I Choicean duncertaint y ina semi-subsistenc e economy

CENTRALE LANOBOUWCATALOGUS

0000 0146 4680 J Promotor: ir.A . Franke,emeritu.s-hoogleraa r in de ontwikkelingseconomie Co-promotor: dr.ir.H.A . Luning, hoogleraar Survey Integration forDevelopmen t aan het International Institute for Aerospace Survey and Earth Sciences (ITC) Choice anduncertaint y ina semi-subsistenc e economy Promotor: ir.A .Franke ,emeritus-hoogleraa ri nJ ontwikkelingseconomie Co-promotor:dr.ir .H.A .Luning ,hoogleraa rSur v Integration forDevelopmen taa nhe tInternatio L^ institut efo r AerospaceSurve yan dEart hScience _ (TTO v x r jrio^io- . <^-

A. Huijsman

Choicean d uncertainty ina semi-subsistenc e economy

A study of decision making ina Philippine village

Proefschrift ter verkrijging van de graad van doctor in de landbouwwetenschappen, op gezag van de rector magnificus, dr.C.C .Oosterlee , in het openbaar te verdedigen op vrijdag 16me i 1986 des namiddags te vier uur in de aula van deLandbouwhogeschoo l te Wageningen Riski slik elove .W ehav ea goo d ideao fwha ti tis , butw ecan' tdefin ei tprecisely . JosephStiglit z

, BIBLIOTiiKfcK. DKR lAHDBOUWOGESCHOOI. WAGEMNGEN STELLINGEN 1.Da tarmoed eleid tto t hetvermijde n vanrisiko' si si nz' n algemeenheid onjuist. (Ditproefschrift) 2. Hetrisiko-onderzoek ka nweini gbijdrage n aanee n verdiepingva nhe t inzichti nhe t funktioneren van boerenhuishoudens zolangd emat eva n risiko-aversieva n boeren centraalstaa t inplaat sva nd evraa gi nhoevenr e boeren effektief kunneninspele no ponzekerhede n ind e landbouw. (Ditproefschrift) 3. Inhe tbestudere n vand ereakti e vanboere n op risiko'si nd e landbouwclien tee nnadrukkelij k onderscheid gemaaktt e worden tussenenerzijd s fysieke opbrengstrisiko'sva nd e afzonderlijke landbouwaktiviteiten enanderszijd s de financiele gevolgenva ndez e risiko'svoo rhe t huishouden. (Ditproefschrift) 4. Hetopneme nva nrisiko-kriteri ai nd ebeoordelin gva nnieuw e technologiema gnie tleide nto t hett esne lterzijd e schuiven vanee n winstgevendetechnologie ,di eo phe t eerstegezich t riskant lijkt. (Ditproefschrift) 5. Ifth edegre eo fris k (ofne wproductio n possibilities)i s measured byth epossibilit yo fdisaster ,i ti sth erelativel y poor whocarr y mosto fth e risks,an dth erelativel ywealth y whogai nmos t of the benefits. J. Weeks(1972), Uncertainty, Risk, andWealth andIncome Distribution inPeasant Agriculture. Journalof Development Studies, Vol. 7:2&36. 6. Ind etoepassin g enverder eontwikkelin gva nekonomisch e modellenbetreffend e besluirvormingonde ronzekerhei dclien t menervoo rt ewake nda the tmidde lnie tto tdoe lverheve n wordt. 7.D elevenscyclu sva nhe tboerenhuishoude n isee nonmisbar e variabelei nhe tbestudere n vand ebedrgfsvoerin g end e adoptieva narbeidsintensiev e of-besparend etechnologie . (pitproefschrift)

LANDiiOU* ai/.C^SCHOO L 8. Het uitgaanva nhypothesen ,geformuleer d voorhe tonderzoek , roept,althan sbi j demaatschappij-wetenschappen , hetgevaa r opda t alleenfeite n passend bij dcuitgangshypothese nworde n opgemerkt.Juis tniet-passend efeite n kunnenee nnieu wlich t werpeno pd eonderzoeksvraag . 9. Het experimenterenme te nontwikkele n vannieuw eproduktie - mogelijkheden isnie tvoorbehoude n aanrijk e boeren. (Ditproefschrift) 10. Demat ewaari nboere nzel fbijdrage naa nd eontwikkelin gva n technologieword tvaa kaanzienlij k ondergewaardeerd. Essentieleaanpassinge n vannieuw etechnologi eaangebrach t door boeren wordenvaa knie t opgemerkt.Bovendie nword t technologie,ontwikkel do pbasi sva nideee nva nboeren ,som s door onderzoekers c.q. onderzoeksinstellingen geclaimedal s resultaat vaneige nonderzoek . 11. Eenpraktisch ekenni sva nd euitoefenin g vand elandbou wi s voor eenonderzoeke r ind emaatschappg-wetenschappe n vangrote r belangda nee nwetenschappelijk e kennisva nd e plantenteelt. 12. Deeffektivitei t vanvoorlichtingsdienste n inontwikkelings - landenka naanzienlij k verhoogdworde n indienvoorlichter s een aktievero lzoude n speleni nhe tstimulere ne nbegeleide n vanboere nbi jhe t uitvoerenva neenvoudig eproeve n ophe t eigenbedrijf . 13. Het gezegde'ee ngegeve npaar dma gme nnie ti nd ebe k kijken' gaatnie to pvoo rhul pverstrek t inhe tkade rva nd e ontwikkelingssamenwerking. 14. Ookd eanti-bon t bewegingi nNederlan d kanhe tte bon tmaken . A. Huqsman Choiceand uncertainty in asemi-subsistenc e economy. A studyo/decisio nmaking in a Philippine village. Wageningen,16 met' 1986 CONTENTS

Preface and acknowledgements IX Summary xii

1 INTRODUCTION 1 1.1 The risk issue in agricultural development 3 1.2 Research approach and objectives 5 1.3 Thesis outline 6

2 RESEARCH METHOD AND STUDY DESIGN 2.1 Research approach 8 2.2 Selection of study location 10 2.3 Selection of case-study households 12 2.4 Data collection 14 2.5 Presentation of data 18

3 DECISION THEORY AND RISK ANALYSIS FOR SMALL FARM AGRICULTURE: CONCEPTUAL ISSUES AND PRACTICAL PROBLEMS 19 3.1 The family labour farm 19 3.2 The risk factor in agricultural decision making 23 3.2.1 Physical crop production risk 25 3.2.2 Market related risks 28 3.2.3 Net return risk 29 3.2.4 Aggregation of production risks 30 3.2.5 Financial risk 31 3.2.6 Social risk taking 31 3.2.7 Background risks 31 3.3 Modelling farmers' risk behaviour 32 3.3.1 The farmers' ability to forecast uncertain events 33 3.3.2 Defining risk and measuring farmers' risk preferences 37 3.3.3 Satisficing vs.optimizin g behaviour 43 3.4 Assessing the importance of risk in agricultural decision making 47

4 A VILLAGE HISTORY OF AGRICULTURAL AND DEMOGRAPHIC DEVELOPMENT 53 4.1 The natural environment 54 4.2 Agricultural and demographic development until 1970 55 4.3 Technological change in the 1970s 84

