Kristensen, 2006; Kafle, 2011a; Kafle 2011b; Khaledi et al., 2011; Kallas et al., 2009; Pattanapant & Shivakoti, 2009)

•  Study of livelihood assets’ impact on farming method adoption only in 1 out of 3 Village Development Committees (VDCs, lowest administrative in Nepal) in study areas (Kafle 2011a; 2011b)

• Necessary to identify factors encouraging or deterring adoption for policy implication

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Figure 1 Map of Nepal Source: Government of Nepal (http://reliefweb.int/map/nepal/nepal-ecological-zone-map-2000)

Figure 2 Map of Chitwan district Source: NEWAH M&E MIS Division as cited in www.newah.org.np/map/Chitwan

3 Research design 3.1 Study area

Initiated by few enthusiast farmers and intensified by non-governmental organizations (NGOs) through (Table 1) Group Formation:

Source: Field survey (2013)

• Group activities: Training (bio-fertilizers and pesticides), market promotion and network development, pamphlets on Plant Health and Clinic Initiative, hoarding boards for awareness, resource center, FFS, technology development and transfer, and other extension services (SECARD-Nepal, 2011)

*FFS: learning-by-doing - weekly assessment from crop plantation till harvest – experiment various organic means (farm yard manure, bio-pesticides, mulching, etc.) - discuss (inputs, pest/disease/weed problems,management and production) - up to 16 weeks/crop – follow most successful method in practice

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Contd…

Group features VDCs

Phoolbari Shivanagar Mangalpur (I)

Mangalpur (II)

Mangalpur (III)

Group type Cooperative Informal Informal Informal Informal Established (year) 2005 2010 2010 2011 2011 Members: 125 44 30 30 30 Farmers Field School (FFS*) (times) 13 6 2 1 1 Certified Twice Never Never Never Never Member saving and loan facility Yes Yes Yes Yes Yes

Figure 3 Types of farming methods in study areas Source: Field survey (2013)

Farming methods

Conventional farming

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Exclusion of all chemical fertilizers and pesticides

Land or crop segregation for organic and conventional practice (contain pests/weeds/diseases, intensify production): §  Organic vegetable farming (small area); chemical fertilizers and pesticides on cereal crops (larger area); §  Chemical pesticides (potato, tomato and kidney bean spinach, cow pea and mustard greens); chemical fertilizers (rice, maize, wheat, oat and mustard) – inconsistent crop varieties §  Conventional means for commercially valued crops (cereals, carrot, kidney bean) for easier management

Contd…

Organic farming

3.2 Source of data •  Survey period: February-March, 2013; October-November, 2014

• Household (HH) data •  300 HHs

•  Semi-structured questionnaire •  Participatory methods

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Contd…

Stratified random sampling Group and non-group

members

Focus group discussions

Key informant interview

Phoolbari-3, Shivanagar-1, Mangalpur-3

Government and non-government officials, certifiers, traders, retailers and local

leaders

Figure 4 Respondents’ distribution among VDCs, group membership and farming methods Source: Field survey (2013) Note: OF-Organic farmer, CF-Commercial farmer, M-Member, NM-Non-member

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Total respondents N=300

NM n=68 (45)

CF n=30 (36)

OF n=53 (64)

Shivanagar VDC n=52 (17)

Phoolbari VDC n=151 (50)

Mangalpur VDC n=97 (33)

M n= 83 (55)

M n=18 (35)

NM n=34 (65)

NM n=58 (60)

M n=39 (40)

OF n=11 (16)

CF n=57 (84)

OF n=6 (33)

CF n=12 (67)

CF n=25 (74)

OF n=9 (26)

CF n=27 (69)

OF n=12 (31)

OF n=4 (7)

CF n=54 (93)

Contd… 3.3 Empirical model

Bivariate Probit model can be expressed as: 𝑦↓𝑖↑∗  = β$↓0  + 𝑥↓𝑖 β$↓𝑖  + ε↓𝑖  𝑦↓𝑖  = {█■ 1 if 𝑦↓𝑖↑∗ >0 0 otherwise  

