IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i12p3380-d241044.html
   My bibliography  Save this article

Investigating the Drivers of Farm Diversification Among U.S. Fruit and Vegetable Operations

Author

Listed:
  • Nicholas A. Lancaster

    (Department of Agricultural Economics, Purdue University; West Lafayette, IN 47907, USA)

  • Ariana P. Torres

    (Department of Agricultural Economics, Purdue University; West Lafayette, IN 47907, USA
    Department of Horticulture and Landscape Architecture, Purdue University, West Lafayette, IN 47907, USA)

Abstract

Diversification of an agricultural operation’s crop mix is considered an environmental and financial management strategy. Environmentally, crop diversification can stabilize the ecosystem via the introduction of biodiversity, allowing for more rapid response to physical and social changes. Economically, crop mix diversification can mitigate risk. Though there are environmental and economic benefits of crop diversification, little economic work has been conducted on crop diversification outside of the row crop industry. This study estimated how internal and external factors affect crop diversification among fruit and vegetable (FV) operations. External factors included access to markets and land; internal factors included farmer beliefs and access to information from extension and network sources. An OLS regression was conducted using data from 1532 farmers across 16 states in the United States. Endogeneity was addressed using an instrumental variable approach and a score endogeneity test indicated that endogeneity was not an issue. OLS results indicate that selling locally increases diversification, while reliance on other farmers for information decreases diversification. A conditional quantile analysis was conducted to reveal factors’ effects across different degrees of diversification. Quantile results indicate that selling locally, season extension technologies, and use of organic practices positively influence crop diversification across all levels of diversification. Receiving information from farmers negatively influences diversification for specialized farms, but positively influences diversification for highly diversified operations.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:12:p:3380-:d:241044
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/12/3380/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/12/3380/
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. S. R. Johnson, 1967. "A Re-examination of the Farm Diversification Problem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(3), pages 610-621.
    2. Ariana P. Torres & Maria I. Marshall & Corinne E. Alexander & Michael S. Delgado, 2017. "Are local market relationships undermining organic fruit and vegetable certification? A bivariate probit analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 48(2), pages 197-205, March.
    3. Thilmany, Dawn D. & Bond, Jennifer Keeling & Bond, Craig A., 2006. "Direct Marketing of Fresh Produce: Understanding Consumer Interest in Product and Process-Based Attributes," 2006 Annual meeting, July 23-26, Long Beach, CA 21217, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. King, Robert P. & Hand, Michael S. & DiGiacomo, Gigi & Clancy, Kate & Gomez, Miguel I. & Hardesty, Shermain D. & Lev, Larry & McLaughlin, Edward W., 2010. "Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains," Economic Research Report 246989, United States Department of Agriculture, Economic Research Service.
    5. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economic Reports 34081, United States Department of Agriculture, Economic Research Service.
    6. Low, Sarah A. & Vogel, Stephen J., 2011. "Direct and Intermediated Marketing of Local Foods in the United States," Economic Research Report 118025, United States Department of Agriculture, Economic Research Service.
    7. Birkhaeuser, Dean & Evenson, Robert E & Feder, Gershon, 1991. "The Economic Impact of Agricultural Extension: A Review," Economic Development and Cultural Change, University of Chicago Press, vol. 39(3), pages 607-650, April.
    8. Jean‐Paul Chavas & Salvatore Di Falco, 2012. "On the Role of Risk Versus Economies of Scope in Farm Diversification With an Application to Ethiopian Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 25-55, February.
    9. Jayson L. Lusk & Keith H. Coble, 2005. "Risk Perceptions, Risk Preference, and Acceptance of Risky Food," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 393-405.
    10. Keeling Bond, Jennifer J. & Thilmany, Dawn D. & Bond, Craig A., 2006. "Direct Marketing of Fresh Produce: Understanding Consumer Purchasing Decisions," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 21(4), pages 1-9.
    11. Mugera, Amin W. & Langemeier, Michael R., 2011. "Does Farm Size and Specialization Matter for Productive Efficiency? Results from Kansas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 43(4), pages 515-528, November.