5 THE FARM-HOUSEHOLD SYSTEM: RESOURCES AND OPPORTUNITIES 71 5.1 Farm-household resources 74 5.1.1 Land and water 74 5.1.2 Family labour resources and wage labour availability 81 5.1.3 Capital 86 5.2 -Main economic activities and sources of income 89 5.2.1 Annual crop production activities 90 5.2.2 Perennial crops 99 5.2.3 Livestock activities 102 5.2.4 Self-employednon-agricultura lactivitie s 104 5.2.5 Wagelabou ractivitie s 104 5.3 Atypolog yo ffarm-households :Surplu sproductio ncapacit y andth efamil ylif ecycl e 107 5.3.1 Productioncapacit yo ffar mholding s 110 5.3.2 Thefamil ylif ecycl e 113

6 PATTERNSO FHOUSEHOL DRESOURC EUTILIZATION ,INCOW EFORMATIO N ANDEXPENDITUR E 119

6.1 Patterno fhousehol dlabou rutilizatio n 120 6.1.1 Labourallocatio n 121 6.1.2 Intensityo flabou rus ean dlabou rproductivit y inagricultur e 124 6.2 Incomean dexpenditur epattern s 132 6.2.1 Householdincom e 132 6.2.2 Householdexpenditur epattern s 13B 6.3 Riskmanagemen tstrategie s 142 6.3.1 Householdmean so fris kdiffusio n 143 6.3.2 Externalmean so fris kreductio nan ddiffusio n 149 6.3.3 Assetcomposition ,ne tworth ,an dth ehousehol d risksensitivit y 159

7 INTENSIFICATIONO FLAN DUSE :CRO PACTIVIT YCHOIC EAN DINNOVATIO NRIS K 16B

7.1 Risksan dris kcontro li nric ecro pproductio n 169 7.1.1 Landpreparatio nan dcro pestablishmen t 169 7.1.2 Watermanagemen tan drelate drisk s 171 7.1.3 Incidenceo fu/eed san dmee dcontro l 175 7.1.4 Pestan ddiseas econtro l 179 7.1.5 Riskcontro lan dcro pproductio nplannin g 184 7.2 Doubleric ecropping :profitabilit y andriskines s 185 7.2.1 Croppingpatter nstrategie s 187 7.2.2 Croppingstrateg yperformanc e 189 7.2.3 Economicreturn st ocroppin gstrategie s 191 7.2.4 Croppingstrateg yris k 194 7.2.5 Croppingstrateg yfi t 196 7.3 Processan dpatter no fdoubl eric ecroppin gintroductio n 197 7.3.1 Farmers'experience swit hdr yseede dric ean ddoubl eric ecroppin g 198 7.3.2 Riskan dadoptio n 206

8 THEIMPORTANC EO FRIS KI NFERTILIZE RDECISION SFO RRIC EPRODUCTIO N 216

8.1 Farmers'perceptio nan dus eo ffertilize rtechnolog yi n riceproductio n 221 8.1.1 Typeso ffertilize ruse db yfarmer s 221 8.1.2 Farmers'knowledg eo fartificia lfertilizer s 222 8.1.3 Theamoun to ffertilize rapplie d 224 8.2 Pleasuringth erespons et ofertilize runde rfarmers 'condition s 226 8.2.1 Approachesan dproblem si nassessin gstochasti crespons efunction s 226 8.2.1.1 'Gross'approache s 227 8.2.1.2Analytica lapproache s 229 8.2.2 Problemsi nestimatin grespons efunction susin gnon - experimentaldat a 230 8.2.3 Specificationo fth efertilize rrespons emode l 231 8.2.4 Nitrogenrespons eo fIR-varietie s 233 8.2.5 Nitrogenrespons eo fth eBE- 3variet y 237 8.3 Assessingth eris ko ffertilize rus e 238 8.4 Farmers'perceptio nan dattitud etoward sris ko ffertilize rus e 245 8.4.1 Farmers'perceptio no ffertilize rrespons e 247 8.4.2 Farmers'attitud etoward sris k 260 8.5 Theimpac to fris ko nfertilize r 262 8.5.1 Modelspecificatio n 263 8.5.2 Discussiono fresult s 265

9 THEIMPAC TO FRIS KO NAGRICULTURA LDECISIO NMAKING :SYNTHESI SAN D IMPLICATIONSO NRESEARC HAN DAGRICULTURA LDEVELOPMEN T 270

9.1 Farmers'real-lif edecisio nmakin g 271 9.2 Risk,economi cefficiency ,an dequit y 279 9.3 Implicationso ntheor yan dresearc h 283 9.4 Policymeasure st oreduc eth eimpac to fris ko nagricultura l development 288

Glosseryo fkinera' aterm s 293

Listo fabbreviation s 297

Notes 298

Appendices

I Economicmodel so fdecisio nmakin gunde runcertaint y 303 11.1 TheGree nRevolutio na tth evillag elevel :Masagana-9 9 309 11.2 Governmentimpose dfarmers 'associations :th eSamahan gNayo n andseld a 312 III Computationo fth eincom et ofamil yfactor sderive dfro mcro p production 315 IV Weedsi nric efield sidentifie db yfarmer s 317 V Insectpest si nric ecrop sidentifie db yfarmer s 318 VI Specificationo fth eRando mCoefficien tRegressio nMode l 320

References 322

Samenvatting 331

Curriculumvita e 336 ^

IX PREFACEAN D ACKNOWLEDGEMENTS

Formos t countries in Southeast Asia,agricultura l growth isa prerequisite foroveral l economic development.Apar t from providing themai n source of employment and livelihood of the majority of rural households,th eagricultura l sector isexpecte d to produce sufficient surplus to feed the growing urban population,t o save foreign exchange by reducing thenee d for food imports aswel l as to earn foreign exchange by exporting agriculturalproducts .

For the Philippines,Lunin g (1981)indicate s that until1960 , agricultural growth was primarily based on extending thelan d frontier with little change in cropping intensity,chang e in technology and total factor productivity. Thereafter,a shift has occurred to land use intensification in response toa n increasing population pressure against constraining land resources.Lan d use intensification may occur without changes in the basic crop production technology through improvements in existing agricultural practices or from the introduction of additional crops on the same piece of land. Itma y also involve basic changes in crop technology introduced from outside the farming community such asne w seed technology or irrigation.Apar t from increasing physical agricultural output,household s may increase their returns from land through amor e effective useo f household resources, thus limiting payments tonon-famil y owned factorso f production.

In the past decade,muc h attention was paid to increasing agricultural production through the introduction of newcro p production technology consisting of packages of improved seeds, artificial fertilizers,an d crop protection inputs such as pesticides and herbicides aswel la s improved crop husbandry practices. In particular during the initial stageo f the so-called 'GreenRevolution 1, theadoptio n of the 'seed-fertilizer' technology was slowan d highly skewed towards irrigated areasan d supposedly to the richer segment of the farmer community. Among themos t cited reasons causing thisadoptio n pattern are the high investment costsassociate d with the technology aswel la s the much higher risks involved compared to theexistin g production technology.Becaus e of their limited risk taking capability, poor householdswer e considered not to bei n a position to take advantage of the institutional credit facilities thatwer e usually offered to overcome budget constraints.Also ,a mor e general conservative attitude of farmers towards risk taking was considered to impede the technology adoption process.