... (1) where,

i = number of observations, y* = unobservable latent variable, y = binary variable of whether farmer is adopting organic farming or not, x = explanatory variables, β$↓0  = coefficient of intercept, 𝛽 = parameter to be estimated, and ε = normally distributed error term

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Marginal effect for probit model: 𝜕P /𝜕𝑥↓𝑖  = φ (x↓i β) β ... (2)

where, 𝜕P=partial derivative of probability that y↓i =1 with respect to 𝑥↓𝑖  φ is distribution function for standard normal random variable Empirical specification:

y∗= β↓0 + β↓1 ageHHH+ β↓2 HHHprimary_occu+ β↓3 LSU+β↓4 ln_nonfarm_income+ β↓5 membership+β↓6 org_training+β↓7 agrovet+ β↓8 market+ β↓9 commercialization + ε … (3)

where ln is natural logarithm Diagnostic tests • No multicollinearity (VIF and correlation matrix) (Annex I & II) • Robust standard errors to correct for the presence of heteroscedasticity (Wooldridge, 2006)

•  T-test to analyze differentiating factors in Phoolbari VDC compared to other VDCs (Annex III)

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Contd…

4. Result and discussion Table 2. Result from Bivariate Probit Model

Note: *** 1% and * at 10% level of significance Number of observations = 285 Wald χ2 (10) = 72.25 Prob > χ2 = 0.0000*** Log pseudo likelihood = -133.84074 Pseudo R2 = 0.2502

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Variables Probit model Marginal effect Coefficient P-value HHHage -0.01 0.087* -0.005 HHHprimary_occu 0.16 0.446 0.05 LSU 0.09 0.094* 0.03 ln_nonfarm_income 0.03 0.161 0.01 membership 0.33 0.143 0.11 org_training 0.31 0.000*** 0.11 VDC 0.56 0.005*** 0.19 agrovet -0.11 0.086* -0.04 market 0.02 0.598 0.01 commercialization -0.18 0.254 -0.06 constant -0.96 0.041

Contd… • With age, supply labor diminishes and since benefit materializes only after few years

of conversion, older farmers are less willing as they will be retired soon • Livestock holding supplies manure for soil fertilizing • Membership gives opportunity to generate knowledge and share information through

interaction but does not exclusively result in adoption of organic farming

Table 3 Farming practice after group formation

Source: Field survey (2013, 2014) Note: Figure in parenthesis indicate column percentage *Minimum land area to be group member

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Farming status of member farmers after group formation

Respondents Total (n=140) Organic (n=71) Conventional (n=69)

Changed to organic farming through group 52 (73.24) - 52 (37.14) Same as before 19 (26.76) 26 (37.68) 45 (32.14)

Later changed to conventional farming - 19 (27.54) 19 (13.57) Organic farming area ≥ 0.0676 ha* - 24 (34.78) 24 (17.14)

Contd… Advantages of being a group member

• Health consciousness (grow same crop organically for home consumption and conventionally for market sell)

•  Full or partial assistance (seeds, bio pesticides container, water pump, compost shed, push-cart, tractor, certification, etc.)

Strains within the group

•  unequal distribution of assistance vs. active participation •  less saving interest rate •  unequal advantage of premium market (not aware of newly established local specialized

markets – Field survey, 2014) •  penalty for membership termination

Stakes of being a member

•  Phoolbari VDC well known among various stakeholders (NGOs, GO, researchers, students, tourists, journalists etc.)

•  Farmers’ hesitation in telling truth when relying on chemical inputs •  Farming organically on ≥ 0.0676 ha

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Contd…

• Training (by academicians, NGOs, government organization (GO), certifiers) plays important role in adoption of organic farming

• Group in Phoolbari VDC established earlier, has conducted more trainings and other unobserved variables

•  In addition to chemical fertilizers and pesticides, agrovets also offer commercially available packaged bio-fertilizers and bio-pesticides

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5. Conclusion & recommendation For increasing probability of adopting organic farming:

•  Introducing to households with higher livestock holding

• Older farmers less prioritized as their capacity to supply labor diminishes and benefit materializes only after few years of conversion, thus diminishing their enthusiasm

• Group formation an efficient tool to introduce organic farming on larger scale, but comes with various other challenges of unequal member participation in group activities and benefit entitlement by each member

•  Linking with specialized shops which have recently commenced in local area can accommodate selling produces from more farmers

•  Training complements the technical knowledge required

•  Importance of commercially available organic inputs cannot be underestimated

•  Shivanagar and Mangalpur VDCs should be prioritized

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Thank you for your attention!

