Abstract
We use rich survey data to investigate the economic impact of a climate-friendly rice farming method known as the system of rice intensification (SRI) on the welfare of rain-dependent small-holder farmers in Tanzania. SRI reduces water consumption by half, which makes it a promising farming system in the adaptation to climate change in moisture-constrained areas, and it does not require flooding of rice fields, resulting in reduced methane emissions. Endogenous switching regression results suggest that SRI indeed improves yield in rain-dependent areas, but its profitability hinges on the actual market price farmers face. SRI becomes profitable only when the rice variety sells at the same market price as that of traditional varieties, but results in loss when SRI rice sells at a lower price. We argue that the effort of promoting adoption of such types of climate-friendly agricultural practices requires complementary institutional reform and support in order to ensure their profitability to small-holder farmers.
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Notes
See “http://sri.cals.cornell.edu” for comprehensive information on the productivity and climate impacts of SRI.
One other alternative method to estimate the impact of a program on outcome variables of interest using cross-sectional observational data is the propensity score matching (PSM). However, this method assumes that selection into a program is based on observable characteristics only (Heckman et al. 1997), which we do not expect to be the case in rural Tanzania. As a result, we do not use it in this paper.
In the results section, we introduce a different definition of SRI and perform some robustness checks.
At the time of the survey, 1 USD \(=\) 1600 TZS.
Results are available from the authors upon request.
See NBS (2008) for details on the adult equivalent units.
We estimated our regressions in STATA using the “movestay” command developed by Lokshin and Sajaia (2004).
We thank an anonymous reviewer for suggesting this test.
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Acknowledgments
We would like to thank the Editor (Thomas Sterner), an anonymous reviewer, Travis Lybbert, Haileselassie Medhin, Måns Söderbom, Marcella Veronishi and participants of the \(8^{th}\) Environment for Development Initiative annual meeting at Barahi Beach Hotel, Dar es Salaam, Tanzania, October 23–26, 2014; participants of the Environment and Climate Research Centre (ECRC) seminar series at the Ethiopian Development Research Institute (EDRI) for useful comments on earlier versions of the paper. We would also like to gratefully acknowledge financial support from the Swedish International Development Agency (Sida) through the Environmental Economics Unit of the Department of Economics, University of Gothenburg, from the Gothenburg Centre of Globalisation and Development (GCGD) and from the Swedish Research Council Formas through the program Human Cooperation to Manage Natural Resources (COMMONS).
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Alem, Y., Eggert, H. & Ruhinduka, R. Improving Welfare Through Climate-Friendly Agriculture: The Case of the System of Rice Intensification. Environ Resource Econ 62, 243–263 (2015). https://doi.org/10.1007/s10640-015-9962-5
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DOI: https://doi.org/10.1007/s10640-015-9962-5
Keywords
- Adaptation to climate change
- Endogenous switching regression
- Impact evaluation
- System of rice intensification
- Tanzania