Against theabov e background of land use intensification, this study attempts toasses s the impact of environmental uncertainty and associated riskso n choices of small farm-households that depend on rainfed rice production asthei rmai n sourceo fincome . In particular,th e issue will beaddresse d whether resource- induced riskaversio nhamper sth eintensificatio no fric ecro p productioni nrainfe dagriculture ,thu sworsenin gth erelativ e- andpossibl yabsolut e- incom epositio no fpoo rhouseholds .

Apartfro mconsiderin gth eris kissu ei nagricultura ldevelopment , attentionwil lb epai dt oth etheor yan dmethodolog yo fris k analysis.Ris kanalysi sfo rsmall-scal eagricultur ei sstil l highlytheoretica lan dha sno tye tbee nadequatel yteste dfo rit s practicalusefulness .Consequently ,th echaracte ro fthi sstud yi s explorative.I ndevelopin gtechnique san dmodel so fris kanalysis , agriculturaleconomist shav eprimaril yconcentrate d onris ki n termso foutcom evariabilit yo fproductio nactivitie san do nway s toincorporat esuc hadditiona lchoic ecriterio ni nth econventia l frameworko feconomi coptimization ,thu swithou talterin gth e basicstructur eo rdesig no fth edecisio nmodel .Becaus eo fth e biased researchattentio ntoward sth econstructio nan dtestin go f ratherabstrac tmodel so fchoic eunde runcertainty ,insufficien t considerationha sbee ngive nt oho wfarmer sthemselve sapproac h andperceiv erisk ,an dho wthe yincorporat eris kconsideration si n farm-householdmanagemen tstrategies .Muc hles sattentio ni s focused onth einheren tmor ecomple xissu ea st oho wlearnin g (e.g.throug hexperimentatio n orinformatio ngathering )affect s choicesan dchoic eprocedures .Mos teconomi cstudie scas tthei r analyseso fris ki na nessentiall ystati cenvironmen twher e changesi ntechnolog yo rinstitution sar e(implicitly )no ttakin g place.

Incarryin gou tthi sstud yan dwritin gth ethesi sI relie do nth e supportan dhel po fvariou sperson swho mI woul dlik et othan k here.Foremost ,I wan tt oexpres sm ygratitud et oal lpeopl eo f thestud yvillag ewh ofo ra perio do ftw oyear sgenerousl yoffere d hospitality tom ywif ean dme ,an dwer emos tconsiderat ei ntakin g timet orespon d toou rnumerou squestions .I nparticular ,withou t theoutspoke nan dsustaine dcontributio no fth ecase-stud y householdsthi sstud ywoul dno thav ebee npossible .Further ,I wisht othan kManan gAso nan dMis sOfeli aAlingala no nwhos e unselfishhel pi ncomin gt ogras pwit hdail ylif ei nth evillag e wecoul dalway srely .Als oth eexcellen tsuppor to fMis s0 . Alingalantogethe rwit hMr .M .Genesil ai nth ecollectio nan d processingo ffiel ddat ai sgratefull yacknowledged .

Sincerethank sar eexpresse d toProf .Ir .A .Frank ean d Prof.Dr .H.A .Luning ,wh ohav eguide dan dsupervise d thisthesis . Prof.Frank etaugh tm etha tunderstandin g farmers'choic e behaviourca nonl ycom efro mcarefu lobservatio nan da nope nmind , andthinkin gtwic ebefor eknowin gbette rtha nfarmers . Prof.Luning ,wit hhi senthusias man dgenuin einteres ti nresearc h concerningth eeconomic so fsmall-scal eagriculture ,induce dan d furtherstimulate dm et oundertak ethi sstudy .I als owis ht o thankm ywif eLyd aRes ,wh oa sa colleagu ean dfello wresearche r criticallyfollowe d thisstud yan dprovide dm ewit hvaluabl e insightsi nmatter sconcernin gfarm-househol ddecisio nmaking , particularlywit hrespec tt oth erol eo fwome nan dchildren . Atth eInternationa lRic eResearc hInstitute ,a numbe ro fpeopl e havecontribute d tothi sstudy .I nparticular ,I wis ht othan k Dr.E.C .Price ,wh oha sguide dan dsupervise dthi sstud yi nth e Philippines.Dr .H.G .Zandstr aan dDr .F.R .Bolto nallowe dm et o usethei rwate rbalanc esimulatio nmode lan dcontribute d toth e developmento fthi smode lint oa croppin g patternsimulatio n model.The yfurthe rmad evaluabl ecomment so nobservation s concerning riceagronom yreporte d inthi sthesis .Als o Dr.R.A .Morri san dDr .D.P .Garrit ymad evaluabl ecomment si n thesefields .Wit hDr .M .Kikuch iI ha dintensiv ediscussion s regardingth estructur eo fth evillag eeconom yan dbenefite dfro m hisexperienc ei ncarryin gou tvillag estudie si nirrigate dareas . Thedevelopmen to fa neconometri cris kassessmen tmode lbenefite d considerably fromth estimulatin gcriticis mo fDr .K .Kalirajan . Finally,Dr .S .Jayasuriy aan dDr .G.E .Goodel lstimulate dm ewit h theirviewpoint san dchallengin gcriticism so neconomi can d anthropologicalaspect so fth estudy .

Ia mgratefu lt oIr .A .Oskam ,wh ogav evaluabl ecomment so nth e econometricris kassessmen tmode lan dresult sderive dfro m applyingthi smode lt ofiel ddata .Fo rthei rsuppor tan dinterest , I thankm ycolleague sa tth eDepartmen to fDevelopmen tEconomics . Finally,I wis ht oexpres sm ygratitud et oMs .I .Barsony ,wh o carefullycorrecte d grammaticalan didiomati cmistakes .

Thisstud ywa sfinanciall y supported byth eInternationa lRic e ResearchInstitute ,th eAgricultura lUniversit yWageningen ,an d theFond sLandbou wExpor tBurea u1916/18 .Whil eworkin ga tth e RoyalTropica lInstitut ea tAmsterdam ,I wa sgenerousl yallowe d timet ofinis hthi sthesis . SUMMARY

Thisstud ydeal swit hth erespons eo fPhilippin eric efarmer st o uncertaintiesan dassociate d risksi nth eproductio nenvironment . Farmers1 riskbehaviou ri sanalyze dwithi nth econtex to flan dus e intensificationthroug hth eadoptio nan dutilizatio no fth eso - called 'modernseed-fertilizer 'technology .Thi stechnolog yha s beencriticize dfo rit scapita lintensit yan dhig hriskines s compared toexistin gtechnology .Amon gothers ,farmers 'aversio n totak erisk sha sbee nsuggeste da sa possibl efacto rexplainin g slowadoptio nrate so fpoo rfarmers .I norde rt oinvestigat eth e impacto fris ko ndecisio nmaking ,a distinctio nshoul db emad e between (1)farmers 'attitude stoward sris ktaking ,i.e. ,th e possibilitytha tthe yar eunwillin gt otak erisk san dt oinves ti n riskybu tprofitabl etechnolog ycausin ga noveral lunderinvestmen t inagricultura linput san dmisallocatio no fresource sand/or ; (2)th efarmers 'inabilit yt oinves ti nrisk ytechnolog ybecaus e ofa limite dris ktakin gcapacit yleadin gt oa nunequa l distributiono fbenefit sderive d fromne wtechnolog yamon gth e richan dpoo rstrat ao fth erura leconomy .

