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Impact of Crop Diversification on Rural Poverty in Nepal

Author

Listed:
  • Ganesh Thapa
  • Anjani Kumar
  • Devesh Roy
  • P.K. Joshi

Abstract

Crop diversification into high‐value crops (HVCs) can be an important strategy to augment income, generate employment, and reduce poverty in developing countries. We study the impact of crop diversification (share of production value obtained from the HVCs) on household (HH) welfare measures in Nepal. We use three rounds of the nationally representative Nepal Living Standard Surveys: NLSS I (1994/95), NLSS II (2004/05), and NLSS III (2010/11). The dose–response function, propensity score matching, and instrumental variable techniques are used to estimate the impact of crop diversification. Results show the positive impact of HVCs on the monthly per capita consumption expenditure and poverty outcomes. Among HVCs growers, HHs growing vegetables have the better welfare outcomes. While establishing the relationship between degree of agricultural diversity and poverty measures, we find that the marginal farmers need to at least derive 35% of the share of revenue from HVCs to escape from poverty. La diversification des cultures en cultures à fort apport économique peut s'avérer une importante stratégie pour augmenter les revenus, générer des emplois et réduire la pauvreté dans les pays en voies de développement. Nous étudions les impacts de la diversification des cultures (part de la valeur économique de production obtenue des cultures à fort apport économique) sur les mesures d'assistance sociale aux ménages au Népal. Nous nous sommes servis de trois séries de sondages nationaux représentatifs des Nepal Living Standard Surveys (étude sur le niveau de vie au Népal): NLSS I (1994/95), NLSS II (2004/05) et NLSS III (2010/11). La fonction dose‐réponse, l'appariement des coefficients de propension, et des techniques de variables instrumentales ont servi à estimer les impacts de la diversification des cultures. Les résultats démontrent l'impact positif des cultures à fort apport économique sur les dépenses mensuelles de consommation et de niveau de pauvreté par habitant. Parmi les agriculteurs de cultures à fort apport économique, ceux qui cultivent les légumes démontrent de meilleurs résultats de bien‐être. En établissant une relation entre le degré de diversité agricole et le niveau de pauvreté, nous avons établi que les fermiers marginaux devaient tirer au moins 35 % de leur part du revenu des cultures à fort apport économique pour échapper à la pauvreté.

Suggested Citation

  • Ganesh Thapa & Anjani Kumar & Devesh Roy & P.K. Joshi, 2018. "Impact of Crop Diversification on Rural Poverty in Nepal," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 379-413, September.
    • Handle: RePEc:bla:canjag:v:66:y:2018:i:3:p:379-413
    DOI: 10.1111/cjag.12160
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    References listed on IDEAS

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    2. Varun Kumar Das, 2018. "Looking Beyond the Farm and Household: Determinants of On-farm Diversification in India," Working Papers id:12945, eSocialSciences.
    3. Donald Nyamayevu & Isaiah Nyagumbo & Mazvita Chiduwa & Weili Liang & Ruiqi Li, 2024. "Understanding Crop Diversification Among Smallholder Farmers: Socioeconomic Insights from Central Malawi," Sustainability, MDPI, vol. 16(20), pages 1-18, October.
    4. Ma, Wanglin & Vatsa, Puneet & Zheng, Hongyun & Rahut, Dil Bahadur, 2022. "Nonfarm employment and consumption diversification in rural China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 582-598.
    5. Varun Kumar Das, 2018. "Looking beyond the farm and household: Determinants of on-farm diversification in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2018-023, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Martey, Edward, 2022. "Empirical analysis of crop diversification and energy poverty in Ghana," Energy Policy, Elsevier, vol. 165(C).
    7. Neubauer, Florian & Songsermsawas, Tisorn & Kámiche-Zegarra, Joanna & Bravo-Ureta, Boris E., 2022. "Technical efficiency and technological gaps correcting for selectivity bias: Insights from a value chain project in Nepal," Food Policy, Elsevier, vol. 112(C).

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