IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v201y2022ics0921800922002579.html
   My bibliography  Save this article

Financial profitability of diversified farming systems: A global meta-analysis

Author

Listed:
  • Sánchez, Andrea C.
  • Kamau, Hannah N.
  • Grazioli, Francesca
  • Jones, Sarah K.

Abstract

Diversified farming systems are promoted as a pathway to more sustainable agricultural production. Yet widescale adoption may be slow because of uncertainty about the viability of farmer livelihoods on diversified farms and entrenched perceptions that monocultures are key to making farming profitable. Here, a global meta-analysis of 3192 effect sizes from 119 peer-reviewed articles provides evidence that diversified farming systems are at least as profitable as simplified farming systems. Our study showed that, on average, total costs, gross income and profits (net income, or gross margin) were higher in diversified systems relative to simplified ones, while the benefit-cost ratio was equivalent. These results held in developed and developing countries and across geographic regions. From a subset of 43 articles reporting labour inputs, we found that labour costs increased in diversified farming systems, but so did gross incomes leading to farm profits equivalent to those in simplified systems and dispelling myths that higher labour requirements undermine the viability of diversification. Our global meta-analysis provides compelling evidence that diversified farming systems are not only viable but actually economically preferable to simplified systems in the wide range of contexts represented in this study. Policies, markets, investments, and value chains need to align with this evidence and promote diversified farming systems for the benefit of farmers and rural economies.