Conceptualissue san dpractica lproblem si nanalyzin gth e influenceo fris kan duncertaint yo nfarm-househol d decision makingar ediscusse di nChapte r3 .A critica lrevie wi spresente d ofvariou stheorie sconcernin grisk ydecisio nmaking .Th egenera l conclusioni stha tnon eo fthes etheorie shav eye tbee nteste dt o theexten ttha tthe yca nb euse da sa nadequat eframewor kfo r examiningth eoccurrenc eo ffarmers 'ris kaversio nan dassessin g' theimpac to fris ko ndecisions .

Chapter4 describe sth ehistorica lproces so flan dus e intensification inrelatio nt opopulatio ngrowth .I tshow stha t theintroductio no fth e 'modern'IRRI-release dric evarietie s (IR-varieties)an ddoubl eric ecroppin gi sjus ta ne wphas ei na continuousproces so flan dus eintensificatio ntha tstarte di nth d mid 1940swit hth eclosin go fth elan dfrontie ri nth eric e lowlandarea .Compare dt othei rpredecesso rBE- 3- no wconsidere d atraditiona lric evariet y- th eadoptio no fIR-varietie sha sbee n relativelyquick .However ,adoptio na ta nappreciabl escal edi d nottak eplac eunti lfarmer sthemselve s- throug hvariou scultura l adaptations- ha daugmente dth eattractivenes so fgrowin g IR-varietiesunde rrainfe dconditions .

Thene wric etechnolog yallowe da mor eeffectiv eus eo ffamil y labourresources ,an daugmente d theincom eo findividua lfarm - households.However ,du et ochange si nth elabou rutilizatio n patterninduce d bythi stechnolog yan dth eintroductio no flabou r savingtechnolog y (ricethreshers) ,jo bopportunitie si nth e villagedi dno tincrease ,wherea sincom esharin gbetwee nth epoo r andsomewha twealthie rhousehold sdecline dan dth eeconomi c positiono fwome ndeteriorated .I nth eproces so flan dus e intensification,th eoveral lris ktha tfarm-household sfac eha s xiii increased.Th e present land utilization pattern is characterized by intensive cropping systems on relatively small farm areas that have become strongly dependent on external inputs.Th ecapacit y of risk spreading between agricultural activities has become limited, whereas the overall financial risk of crop production has increased.

Themajorit y of development programmes imposed upon the village community during the 1970s,di d not contribute much to farmers' efforts to intensify rice crop production. Instead, they created an atmosphere of uncertainty and were counterproductive to the needsan d economic development ofhouseholds .

In order to investigate the effect of risk on the household's ability to takeadvantag e of the newcro p technology, farm- householdswer e classified according to their sensitivity to income risks (Chapter 5).Tw o classificationvariable s were employed: (1)th e subsistence coverage factor indicating the household's capacity togenerat e a surplus income above basic subsistence requirements through cropactivities ,an d (2)th e family life cycle stage which among others determines family labour availability and the capacity to timely control crop production risks.

Patterns of farm resource utilization,househol d income formation and consumption expenditures are analyzed inChapte r 6. Household categories differ substantially with respect to their ability to improve upon living conditions and risk taking capacity. In sharp contrast with surplus households,fo r non-surplus households there ishardl y any room tocu t back on household expenditures or create reserves.Force d by short-term subsistence pressures during the lean month period, young non-surplus households have to employ their scarce family labour resources on activities that provide immediate incomeaffectin g labour investments in self-employed agriculture.Wit h a higher worker toconsume r ratio,middle-age d non-surplus households areabl e to devote muchmor e family labour to self-employed agricultural activitieswhil ea t the same time providing for short-term income requirements through wage labour activities. In fact,thes e households face serious problems in finding remunerative employment foral l their family labour resources. The possibility of increasing labour input in individual rice crops iseconomicall y marginal,wherea s off-farm employment opportunities are limited.

Compared to surplus households,non-surplu s households show low productivities per labour hourmainl y due toa lower level of cash input investments.Th e necessity tous e credit to sustain subsistence and education expenses affects thecapacit y ofnon - surplus households to invest in productive activities and induces them to credit rationing. Interest payments on loansacquire d in poor production years usurp a substantial part of the income above basic subsistence needs realized ingoo d production years.Th e middle-aged non-surplus-household s have tous e income for the XIV educationo fchildre ni norde rt osafeguar d long-termsecurity .

InChapte r 7th erelationshi pbetwee nth ehousehold' sris k sensitivityan dth eadoptio no fdoubl eric ecroppin gi s investigated.Household sdiffe rwit hrespec tt oth eperceive d riskso fdoubl eric ecroppin gdu et odifference si nris kcontro l capacityresultin gfro mdifference si nfamil ylabou ravailabilit y andfinancia lposition .The yals odiffe rwit hrespec tt oth enee d tointensif y ricecro pproduction .Th eimportanc eo fth efamil yi lifecycl e- a variabl ecommonl y lackingi nadoptio nstudie s- o n adoptionbehaviou ri sindicated .Thi sfacto rma ycaus ecyclica l dynamicsi ntechnolog yutilizatio npatterns ,i.e. ,household sma y graduallychang emanagemen torientatio nan dpatter nwhe nmovin g fromon elif ecycl et oanother .Th eadoptio nproces sshow stha t experimentation isa majo rtoo lo ffarmer st oreduc euncertaint y andtha t- i ncontras twit ha commonl yhel dbelie f- experimentationwit hne wcro ptechnolog yi sno ta prerogativ eo f wealthyfarmers .

Farmers'decision swit hrespec tt oth eus eo ffertilize ri nric e cropproductio nar ediscusse d inChapte r8 .A nattemp ti smad eto : quantitativelyasses sth erelativ eimportanc eo fresource-induce dj riskaversio na soppose d toth efarmers 'ris ktakin gwillingness , and farmers'fertilize r responseperception sa soppose d toris k aversion.Difficultie sencountere d inquantifyin g thevariou s parametersplayin ga rol ei nsuc ha nanalysi sar ediscussed . Fertilizerrespons eunde rfarmers 'condition sar eestimate dan d theris ko ffertilize rapplicatio ni sempiricall yassessed .Th e farmer'sperceptio no ffertilize rrespons eturn sou tt ob e strikingly similart oempirica lestimates .I ncontras twit h responseperceptio nan dris ktakin gwillingness ,resource-induce d riskaversio nappear st ob ea nimportan tvariabl eexplainin g differencesi nfertilize rapplicatio nlevel samon ghousehol d categories.However ,perception san dris ktakin gwillingnes sar e importanti nexplainin gdifference sbetwee nindividua lhouseholds .