6. References •  Adesope, O., Matthews-Njoku, E., Oguzor, N., & Ugwuja, V. (2011). Effect of socio-economic characteristics of

farmers on their adoption of organic farming practices. In P. Sharma, & V. Abrol (Eds.), Crop Production Technologies (pp. 211-220). Rijeka, Croatia: InTech.

•  Adhikari, R. K. (2011). Economics of organic rice production. The Journal of Agriculture and Environment, 12, 97-103.

•  Adil, S. A., Badar, H., & Sher, T. (2004). Factors Affecting Gross Income of Small Farmers in District Jhang-Pakistan. Pakistan Journal of Life and Social Sciences, 2(2), 153-155.

•  Adolwa, I. S., Esilaba, A. O., Okoth, P., & Mulwa, M. R. (2010). Factors influencing untake of integrated soil fertility managment knowledge among smallholder farmers in Wastern Kenya. 12th KARI Biennial Scientific Conference: Transforming agriculture for improved livelihoods through agricultural product value chains (pp. 1146-1152). Nairobi, Kenya: Africa Soil Information Service (AfSIS).

•  Akinola, A., & Owombo, P. (2012). Economic analysis of adoption of mulching technology in yam production in Osun State, Nigeria. International Journal of Agriculture and Forestry, 2(1), 1-6.

•  Alexopoulosa, G., Koutsouris, A., & Tzouramani, I. (2010). Should I stay or should I go? Factors affecting farmers’ decision to convert to organic farming or to abandon it.

•  Bhandari, D. R. (2006). Community level organic vegetable production program: An experience of Kathmandu district. Proceedings of a First National Workshop on Organic Farming (pp. 82-95). Hariharbhawan, Lalitpur, Nepal: Directorate of Agriculture Extension.

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Contd… •  Bhatta, G. D. (2010). Stakeholder and spatial perspectives of organic farming in Nepal. Deutschland: LAP

LAMBERT Academic Publishing. •  Bhatta, G. D., & Doppler, W. (2010). Socio-economic and environmental aspects of farming practices in the peri-

urban hinterlands of Nepal. The Journal of Environment and Agriculture, 11, 26-39. •  Bhatta, G. D., Doppler, W., & KC, K. B. (2009). Potentials of Organic Agriculture in Nepal. The Journal of

Agriculture and Environment, 10, 1-11. •  Bizimana, C. (2013, January). Strategies for improving adoption of soil-fertility technologies in Rwanda. Regional

Strategic Analysis and Knowledge Support method (ReSAKSS)(19), pp. 1-7. •  DoAE. (2006). Proceedings of a First National Workshop on Organic Farming. Hariharbhawan, Lalitpur:

Directorate of Agriculture Extension (DoAE). •  FiBL & IFOAM. (2009). The world of organic agriculture: Statistics and emerging trends. Frick and Bonn:

Research Institute of Organic Agriculture (FiBL) and International Federation of Organic Agriculture Movements (IFOAM).

•  FiBL & IFOAM. (2010). The world of organic agriculture: Statistics and emerging trends. Frick and Bonn: Research Institute of Organic Agriculture (FiBL) and International Federation of Organic Agriculture Movements (IFOAM).

•  FiBL & IFOAM. (2015). The world of organic agriculture: Statistics and emerging trends . Frick and Bonn: Research Institute of Organic Agriculture (FiBL) and International Federation of Organic Agriculture Movements (IFOAM).

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Contd… •  Gauchan, D., Smale, M., Maxted, N., Cole, M., Sthapit, B. R., Jarvis, D., & Upadhyay, M. P. (2005).

