The economics of conservation agriculture

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ISBN 92-5-104687-5

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© FAO 2001

Conservation agriculture is an innovative approach for improving resource use in sustainable production. Its benefits include reduced inputs, more stable yields, improved soil nutrient exchange and enhanced long-run profitability. This study examines the financial and non-financial factors that affect the adoption and success of conservation agriculture at farm, national and global levels. Conscious of the possible divergence between private and social interests, it highlights the importance of farmers' objectives and motives, the collective dimension and the role of policy. In calling for improved policy analysis and information for decision-making, it recommends the development of sustainability indicators and a whole-farm approach to analysis.

Contents

Acknowledgements

Chapter 1. Introduction

Background and objectives

Defining conservation agriculture

An economic rationale for promoting conservation agriculture

A conceptual framework for studying the adoption of conservation agriculture

Chapter 2. Factors influencing the adoption of conservation agriculture

Financial analyses of conservation agriculture versus conventional practices

The temperate agro-ecological zone in developed countries

Machinery and fuel costs

Pesticide costs

Fertilizer and other input costs

The tropical/temperate agro-ecological zone in developing countries

Financial analyses of conservation agriculture versus other conservation technologies

Other factors influencing the adoption of conservation agriculture

Farmer characteristics

Farm characteristics

Biophysical and technical factors

Chapter 3. Conservation agriculture and the role of policy

The influence of policy on the adoption of conservation agriculture

How policy can enhance the adoption of conservation agriculture

Implications for economic and policy analysis

Non-market valuation techniques

Depletion of soil as natural capital

Whole-farm budgeting

Alternative project evaluation techniques

Chapter 4. Conclusions

Appendix 1
A summary of financial analyses of conservation agriculture

Appendix 2
A review of empirical studies of the adoption of soil conservation and conservation agriculture

LIST OF BOXES

A primer on innovation adoption and diffusion

Latin American experience with conservation agriculture

Collective action and social capital in soil and water conservation

Two cases of contrasting policy roles in promoting sustainable agriculture

Policies for encouraging soil conservation: cash crops in Ontario, Canada

Ontario's Environmental Farm Plan Programme

LIST OF FIGURES

Figure 1
Bell-shaped curve showing categories of individual innovativeness and percentages within each cateory

Figure 2
S-curve representing rate of adoption of an innovation over time

Figure 3
A conceptual framework for studying conservation agriculture adoption

LIST OF TABLES

Table 1
Potential economic benefits and costs associated with conservation agriculture and their incidence

Table 2
Ecosystem functions of lands under conservation agriculture and the global consequences of non-adoption

Table 3
Comparison of conventional and conservation tillage costs for maize and soybeans in the United States, 1979 and 1992

Table 4
Comparison of conventional and conservation agriculture cropping costs for smallholders at two locations in Paraguay

Table 5
Comparison of financial net present values for conservation agriculture versus other soil and water conservation technologies

Table 6
Factors influencing the attractiveness of conservation agriculture practices at the farm level in West Africa

Table 7
Statistically significant factors affecting the farmer's decision to adopt a conservation technology

Table 8
The effect of agricultural tenure and perceived tenure security on conservation technology investment in Africa

Table 9
A summary of policy approaches to promote conservation agriculture

Table 10
Tillage and soil surface management effects on indices of agricultural sustainability