Asummar yo fth esalien tfeature so fth efarmer' schoic eprocesse s anda synthesi so fmajo rfinding sconcernin g farmers'ris k behaviouri spresente di nChapte r9 .Th estud yarrive sa tth e overallconclusio ntha ti ti sdangerou st obas eris kanalyse so n superficialobservation san dgeneraliz eabou tsmal lfarmers 'ris k behaviour.First ,man yfarmers 'productio nstrategie san d practices- ofte nerroneousl y identifieda sresultin gfro mris k aversebehaviou r- serv eth edua lpurpos eo freducin gris kan d attainingbes teconomi cresults .Suc hstrategie sresul tfro m (1)cautiou soptimizatio nove ra certai nperio do ftim ebase do n adaptationt ochange si ninterna lhousehol dcondition san d externalcircumstances ,searc hfo rimprovements ,an d experimentationand ;(2 )sequentia lchoic eprocedure san dris k controlwithi nyear sbase do nadaptatio nt ochanc econstraint san d opportunitiesa sthe yevolv ei nth ecours eo fa productio ncycle . Theyallo wfo ra noptimu mus eo fenvironmenta lresource san dar e thussoun deconomi cpractice . Second,ris ki sno ta wel ldefine dconcept .I tdescribe svariou s typeso funcertaint y (e.g.yiel dvs .financia l risk),wherea sth e degreeo friskines so factivitie sdepend so nth eris ktakin g capacityo fhouseholds ,comprisin g bothth eabilit yt otimel y controlcro pproductio nrisk sthroug hlabou rinvestment san dth e capacity tobea rfinancia lrisks .Hence ,cro pproductio nrisk sar e notth esam efo rdifferen ttype so fhouseholds ,wherea sfinancia l riski slikel yt odiffe rbetwee ntim eperiods .Withi na n apparentlyhomogeneou sgrou po fsmal lfarm-households ,difference s infinancia lris ktakin gcapacit yan dresourc ecompositio nar e suchtha thousehold sperceiv edifferen tproductio nrisk sa swel l asfinancia lrisk st osimila ractivities ,an dthu ssho wa differentrespons et orisk si nagricultura lproduction .Moreover , forth esam ehousehol dther ema yexis ta conflic to finteres t betweenris kreductio ni nth eshor tan dmediu mter man di nth e mediuman dlon gterm .Thus ,withou tspecifyin g thetyp eo fris ka s wella sth eperio dan dcondition sunde rwhic hdecision sar emade , itcanno tb eevaluate dwhethe rris kdeter sinvestment si ninput s oradoptio no ftechnolog ymor efo ron ecategor yo fhousehold stha n another.Fro ma productio npoin to fview ,farmer ssimpl ycanno tb e classifieda sris kseeker so rris kaverters .I nfact ,th esam e farmerma yfi tbot hcategories .

Farm-householdsar euse dt oris ktakin gi nagriculture .The yar e generallyno tmuc hintereste d instabilizin gagricultura loutpu t ifsuc himplie sa neve nmoderat ereductio ni nperceive d income.I t isno ts omuc hth eperceive dproductio nrisk si nagricultura ltha t influencechoic ebehaviou ro fpoo rhouseholds ,i ti sth enee dt o optfo rparticula rincom eearnin gactivitie stha tsecur eimmediat e subsistenceneed san dlimi tth eimpac to ffinancia lrisk so n subsistencesecurity .I norde rt okee pfinancia lris ka ta manageablelevel ,household shav et oratio ncredi tus ean dlimi t financialinvestment si nagriculture .Whe nrisk-induce d underinvestmentoccurs ,i ti scause db yth elimite dcapacit yo f poorhousehold st otak efinancia lrisk srathe rtha nb ythei rris k averseattitudes .Give nth econtinuou sindebtednes so fnon-surplu s households,perceive d financialris kma yconstitut ea seriou s causefo runderinvestmen t inagricultur ean dwidenin gincom e disparitiesbetwee npoo ran dwealth yhouseholds . INTRODUCTION

Sinceth eearl y1960s ,choic ebehaviou ro fsmal l(semi - subsistence)farmer s- traditionall yconsidere d thedomai no f mainlyanthropologist san drura lsociologist s- wa sincreasingl y paidattentio nt ob yagricultura leconomist sstudyin gagraria n changeprocesse si ndevelopin gcountries .Thi sfollowe d fromth e recognitiontha tsmal lfarmer sconstitute da majo rsegmen to fth e agriculturalproducer san dthu swoul ddetermine ,i npart ,th epac e ofagricultura ldevelopment .I tle dt oincrease deffort so f economistst ostud yth especifi ccharacte ro f(semi- )subsistenc e agriculturei norde rt oidentif ypossibl eway so fintegratin gthi s sectorint oth emainstrea mo foveral leconomi cdevelopmen t (Wharton,1969) .I n1965 ,durin ga majo rconferenc eo nsubsistenc e agriculture,Moshe r(1969 )unequivocall y summarized thethe n currentopinio nconcernin gth ebasi crequiremen tfo rsuc hchang e processt ooccur : Foragricultura ldevelopmen tt otak eplace ,i ti s essential,amon gsevera lothe rnecessities ,tha tfarm s becomeles san dles ssubsistenc ean dmor ean dmor e commercial,producin gincreasingl y forth emarket . (Hence),i ti sessentia ltha tw elear nmor eabou twha t motivatessubsistenc efarmer sa tth epresen ttim ean d whatne winfluence sca nb ebrough tt obea rt ohel pthe m movetowar dgreate rcommercializatio n ofthei rfarming . (Further),th efaste rthos eno wengage di nsubsistenc e agricultureincreas ethei rproductivit yan dmov emor e andmor eint ocommercia loperatio no fthei rfarms ,th e greaterth edeman d forindustria lgood swil lb ean dth e fasterth etota leconom yca ngrow .

Initially,i twa sassume d thata nincreas ei nproductio nfro mth e small-scalefar msecto rcoul db eattaine d througha mor eefficien t useo fexistin gresource san dtechnology .Thi spolic yorientatio n logically followed fromth ethe nwidel yhel dvie wtha tsmal l farmerswer etechnologicall ybackward ,ha ddeficien t entrepreneurialability ,an dlimite daspiration s (Rogers,1969) . Thisimag eo fsmal lfarmer si sbes tsummarize d inth eonc e colonialstereotyp eo f 'thoselaz ynative swh orefus et owor kfo r anincom ebeyon dwha tthe yrequir efo rthei rsubsistence' .Th e ideao fa neconomicall y inertsmal lfarme rpopulatio nwas , however,seriousl ychallenge d bySchult z(1964 )i nhi s pathbreakingessa y 'TransformingTraditiona lAgriculture' .H ean d Jones(I960 )wer eth eearl yspokesme nfo rthos ewh oargue dtha t farmersi ntraditiona lagricultur eac teconomicall yrationa l withinth econtex to fthei ravailabl eresource san dgive nth e existingtechnology .Schult zarrive da tth econclusio ntha t underdeveloped agriculturalcommunitie s- no tjus tindividua l farmers- ar eeconomicall yefficien tbu tpoor .H ederive dhi s belieffro mth elon gconstanc yo ftraditiona lagricultura l environments. AlthoughSchult zma yhav esomewha toverstate d theeconomi c rationalitythesis ,i.e. ,tha tfarmer sallocat eresource si na mannerconsisten twit hth eneo-classica lmode lo fth efirm ,hi s workgav eimpetu st oseriou seffort si nth especificatio no fth e technicalan deconomi ccondition sunde rwhic hfarmer shav et o operatean dth equantificatio no fsmal lfar mproductio n relationships.A sindicate db yLipto n (1968): 'Economistsstarte d torealiz etha tth esmal lfarme ri sn ofool .A non-foo li na staticenvironmen tlearn st oliv eefficiently :t ooptimize ,give n hisvalue san dconstraint san dt oteac hhi schildre nt od oth e same'.