Suggested Citation

  • Sánchez, Andrea C. & Kamau, Hannah N. & Grazioli, Francesca & Jones, Sarah K., 2022. "Financial profitability of diversified farming systems: A global meta-analysis," Ecological Economics, Elsevier, vol. 201(C).
  • Handle: RePEc:eee:ecolec:v:201:y:2022:i:c:s0921800922002579
    DOI: 10.1016/j.ecolecon.2022.107595
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800922002579
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ecolecon.2022.107595?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ajayi, Olu Clifford & Akinnifesi, Festus K. & Sileshi, G. & Kanjipite, W., 2009. "Labour inputs and financial profitability of conventional and agroforestry-based soil fertility management practices in Zambia," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(3), pages 1-17, September.
    2. Diana Feliciano, 2019. "A review on the contribution of crop diversification to Sustainable Development Goal 1 “No poverty” in different world regions," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(4), pages 795-808, July.
    3. David Weisberger & Virginia Nichols & Matt Liebman, 2019. "Does diversifying crop rotations suppress weeds? A meta-analysis," PLOS ONE, Public Library of Science, vol. 14(7), pages 1-12, July.
    4. Swinton, Scott M. & Lupi, Frank & Robertson, G. Philip & Hamilton, Stephen K., 2007. "Ecosystem services and agriculture: Cultivating agricultural ecosystems for diverse benefits," Ecological Economics, Elsevier, vol. 64(2), pages 245-252, December.
    5. Nicholas A. Lancaster & Ariana P. Torres, 2019. "Investigating the Drivers of Farm Diversification Among U.S. Fruit and Vegetable Operations," Sustainability, MDPI, vol. 11(12), pages 1-20, June.
    6. Birthal, Pratap S. & Joshi, P.K. & Chauhan, Sonia & Singh, Harvinder, 2008. "Can Horticulture Revitalise Agricultural Growth?," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 63(3), pages 1-12.
    7. Nguyen, Huy Quynh, 2017. "Analyzing the economies of crop diversification in rural Vietnam using an input distance function," Agricultural Systems, Elsevier, vol. 153(C), pages 148-156.
    8. Rodríguez-Pose, Andrés & Hardy, Daniel, 2015. "Addressing poverty and inequality in the rural economy from a global perspective," LSE Research Online Documents on Economics 63257, London School of Economics and Political Science, LSE Library.
    9. Harris, David & Orr, Alastair, 2014. "Is rainfed agriculture really a pathway from poverty?," Agricultural Systems, Elsevier, vol. 123(C), pages 84-96.
    10. Sarah E. Castle & Daniel C. Miller & Pablo J. Ordonez & Kathy Baylis & Karl Hughes, 2021. "The impacts of agroforestry interventions on agricultural productivity, ecosystem services, and human well‐being in low‐ and middle‐income countries: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(2), June.
    11. Rosa-Schleich, Julia & Loos, Jacqueline & Mußhoff, Oliver & Tscharntke, Teja, 2019. "Ecological-economic trade-offs of Diversified Farming Systems – A review," Ecological Economics, Elsevier, vol. 160(C), pages 251-263.
    12. Aslihan Arslan & Kristin Floress & Christine Lamanna & Leslie Lipper & Solomon Asfaw & Todd Rosenstock, 2020. "IFAD RESEARCH SERIES 63 - The adoption of improved agricultural technologies - A meta-analysis for Africa," IFAD Research Series 304758, International Fund for Agricultural Development (IFAD).
    13. Deepak K. Ray & James S. Gerber & Graham K. MacDonald & Paul C. West, 2015. "Climate variation explains a third of global crop yield variability," Nature Communications, Nature, vol. 6(1), pages 1-9, May.
    14. Valerie Nelson & David Phillips, 2018. "Sector, Landscape or Rural Transformations? Exploring the Limits and Potential of Agricultural Sustainability Initiatives through a Cocoa Case Study," Business Strategy and the Environment, Wiley Blackwell, vol. 27(2), pages 252-262, February.
    15. Mary Hendrickson, 2015. "Resilience in a concentrated and consolidated food system," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 5(3), pages 418-431, September.
    16. Timothy C. Durham & Tamás Mizik, 2021. "Comparative Economics of Conventional, Organic, and Alternative Agricultural Production Systems," Economies, MDPI, vol. 9(2), pages 1-22, April.
    17. Joshi, P.K. & Joshi, Laxmi & Birthal, Pratap Singh, 2006. "Diversification and Its Impact on Smallholders: Evidence from a Study on Vegetable Production," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(2), July.
    18. Birthal, Pratap S. & Roy, Devesh & Negi, Digvijay S., 2015. "Assessing the Impact of Crop Diversification on Farm Poverty in India," World Development, Elsevier, vol. 72(C), pages 70-92.
    19. Basu, Reetwika & Gallardo, Karina, 2021. "Economic Issues Related to Long-Term Investment in Tree Fruits," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 36(2), March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ndip, Francis Ebai & Molua, Ernest L. & Mvodo, Meyo-Elise Stephanie & Nkendah, Robert & Djomo Choumbou, Raoul Fani & Tabetando, Rayner & Akem, Nina Fabinin, 2023. "Farmland Fragmentation, crop diversification and incomes in Cameroon, a Congo Basin country," Land Use Policy, Elsevier, vol. 130(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicholas A. Lancaster & Ariana P. Torres, 2019. "Investigating the Drivers of Farm Diversification Among U.S. Fruit and Vegetable Operations," Sustainability, MDPI, vol. 11(12), pages 1-20, June.