Socioeconomic and agroecological determinants of conserving diversity nn-farm: The case of rice genetic resources in Nepal. Nepal Agriculture Research Journal, 6, 89-98.

•  Halberg, N., Alroe, H. F., Knudsen, M. T., & Kristensen, E. S. (2006). Global development of organic agriculture: Challenges and prospects. Wallingford, United Kingdom: CABI Publishing.

•  IFOAM. (2008). Definition of organic agriculture. Retrieved 3 20, 2012, from www.ifoam.org: http://www.ifoam.org/growing_organic/definitions/doa/index.html

•  Joshi, G. R. (2010). Factors influencing the adoption of fertilizer technology among rice farmers in the Terai region of Nepal. SAARC J. Agri., 8(1), 21-32.

•  Kafle, B. (2010). Determinants of adoption of improved maize varieties in developing countries: A review. International Research Journal of Applied and Basic Sciences, 1(1), 1-7.

•  Kafle, B. (2011a). Diffusion of uncertified organic vegetable farming among small farmers in Chitwan District, Nepal: A case of Phoolbari Village. International Journal of Agriculture: Research and Review, 1(4), 157-163.

•  Kafle, B. (2011b). Factors affecting adoption of organic vegetable farming in Chitwan District, Nepal. World Journal of Agricultural Sciences, 7(5), 604-606.

•  Kallas, Z., Serra, T., & Gil, J. M. (2009). Farmer’s objectives as determinant factors of organic farming adoption. Centre de Recerca en Economia i Desenvolupament Agroalimentaris, (CREDA)-UPC-IRTA, Parc Mediterrani de la Tecnologia (pp. 1-19). Barcelona, Spain: Centre de Recerca en Economia i Desenvolupament Agroalimentaris, (CREDA)-UPC-IRTA, Parc Mediterrani de la Tecnologia.

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Contd… •  KC, G. K. (2006). An Idea on Organic Agriculture method in Nepal. Proceedings of a First National Workshop on

Organic Farming (pp. 10-26). Kathmandu: Directorate of Agriculture Extension. •  Khaledi, M., Weseen, S., Sawyer, E., Ferguson, S., & Gray, R. (2011). Factors influencing partial and complete

adoption of organic farming practices in Saskatchewan, Canada. Canadian Journal of Agricultural Economics, 58(1), 37-56.

•  Mahmudul, H. A., Ishida, A., & Taniguchi, K. (2003). The role of farmers' education on income in Bangladesh. Bulletin of Education and Research Center for Lifelong Learning, Shimane: Shimane University, 29-35.

•  MoAD. (2015). Ministry of Agriculture Development (MoAD). Retrieved from Welcome to Department of Agriculture: http://www.doanepal.gov.np/

•  MoE. (2011). Status of Climate Change in Nepal. Kathmandu, Nepal: Ministry of Environment, Government of Nepal.

•  Mugwe, J., Mugendi, D., Mucheru-Muna, M., Merckx, R., Chianu, J., & Vanlauwe, B. (2009). Determinants of the decision to adopt integrated soil fertility management practices by smallholder farmers in the Central Highlands of Kenya. Expl Agric., 45, 61-75.

•  Nepal, G., Budhathoki, P., & Gurung, D. (2011). Nepal Status Paper: United Nations Conference on Sustainable Development 2012 (Rio+20). Kathmandu, Nepal: National Planning Commission.

•  Pandey, S. (2013). Factors affecting crop diversity in farmers’ fields in Nepal. Renewable Agriculture and Food methods, 1-8.

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Contd… •  Pant, K. P. (2006). Policies and strategies of Nepal government to promote organic farming i the context of Nepal`s

membership to WTO. Proceedings of a First National Workshop on Organic Farming (pp. 170-178). Hariharbhawan, Lalitpur, Nepal: Directorate of Agriculture Extension.

•  Parvin, M., & Akteruzzaman, M. (2012). Factors Affecting Farm and Non-Farm Income of Haor Inhabitants of Bangladesh. Progressive Agriculture, 23(1&2), 143-150.

•  Pattanapant, A., & Shivakoti, G. P. (2009). Opportunities and constraints of organic agriculture in Chiang Mai Province, Thailand. Asia-Pacific Development Journal, 16(1), 115-147.