Theissu ewhethe r farmerswer eeconomicall yefficien tproducer s hadcritica lpolic yimplication so nagricultura ldevelopmen t (Mellor,1969) : Ifther ear esignifican tdisequilibri awithi nth e existingagricultur ethe npresumabl yth etota l productionfro mth eexistin gse to fresource sca nb e increased throughproductio neconomic sstudie san d educationalprogrammes .If ,however ,farmer sar e'poo r butefficient' ,a mor esubstantia leffor ti sneeded . Theburde no fdevelopmen ti sshifte dt opolicie sfo r changingth edecisio nmakin genvironment .I nadditio n tofarmers ,government san dinstitution smus tb emoved .

Alarg enumbe ro fstudie swer eundertake nt otes tSchultz' s 'allocativeefficiency 'hypothesi susuall yconsistin go fcross - sectionproductio nfunctio nanalysi s(Chennareddy ,1967 ;Massel l andJohnson ,1968 ;Welsch ,1965 ;Yotopoulos ,1968) .B yan dlarge , thesestudie sconclude d thatwithi nthei rtechnologica lan d institutionalconstraint sfarmer swer ebehavin glik eprofi t maximizers.However ,muc ho fthi s 'evidence'wa slate rcriticize d onmethodologica lgrounds .O nth ebasi so fthes efindings ,ther e wasa growin gconsensu samon gagricultura leconomist stha t increasedagricultura lgrowt han dpovert yalleviatio nrequire d basicchange si nth eagricultura lproductio ntechnolog yemploye d byfarmer sand/o ra redistributio no fresource s(e.g .land )i n ruralareas .

Atth estar to fth e1960 sa numbe ro finternationa lagricultura l researchinstitute swer eestablishe d (e.g.th eInternationa lMaiz e andWhea tImprovemen tCentr ei nMexic o(CYMMIT )an dth e InternationalRic eResearc hInstitut ei nth ePhilippine s(IRRI) ) withth especifi cai mo fundertakin gfundamenta lresearc h(e.g . geneticresearch )int osom eo fth eworld' smajo rfoo dcrop ssuc h asmaize ,whea tan drice .A tIRRI ,establishe di n1962 ,a numbe r ofshort-stra wric evarietie swer edevelope dtha twer efertilize r responsivean dshowe d- unde rgoo dmanagemen tpractice san dwate r supplycondition s- a considerabl ehighe ryiel dleve lcompare dt o theexistin gric evarietie suse db yfarmers .B yth een do fth e 1960sthi stechnolog ywa sconsidere d tob esufficientl ydevelope d andteste dt ob edisseminate d amongfarmers .I norde rt otransfe r thisrelativel ycash-intensiv etechnolog yt oth elarg enumbe ro f smallfarmers ,massiv egovernmen tconcerte d extensionan dcredi t programmeswer eundertake ni nman ycountrie si nth eearl y1970s .

1.1 Theris kissu ei nagricultura ldevelopmen t Theevaluatio no fth eimpac to fthes eprogramme so nagricultura l developmentha sle dt oa substantia lcontrovers yamon gscholar s anddevelopmen tplanner swhic hi swel ldocumente d inth eextensiv e literatureo nth eso-calle d 'GreenRevolution' .I nparticular ,th e argumentevolve saroun dth equestio nwhethe rth e'seed-fertilizer ' technologyha scause dincrease d incomedisparitie swithi nan d betweenrura lareas .Fo rvariou sreasons ,farmers 'attitude s towardsth erisk sassociate dwit hthi stechnolog yha sincreasingl y becomea centra lissu ei nthi sdebate .

First,becaus eo fit svulnerabilit yt oadvers eclimati can d biologicalconditions ,th e 'seed-fertilizer'technolog yha sbee n particularly criticized forit shig hris kleve lcompare d toth e existingtechnolog yemploye db yfarmers .Unde rles sfavourabl e productionregimes ,th epotentia lhig hproductio nlevel sar eofte n notrealize drenderin gth erequire d investmenti ncas ho rcapita l inputssuc ha sfertilize ran dmachiner ya risk yundertaking .Thus , iti sargue dtha tespeciall yresource-poo r farmers- du et othei r limitedrisk-takin g capability- ar eno tlikel yt obenefi tfro m thesene wproductio npossibilities .Th eide atha tris k considerationsma ycaus ecarefu lbehaviou ro fpoo rfarmer sha sle d toth ehypothesi stha tth eprofitable ,bu trisk y 'seed-fertilizer' technologyma yhav eincrease d incomedisparitie sbetwee npoo ran d richstrat ao ffarm-household s (Griffin,1979 ,Weeks ,1970 , Cancian,1972) .

Second,th eincrease dcommercializatio n ofth erura leconom y partlyfollowin gth eincrease dus eo fcas hinput si ncro p productionha sbee nhel dreponsibl efo ra rapi ddeterioratio no f localwelfar einstitution s (Scott,1976) .I ti sargue d thatth e processo fcommercializatio nallow sindividua lfarmer st oincreas e theireconomi cwelfar ewithou tregardin gth esocia lconsequence s withinth evillage :inequalit ywit hrespec tt osocia lprestige , thecharacteristi co fth eorigina lvillag estructure ,i sreplace d byinequalit yi neconomi cpositio n (Grijpstrae tal , 1976).Thi s processo f 'individualization'cause sa weakenin go ftraditiona l welfarecushion san dlevellin gmechanisms .Thi simplie stha t resource-poor farmersfac ea nincreasin gris ko ffoo dshortage si n poorproductio nyears .

Third,i tha sals obee nargue dtha tth erapi dsuccessio no fne w typeso f 'improvedtechnology' ,couple dwit hth einheren ttendenc y tobecom emor ecomple xwit hever yne wdevelopment ,ha sle dt oa n increasinglac ko fcomprehensio nan dcontro love rne wtechnolog y onth epar to fth efarme r(Goodell ,1982) .I nparticular ,farmer s withlimite dacces st oextensio nservice so rothe rsource so f informationar elikel ywithhel d fromusin gsuc htechnolog ydu et o highperceive dris klevels .

