The economic determinants of crop diversity on farms in rural Bangladesh

Abstract

The study examines the economic determinants of crop diversity using a survey of 406 farmers located in 21 villages in three agro-ecological regions of Bangladesh. The computed value of diversity indices of crop concentration (Herfindahl), richness (Margalef) and evenness (Shannon) confirm that farming system in Bangladesh is still relatively diverse despite four decades of thrust in the diffusion of a rice-based ‘Green Revolution’ technology. Results reveal that a host of price and non-price factors significantly influence farmers’ decision to diversify. Likelihood of diversification increases with a fall in the prices of fertilizers, animal power services and modern rice and a rise in the price of cash crops. Crop diversification is positively influenced by farm size, livestock ownership, farming experience, education, membership in NGOs, regions with developed infrastructure and unavailability of irrigation. Also, diversification is higher among owner operators. Therefore, crop diversification can be promoted significantly by investing in rural infrastructure, farmers’ education, and supporting NGOs working at the grassroots level. Price policies aimed at improving cash crop prices and reducing fertilizer and animal power prices will also promote diversification. In addition, land reform policies focusing on delegating land ownership to landless/marginal farmers and policies to improve the livestock sector in order to promote livestock ownership by individual farmers are also noteworthy.