•  Pokhrel, D. M., & Pant, K. P. (2009). Perspective of Organic Agriculture and Policy Concerns in Nepal. The Journal of Agriculture and Environment, 10, 89-99.

•  Rahija, M., Shrestha, H. K., & Stads, G.-J. (2011). Nepal - Recent developments in public agricultural research. Agricultural

•  Rehima, M., Belay, K., Dawit, A., & Rashid, S. (2013). Factors affecting farmers’ crops diversification: Evidence from SNNPR, Ethiopia. International Journal of Agricultural Sciences, 3(6), 558-565.

•  Samriddhi. (2011). Commercialization of agriculture in Nepal. Kathmandu, Nepal: Samriddhi - The Prosperity Foundation.

•  Scialabba, N. E.-H. (2007). Organic agriculture and food security. Italy: Food and Agriculture Organization of the United Nations.

•  SECARD-Nepal. (2011). Market Oriented Organic Agriculture Promotion Project (MOAP) in Chitwan District of Nepal . Kathmandu, Nepal: Society for Environment Conservation and Agricultural Research and Development (SECARD) Nepal.

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Contd…

•  Sharma, G. (2005). Organic agriculture in Nepal: An analysis into status, policy, technology and psychology. Kathmandu, Nepal: Paper presented at the National Workshop on Organic Agriculture and Food Security.

•  Shrestha, P. L., & Neupane, F. P. (2002). Socio-economic contexts on pesticide use in Nepal. Landschaftsökologie und Umweltforschung, 38, 205-223.

•  Shrestha, R. K. (2010). Fertilizer Policy Development in Nepal. The Journal of Agriculture and Environment, 11, 126-137.

•  Tamang, S., Dhital, M., & Acharya, U. (2011). Status and scope of organic agriculture in Nepal. Lalitpur, Nepal: Food and Sustainable Agriculture Initiative, Forestaction.

•  Vaidya, G. S., Shrestha, K., & Wallander, H. (2008). Effect of plant residue on AM Fungi. Scientific World, 6(6), 85-88.

•  Vaidya, G. S., Shrestha, K., & Wallander, H. (2008). Effect of plant residue on AM Fungi. Scientific World , 6 (6), 85-88.

•  Weir, S. (1999). The effects of education on farmer productivity in rural Ethiopia - Working Paper CSAE WPS99-7. United Kingdom: Centre for the Study of African Economies, University of Oxford.

•  Weiss, J. (2004). Global organics. Retrieved 3 16, 2012, from http://newhope360.com/agriculture/global-organics •  Wooldridge, J. M. (2006). Introductory Econometrics A Modern Approach. OH, USA: Thomson South Western.

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Annex II. Correlation matrix 28

Contd… 29

Annex III. Differentiating factors across VDCs

Source: Field survey (2013) Note: *** at 1%, ** at 5% and * at 10% level of significance

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Variables VDC (Mean±SD) T-test

Phoolbari Others Total (n=285) HHHage 50.55±11.96 49.32±11.74 49.97±11.85 0.440 HHHedu 7.38±5.53 6.44±5.48 6.94±5.52 0.201 org_exp 5.06±8.95 1.5±5.82 3.38±7.83 0.001*** org_training 1.62±2.23 0.73±1.73 1.2±2.05 0.001*** LFU 4.11±1.78 4.44±1.84 4.26±1.81 0.174 LSU 2.12±1.93 1.80±1.48 1.97±1.73 0.163 farm_size 0.58±0.46 0.51±0.38 0.55±0.42 0.167 farm_income 12.00±0.84 11.94±0.74 11.97±0.79 0.552 non-farm income 8.98±5.41 9.38±5.06 9.17± 5.24 0.565 agrovet 2.12±1.66 1.47±1.84 1.81±1.77 0.006*** market 3.57±3.31 2.38±3.45 3.01±3.42 0.009*** commercialization 0.94±0.73 0.86±0.57 0.90±0.66 0.159 SHDI 3.26±0.31 3.02±0.41 3.15±0.38 0.000***

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