    2. Birthal, Pratap S. & Hazrana, Jaweriah & Negi, Digvijay S., 2020. "Diversification in Indian agriculture towards high value crops: Multilevel determinants and policy implications," Land Use Policy, Elsevier, vol. 91(C).
    3. Benjamin Davis & Leslie Lipper & Paul Winters, 2022. "Do not transform food systems on the backs of the rural poor," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(3), pages 729-740, June.
    4. Razafindratsima, Onja H. & Kamoto, Judith F.M. & Sills, Erin O. & Mutta, Doris N. & Song, Conghe & Kabwe, Gillian & Castle, Sarah E. & Kristjanson, Patricia M. & Ryan, Casey M. & Brockhaus, Maria & Su, 2021. "Reviewing the evidence on the roles of forests and tree-based systems in poverty dynamics," Forest Policy and Economics, Elsevier, vol. 131(C).
    5. Birthal, Pratap S., 2010. "Unlocking the Potential of Agriculture in North-eastern Hill Region of India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 65(3), pages 1-15.
    6. Celia Burgaz & Vanessa Gorasso & Wouter M. J. Achten & Carolina Batis & Luciana Castronuovo & Adama Diouf & Gershim Asiki & Boyd A. Swinburn & Mishel Unar-Munguía & Brecht Devleesschauwer & Gary Sacks, 2023. "The effectiveness of food system policies to improve nutrition, nutrition-related inequalities and environmental sustainability: a scoping review," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(5), pages 1313-1344, October.
    7. Haikun Zhan, 2022. "Hidden Costs of War: Evidence from Nepal’s Maoist Insurgency," HiCN Working Papers 375, Households in Conflict Network.
    8. Anuja, A.R. & Shivaswamy, G.P. & Ray, Mrinmoy & Singh, K.N., 2021. "The Pattern of Crop Diversification and Its Implications on Undernutrition in India," 2021 Conference, August 17-31, 2021, Virtual 315379, International Association of Agricultural Economists.
    9. Vermunt, D.A. & Wojtynia, N. & Hekkert, M.P. & Van Dijk, J. & Verburg, R. & Verweij, P.A. & Wassen, M. & Runhaar, H., 2022. "Five mechanisms blocking the transition towards ‘nature-inclusive’ agriculture: A systemic analysis of Dutch dairy farming," Agricultural Systems, Elsevier, vol. 195(C).
    10. Jeetendra Prakash Aryal & Tek B. Sapkota & Ritika Khurana & Arun Khatri-Chhetri & Dil Bahadur Rahut & M. L. Jat, 2020. "Climate change and agriculture in South Asia: adaptation options in smallholder production systems," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(6), pages 5045-5075, August.
    11. Smith, Helen F. & Sullivan, Caroline A., 2014. "Ecosystem services within agricultural landscapes—Farmers' perceptions," Ecological Economics, Elsevier, vol. 98(C), pages 72-80.
    12. Shah, Syed Mahboob & Liu, Gengyuan & Yang, Qing & Casazza, Marco & Agostinho, Feni & Giannetti, Biagio F., 2021. "Sustainability assessment of agriculture production systems in Pakistan: A provincial-scale energy-based evaluation," Ecological Modelling, Elsevier, vol. 455(C).
    13. Takeshima, Hiroyuki & Hatzenbuehler, Patrick L. & Edeh, Hyacinth O., 2020. "Effects of agricultural mechanization on economies of scope in crop production in Nigeria," Agricultural Systems, Elsevier, vol. 177(C).
    14. Falconnier, Gatien N. & Descheemaeker, Katrien & Traore, Bouba & Bayoko, Arouna & Giller, Ken E., 2018. "Agricultural intensification and policy interventions: Exploring plausible futures for smallholder farmers in Southern Mali," Land Use Policy, Elsevier, vol. 70(C), pages 623-634.
    15. Revoyron, Eva & Le Bail, Marianne & Meynard, Jean-Marc & Gunnarsson, Anita & Seghetti, Marco & Colombo, Luca, 2022. "Diversity and drivers of crop diversification pathways of European farms," Agricultural Systems, Elsevier, vol. 201(C).
    16. Rocío Silva-Pérez & Gema González-Romero, 2022. "GIAHS as an Instrument to Articulate the Landscape and Territorialized Agrifood Systems—The Example of La Axarquía (Malaga Province, Spain)," Land, MDPI, vol. 11(2), pages 1-21, February.
    17. Marinela ISTRATE & Raluca Ioana HOREA-ȘERBAN, 2018. "The dynamics of poverty and its consequences on regional inequalities in Romania," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 63-86, June.
    18. Linnenluecke, Martina K. & Smith, Tom & McKnight, Brent, 2016. "Environmental finance: A research agenda for interdisciplinary finance research," Economic Modelling, Elsevier, vol. 59(C), pages 124-130.
    19. Buisson, M.-C. & Balasubramanya, Soumya, 2019. "The effect of irrigation service delivery and training in agronomy on crop choice in Tajikistan," Papers published in Journals (Open Access), International Water Management Institute, pages 81:175-184..
    20. Pascual, Unai & Narloch, Ulf & Nordhagen, Stella & Drucker, Adam G., 2011. "The economics of agrobiodiversity conservation for food security under climate change," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 11(01), pages 1-30, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:201:y:2022:i:c:s0921800922002579. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.