Therecognitio ntha tfarmers 'aversio nt oris kma ypotentiall y impedeagricultura ldevelopmen tan dcaus eincrease dincom e disparitiesi nrura lareas ,ha sle dt oa growin ginteres ti n researcho nth einfluenc eo fris ko nfarmers 'decisio nmaking .I n fact,th etopi co ffarmers 'ris kaversio nbecam equit efashionabl e inth elas tdecade .T osom eextent ,ris kaversio nha sbecom ea nt w varianti nreconcilin gth edifference sbetwee nresearchers ' findingsan dfarmers 'practices : Beforeth ewor ko fSchult z(1964 )i twa scommo nt o concludetha twhe nobserve d behaviourconflicte dwit h recommendationsgenerate d fromnormativ emodels ,th e discrepancywa sth efarmers 'fault ,i.e. ,tha tth e farmerwa seithe rignorant ,stupid ,laz yo rirrationa l Nowtha ti tha sbecom eth eaccepte dpractic et o regardfarmer sa srational ,i tha sbecom emor epopula r toexplai ndiscrepancie sb ya nappea lt oris kaversio n (Roumasset,1976) .

Atremendou sbod yo fliteratur eha sbee naccumulate d inth efiel d ofris kresearc hbot ha tth etheoretica lan dapplie dlevel . Despitethes eefforts ,researc hprogres si nthi sare aha sbee n slowa sindicate d byrecen trevie wpaper so fYoun g (1979)an d Robison (1982).Th emai ndifficultie sste mfro mth elac ko fa satisfactory theoreticalan danalytica lframewor k (Chapter 3),th e developmento fwhic hi sseriousl yhampere d bya lac ko fdat athaf t wouldallo wempirica lanalysi so fris kassociate dwit h agriculturalproductio nactivities .Ther ei sn oconcensu so nhow ! riska sa concep tshoul db edefine dt oadequatel yrepresen t farmers'feeling swit hrespec tt ooutcom euncertainty .Give nth e lacko fknowledg ei nth efiel do fris kperception ,i ti sobviou s thatknowledg ewit hrespec tt ofarmers 'respons et oris ki s equallylimited .A par to fth eliteratur esimpl ytake sth e existenceo fris kaversio nfo rgranted .Base do nsuperficia l analyses,i ti scommo nt oobserv ei nman ykind so ftraditiona l agriculturalpractice san dinstitution smeasure sthroug hwhic h farmersattemp tt oreduc erisk .

Incontras tt oth elarg eresearc heffor tdirecte d towardsth e measuremento ffarmers 'ris kpreferences ,economist shav e generallyneglecte dresearc ho nris kperceptions .Ris kattitude s areofte n(incorrectly )associate dwit hpermanenc ean dthu sar e consideredo fanalytica linteres tfro ma polic ypoin to fview , whereasperception so factivit yrisk sar especifi ct oparticula r alternatives,location ,an dtime .Although ,a micro-economi c theoryincludin gaspect so fperceptio no fprospect san dprocessin g ofinformatio ni srapidl yemerging ,i ti sno tnearl ya swel l developeda stheorie sconcernin gris kattitude s(Walker ,1981) .I n mucho fth eliterature ,empirica loutcom edistribution sar e employedt orepresen tth eriskines so foption sassumin gtha t decisionmaker shav esimila rperceptions .

Althougha substantia leffor tha sbee nmad et omeasur eth eexten t offarmers 'ris kaversion ,thes efinding sshoul db etreate d cautiously.Th emethod st oelici tfarmers 'ris kpreference sare , toa larg eextent ,unreliable ,whil eth ecaus eo fris kaversio n mayeasil yb econfounded .I nthi srespect ,Binswange r (1978) pointst oth edifferenc ebetwee n 'attitudinalris kaversion 'an d 'resource-induced riskaversion' .Th eforme rconcern sth e ' individual'swillingnes st otak erisk san di sdetermine d byth e psychologicalmake-u po fth eindividual ,wherea sth elatte r concernsth eabilit yt otak eris kan di sdetermine d byresourc e <^-availabilit yan dacces st oadditiona lmean so fproductio nan d consumption.Thi sdistinctio ni so fcritica limportanc et oth e designo fagricultura lpolic ymeasures .Th eunderlyin gquestio ni s whetherfarmer sar epoo rbecaus ethe yar eles swillin gt otak e riskso rwhethe rthe yar emor elimite d inthei rris ktakin g behaviour becausethe yar epoor .

' Ifdifference si nbehaviou rar edu et odifference si nattitudes , itma yb eargue d thaton eshoul dsee k(a )t ochang eattitude so r (b)t ochanne lincentive san dresource st othos efarmer swhos e attitudesar efavourabl et oth edesire dchanges .However , influencingattitude so fpeople ,fo rexampl ethroug heducationa l programmes,i sa difficul t- i fno timpossibl e- tas kwhic ha t leastrequire ssom etim et oyiel dresults .Th esecon dtyp eo f measuresma yresul ti nincreasin gincom edisparitie si nrura l areas.I nth epast ,thi styp eo fpolic yorientatio nwa softe n justifiedo nth eground stha ti tmaximize sreturn st oscarc e resourcesi nth eshor trun ,thu senlargin gth etota loutpu t availablefo rfurthe rinvestmen to rincom eredistributio nlate ro n (Berry,1980) .

Z If.o nth eothe rhand ,underinvestmen ti nagricultur ei scause db y riskavers ebehaviou r stemming fromth efarmer' sinabilit yt otak e risks,thi swoul dprovid ea distinc topportunit y todesig n measurestha twil lno tonl yincreas etota loutpu tfro magricultur e butals odirectl yimprov eth elo to fpoo rfarmers .I norde rt o breakthroug hth eperpetua lcycl eo fpovert ycause d byresource - inducedris kaversion ,on ewoul drequir emeasure sfro moutsid eth e community thatincreas eth eris ktakin gcapacit yo ffarm - households.Thi sma yinvolv echannellin g productiveresource st o poorhousehold so rmeasure stha treduc eth enegativ eeffec to f risktakin gsuc ha sinsuranc eprogrammes ,specia lcredi t programmes,o rrelie fmeasures .

1.2 Researchapproac han dobjective s Fromth eabov ei tma yhav ebecom eclea rtha ti twa sdifficul tt o arrivea twell-formulated ,testabl ehypothese so nwhic ht obas ea researchapproach .Consequently ,th estud yha da stron g explorativecharacter .I twa shope dtha tthroug hcarefu l monitoringo fhousehol d behaviour,ne winsight scoul db eobtaine d inth ecours eo fth eresearc hprojec ttha twoul dallo wsubsequen t testingo nth ebasi so fempirica ldata .

Inth edesig no fth estud yw ehav eattempte d tod ojustic et oth e complexityo ffarm-househol d decisionmaking .A smuc ha spossible , riskwa streate da sjus ton evariabl ei nth edecisio nmakin go f farmers.Th eanalysi sfocuse do nth eexten tt owhic hdifferen t categorieso fsmal lrura lhousehold si na rainfe d riceproductio n areai nth ePhilippine swer eabl et oadap tt ocondition so fa worseningman/lan d ratiothroug hth eadoptio no fne wcro pan dcro p inputtechnology .

