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 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, this paper attempts such an accounting for rice farmers in Bangladesh. We compare outcomes for farming with IPM and conventional techniques, using input-use accounting and conventional production functions. All of our results suggest that the productivity of IPM rice farming is not significantly different from conventional farming. Since IPM reduces pesticide costs with no countervailing loss in production, it appears to be more profitable than conventional rice farming. Our 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 eliminate pests will also kill helpful parasites and predators, as well as expose IPM farmers and local ecosystems to chemical spillovers from adjoining fields. Successful IPM adoption may therefore depend on institutional support for collective action.