An econometric assessment of the productivity consequences of low-input farming

Abstract

This study examines the possible impacts of low-input farming on the growth of productivity. Specifically, emphasis is placed upon disentangling the effect of overusing chemical inputs and that of the market determinants. Taking into account both production and price uncertainty, the expected utility maximization criterion explicitly incorporating damage control function of pesticides is used to determine farmers' rational demand of chemical inputs. The actual use of chemical inputs and the theoretical use consistent with expected utility maximization are used to establish an overusing index, which later is incorporated into the dual cost function to examine the productivity consequences of overusing chemicals. Simulation analyses of various policy scenarios suggest the positive impact of low-input farming.