    12. Govindasamy, Ramu & Zurbriggen, Marta & Italia, John & Adelaja, Adesoji O. & Nitzsche, Peter & VanVranken, Richard, 1998. "Farmers Markets: Consumer Trends, Preferences, and Characteristics," P Series 36722, Rutgers University, Department of Agricultural, Food and Resource Economics.
    13. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    14. Rulon D. Pope & Richard Prescott, 1980. "Diversification in Relation to Farm Size and Other Socioeconomic Characteristics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 554-559.
    15. Salvatore Di Falco & Felice Adinolfi & Martina Bozzola & Fabian Capitanio, 2014. "Crop Insurance as a Strategy for Adapting to Climate Change," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 485-504, June.
    16. Park, Timothy A., 2009. "Assessing the Returns from Organic Marketing Channels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-15, December.
    17. McNamara, Kevin T. & Weiss, Christoph, 2005. "Farm Household Income and On- and Off-Farm Diversification," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 37-48, April.
    18. Euler, Michael & Krishna, Vijesh & Schwarze, Stefan & Siregar, Hermanto & Qaim, Matin, 2017. "Oil Palm Adoption, Household Welfare, and Nutrition Among Smallholder Farmers in Indonesia," World Development, Elsevier, vol. 93(C), pages 219-235.
    19. Vogel, Stephen & Low, Sarah, 2015. "The Size and Scope of Locally Marketed Food Production," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 01, pages 1-1, February.
    20. Seo, S. Niggol, 2010. "Is an integrated farm more resilient against climate change? A micro-econometric analysis of portfolio diversification in African agriculture," Food Policy, Elsevier, vol. 35(1), pages 32-40, February.
    21. Belasco, Eric & Galinato, Suzette & Marsh, Tom & Miles, Carol & Wallace, Russell, 2013. "High Tunnels Are My Crop Insurance: An Assessment of Risk Management Tools for Small-scale Specialty Crop Producers," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(2), pages 403-418, August.
    22. Sarah Fitz-Koch & Mattias Nordqvist & Sara Carter & Erik Hunter, 2018. "Entrepreneurship in the Agricultural Sector: A Literature Review and Future Research Opportunities," Entrepreneurship Theory and Practice, , vol. 42(1), pages 129-166, January.
    23. 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.
    24. Mishra, Ashok K. & El-Osta, Hisham S., 2002. "Risk Management Through Enterprise Diversification: A Farm-Level Analysis," 2002 Annual meeting, July 28-31, Long Beach, CA 19711, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    25. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    26. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    27. 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.
    28. Raphael Amit & Joshua Livnat, 1988. "Diversification strategies, business cycles and economic performance," Strategic Management Journal, Wiley Blackwell, vol. 9(2), pages 99-110, March.
    29. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
    30. Judy M. Bettridge & Androniki Psifidi & Zelalem G. Terfa & Takele T. Desta & Maria Lozano-Jaramillo & Tadelle Dessie & Pete Kaiser & Paul Wigley & Olivier Hanotte & Robert M. Christley, 2018. "The role of local adaptation in sustainable production of village chickens," Nature Sustainability, Nature, vol. 1(10), pages 574-582, October.
    31. Low, Sarah A. & Adalja, Aaron & Beaulieu, Elizabeth & Key, Nigel & Martinez, Stephen & Melton, Alex & Perez, Agnes & Ralston, Katherine & Stewart, Hayden & Suttles, Shellye & Vogel, Stephen & Jablonsk, 2015. "Trends in U.S. Local and Regional Food Systems: Report to Congress," Administrative Publications 292107, United States Department of Agriculture, Economic Research Service.
    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. 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).
    2. Bruno Benzaquen Perosa & Ramon Felipe Bicudo da Silva & Mateus Batistella, 2024. "Market Access and Agricultural Diversification: An Analysis of Brazilian Municipalities," Land, MDPI, vol. 13(1), pages 1-13, January.
    3. Jana Némethová & Ľubomír Rybanský, 2021. "Development Trends in the Crop Production in Slovakia after Accession to the European Union—Case Study, Slovakia," Sustainability, MDPI, vol. 13(15), pages 1-18, July.
    4. Kassem, Hazem S. & Alotaibi, Bader Alhafi & Muddassir, Muhammad & Herab, Ahmed, 2021. "Factors influencing farmers’ satisfaction with the quality of agricultural extension services," Evaluation and Program Planning, Elsevier, vol. 85(C).
    5. Akmal Akramkhanov & Adkham Akbarov & Shakhzoda Umarova & Quang Bao Le, 2022. "Agricultural Livelihood Types and Type-Specific Drivers of Crop Production Diversification: Evidence from Aral Sea Basin Region," Sustainability, MDPI, vol. 15(1), pages 1-19, December.

