Is Environmentally-Friendly Agriculture Less Profitable for Farmers? Evidence on Integrated Pest Management in Bangladesh

Concerns about the sustainability of conventional agriculture have prompted widespread introduction of integrated pest management (IPM), an ecologically-based approach to control of harmful insects and weeds. IPM is intended to reduce ecological and health damage from chemical pesticides by using natural parasites and predators to control pest populations. Since chemical pesticides are expensive for poor farmers, IPM offers the prospect of lower production costs and higher profitability. However, adoption of IPM may reduce profitability if it also lowers overall productivity, or induces more intensive use of other production factors. On the other hand, IPM may actually promote more productive farming by encouraging more skillful use of available resources. Data scarcity has hindered a full accounting of IPM's impact on profitability, health, and local ecosystems.Using new survey data, Dasgupta, Meisner and Wheeler attempt such an accounting for rice farmers in Bangladesh. They compare outcomes for farming with IPM and conventional techniques, using input-use accounting, conventional production functions, and frontier production estimation. All of their results suggest that the productivity of IPM rice farming is not significantly different from the productivity of conventional farming. Since IPM reduces pesticide costs with no countervailing loss in production, it appears to be more profitable than conventional rice farming. The interview results also suggest substantial health and ecological benefits. However, externality problems make it difficult for farmers to adopt IPM individually. Without collective adoption, neighbors' continued reliance on chemicals to kill pests will also kill helpful parasites and predators, as well as exposing IPM farmers and local ecosystems to chemical spillovers from adjoining fields. Successful IPM adoption may therefore depend on institutional support for collective action.This paper - a product of the Infrastructure and Environment Team, Development Research Group - is part of a larger effort in the group to understand the economics of pesticide contamination in developing countries