Risks and returns from soil conservation: evidence from low-income farms in the Philippines
This paper examines risks and returns associated with soil conservation on hillside farms in the Philippines. Stochastic efficiency analysis is combined with a heteroskedastic regression model to assess the impacts of contour hedgerows on lowincome corn farms. Regression analysis indicates that, over time, contour hedgerows can improve yields up to 15% compared with conventional practices. The analysis also provides weak support for a hypothesis that hedgerows are variance reducing. However, results show that the reduction in yield variability afforded by hedgerows is modest, and that yield variability may increase by as much as 5% as hedgerow intensity rises. Tests for stochastic dominance show that, compared with the conventional tillage system, hedgerows do not constitute an unambiguously dominant production strategy. Stochastic efficiency with respect to a function is used to identify a range for the coefficient of relative risk aversion within which hedgerows dominate conventional tillage. Results suggest this range would be rather high; hedgerows dominate the conventional cropping strategy only for decision-makers with relative risk aversion coefficients in the range 3-5.5. Implications for soil conservation adoption in low-income settings are discussed. © 1999 Elsevier Science B.V. All rights reserved.
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- Francisco, Herminia A. & Cruz, Wilfrido & Conway, Zenaida T., 1988. "The On-Site and Downstream Costs of Soil Erosion," Working Papers WP 1988-11, Philippine Institute for Development Studies.
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- Shively, Gerald E., 1998. "Modeling Impacts Of Soil Conservation On Productivity And Yield Variability: Evidence From A Heteroskedastic Switching Regression," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20930, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Feder, Gershon, 1980. "Farm Size, Risk Aversion and the Adoption of New Technology under Uncertainty," Oxford Economic Papers, Oxford University Press, vol. 32(2), pages 263-83, July.
- Feder, Gershon & O'Mara, Gerald T, 1981. "Farm Size and the Diffusion of Green Revolution Technology," Economic Development and Cultural Change, University of Chicago Press, vol. 30(1), pages 59-76, October.
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