    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. Tesfaye, Wondimagegn & Tirivayi, Nyasha, 2020. "Crop diversity, household welfare and consumption smoothing under risk: Evidence from rural Uganda," World Development, Elsevier, vol. 125(C).
    2. Hayatullah Ahmadzai, 2017. "Status, patterns, and microeconomic drivers of the extent of diversity in crop production: Evidence from Afghanistan," Discussion Papers 2017-07, University of Nottingham, CREDIT.
    3. Bravo-Ureta, Boris E. & Cocchi, Horacio & Solís, Daniel, 2006. "Output Diversification among Small-Scale Hillside Farmers in El Salvador," IDB Publications (Working Papers) 3012, Inter-American Development Bank.
    4. Erik J. O’Donoghue & Michael J. Roberts & Nigel Key, 2009. "Did the Federal Crop Insurance Reform Act Alter Farm Enterprise Diversification?," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 80-104, February.
    5. Ge, Houtian & Goetz, Stephan & Canning, Patrick & Perez, Agnes, 2018. "Optimal locations of fresh produce aggregation facilities in the United States with scale economies," International Journal of Production Economics, Elsevier, vol. 197(C), pages 143-157.
    6. Jeffrey K. O'Hara & Jeffrey Lin, 2020. "Population Density and Local Food Market Channels," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 477-496, September.
    7. Martinez, Stephen & Park, Timothy, 2021. "Marketing Practices and Financial Performance of Local Food Producers: A Comparison of Beginning and Experienced Farmers," Economic Information Bulletin 327367, United States Department of Agriculture, Economic Research Service.
    8. Cristina Salvioni & Roberto Henke & Francesco Vanni, 2020. "The Impact of Non-Agricultural Diversification on Financial Performance: Evidence from Family Farms in Italy," Sustainability, MDPI, vol. 12(2), pages 1-14, January.
    9. Ani L. Katchova, 2005. "The Farm Diversification Discount," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 984-994.
    10. Cazzuffi, Chiara & McKay, Andy & Perge, Emilie, 2020. "The impact of agricultural commercialisation on household welfare in rural Vietnam," Food Policy, Elsevier, vol. 94(C).
    11. Hongyun Han & Hui Lin, 2021. "Patterns of Agricultural Diversification in China and Its Policy Implications for Agricultural Modernization," IJERPH, MDPI, vol. 18(9), pages 1-22, May.
    12. Gupta, Clare & Jablonski, Becca B.R., 2016. "Farm Impacts of Farm-to-Grocer Sales: The Case of Hawai’i," Journal of Food Distribution Research, Food Distribution Research Society, vol. 47(3), pages 1-23, November.
    13. Antonelli, Chiara & Coromaldi, Manuela & Pallante, Giacomo, 2022. "Crop and income diversification for rural adaptation: Insights from Ugandan panel data," Ecological Economics, Elsevier, vol. 195(C).
    14. Michael Vassalos & Zhifeng Gao & Lisha Zhang, 2017. "Factors Affecting Current and Future CSA Participation," Sustainability, MDPI, vol. 9(3), pages 1-16, March.
    15. Paudel, Krishna P. & Park, Timothy A. & Pandit, Mahesh, 2017. "U.S. Farmers' Decision to Choose Direct Sales Channel: A Fractional Seemingly Unrelated Semiparametric Model," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258370, Agricultural and Applied Economics Association.
    16. Kyung-Hee Kim & Duk-Byeong Park, 2014. "Factors Influencing Rural Tourists' Purchasing Behaviour: Four Types of Direct Farm Markets in South Korea," Tourism Economics, , vol. 20(3), pages 629-645, June.
    17. Poonam Rani & Ajeet Kumar Sahoo, 2023. "Assessment of Productivity and Crop Diversification Pattern in Punjab Agriculture," Arthaniti: Journal of Economic Theory and Practice, , vol. 22(2), pages 251-270, December.
    18. Printezis, Iryna & Grebitus, Carola, 2018. "Marketing Channels for Local Food," Ecological Economics, Elsevier, vol. 152(C), pages 161-171.
    19. Watson, Philip & Cooke, Stephen & Kay, David & Alward, Greg & Morales, Alfonso, 2017. "A Method for Evaluating the Economic Contribution of a Local Food System," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(2), May.
    20. Smith, Bobby J. II & Kaiser, Harry M. & Gómez, Miguel I., 2013. "Identifying Factors Influencing a Hospital’s Decision to Adopt a Farm-to-Hospital Program," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), pages 1-10.

    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:gam:jsusta:v:11:y:2019:i:12:p:3380-:d:241044. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.