Withinthi scontext ,researc hobjective sspecificall y relatedt o therol eo fris ki nagricultura ldecisio nmakin gare : Howd oindividua lhouseholds ,i nadditio nt oothe rdecisio n variables,respon dt oth erisk sassociate dwit hagricultura l productiona swel la smaintainin ga nacceptabl eleve lo f living; Towha texten td oris kconsideration so ffarmer saffec tth e economicefficienc yo fagricultura lproduction ; Doesris ktakin gbehaviou rdiffe rbetwee nhousehold swit h differentresourc eendowments ; Howd odemographi can dagraria nchang eprocesse saffec tth e levelo fagricultura lris kan dth eris ktakin gcapabilit yo f households. '

Itwa sexpecte d that,o nth ebasi so fresult sderive d fromth e aboveanalysis ,i tcoul db eassesse dwhethe r theimportanc eo f riskwarrant sth econsiderabl eresearc hresource srequire dt o carryou tprope rris kresearch .An di fso ,whethe r theimpac to f riskca nb esufficientl y pinpointedt ospecifi cdecisio nfield s and/ortype so ffarm-household st oallo wth eformulatio no fpolic y measurest oalleviat eth eeffec to frisk .Hence ,derive dresearc h objectivesconcerne d thefollowin gquestions : Whati sth escop efo rris kanalysi swithi nth econtex to f small-scal eagriculture ; Towha texten tca nris kspecifi cpolic ymeasure sb eexpecte d todiminis hpossibl enegativ eeffect so fris ko n agriculturaldevelopment .

1.3 Thesisoutlin e Theoutlin eo fth ethesi si sa sfollows .Chapte r2 deal swit hth e designo fth efiel dstud yan dth emethod so fdat acollectio nused . Chapter3 contain sa revie wo fliteratur ean da nassessmen to fth e present 'stateo fth eart 'concernin gchoic etheor yan dris k analysisrelate d tosmall-scal eagriculture .

Chapters4 t o8 dea lwit ha village-leve lcase-stud yconcernin g decisionmakin go frura lhousehold soperatin grice-base dfarmin g systemsunde rrainfe dconditions .Chapte r4 provide sa brie f historicaldescriptio no fth erelationshi pbetwee nlan dus e intensificationan dpopulatio ngrowth .Chapte r5 deal swit hth e structurean dorganizatio no fth efarm-househol d system.Th e variousactivit yfield scoverin gth edifferen taspect so f householdmanagemen trelate d tobot hconsumptio nan dproductio n activitieswil lb ediscussed .Thi swil lb efollowe db ya detaile d descriptiono fhousehol dresource san dincom eearnin g opportunities.Thi schapte ri sconclude dwit ha classificatio no f farmhousehold saccordin gt othei rsensitivit yt oincom erisks .I n Chapter6 difference sbetwee ncategorie so fhousehold swit h respectt oth eutilizatio no fscarc eresource sar eanalyzed .O n thebasi so fa nin-dept hanalysi so fincom ean dexpens eflows ,a n attempti smad et odelineat eshort -an dlong-ter mris kmanagemen t strategieso fhouseholds .Specia lattentio nwil lb epai dt oth e allocationo fresource sbetwee nproductiv ean dconsumptiv euses .

Chapter7 an d8 ar econcerne dwit htw ocase-studie so fspecifi c aspectso fhousehol ddecisio nmaking ,bot hrelate dt oagricultura l production.Chapte r7 deal swit hdecision sregardin gth echoic eo f riceproductio nactivities .I tstart swit ha nassessmen to f farmers'ris kcontro li nric ecro pmanagement .Withi nth econtex t ofth eintroductio no fdoubl eric ecropping ,i twil lb eanalyze d howdifferen tcategorie so ffarmer srespon d toinnovatio nrisk . Chapter8 concern sfarmers 'decision swit hrespec tt oth eus eo f fertilizeri nric ecro pproduction .Her ew ewil lspecificall ydea l withth edifficultie si nquantifyin gth evariou sparameter stha t playa rol ei nth eanalysi so fris ki ndecisio nmaking .A nattemp t ismad et oestimat eth eris kattache dt ofertilize ruse .Problem s encountered inquantifyin gsubjectiv edecisio nparameter ssuc ha s riskattitude san dperception sar ediscussed .

Chapter9 contain sa synthesi so fmajo rfinding san dreview s implicationsfo ragricultura lresearc han dpolicy . RESEARCHMETHO DAN DSTUD YDESIG N

Investigating therol eo fris ki nfarmers 'decisio nmakin gmean s primarilydealin gwit hth efollowin gtw oissues :

.ho wfarmer sten dt operceiv eth erisk sassociate dwit hincon e earningactivitie s(bot hagricultura lan dnon-agricultural ) andhousehol d incomemanagemen tstrategies ; .ho wthe yweig hth eimportanc eo fthes erisk sagains tth e importanceo fothe rattribute so fchoic eoption so r strategies.

Bothquestion sar eclosel yinterlocke dwit hth emor egenera lissu e ofho wfarmer sapproac hdecisio nproblems .Thes eresearc hissue s areinherentl ydifficul tt oanalyz ebecaus ethe yrelat et oth e innerfeeling so fpeople ,an da ssuc hd ono tallo wfo ra relatively straightforward researchstrateg ybase do ndirec t questioningprocedures .

2.1 Researchapproac h Inth eeconomi cliterature ,tw oway so finvestigatin gth e rationalebehin dindividua ldecisio nmakin gar esuggested .Th e firstapproac hstart sfro mhypothese sbase do nth eeconomi c rationality ofindividua ldecisio nmaking .I ttest sthei rvalidit y bycomparin gth epredictiv epowe ro falternativ echoic emodel s basedo nsuc hhypotheses .A sindicate d byGladwi n (1979),thi s approachdetermine sho wclosel yth ebehaviou rstudie dconform st d researchers'hypothese sabou tfarmers 'decisio nrules .Th e !• advantageo fthi sapproac hi stha ti tgive sa clea rdirectio nt o research.However ,i ncas ea theoretica lframewor ki slackin go n thebasi so fwhic hhypothese sca nb eformulated ,thi sapproac hma y atbes tprovid ea time-consuming ,iterativ eresearc hmethodology . Inth ewors tcase ,i tma yidentif yerroneou scausa lrelation sdu Q toa wron go rincomplet especificatio no fth emodel .

Thesecon dapproac hreverse sthi sprocess .Instea do f hypothesizingdecisio nprocedure stha tallo woptimizatio nan dtea t whetherpredicte d resultsconfor mt oactua lbehaviou rpatterns , thisapproac hfocuse so nth eissu eo fho wfarmer sactuall yd o arrivea tdecisions .Thi sbehavioura lapproac ht odecisio nmakin g explicitlyrecognize sman' slimite dabilit yt oproces sinformatio n and solvecomple xproblems .Throug hclos eobservatio no ffarmers ' decisionmakin g processes,i tattempt st oidentif ywha ttyp eo f choicecriteri afarmer semplo yi nwha tkin do fsituations ,an d whetherth eimportanc eattache d tocertai nchoic ecriteri adiffe r fordifferen ttype so fhouseholds .I ti sth epremis eo fthi s approach,that ,o nth ebasi so fsuc hunderstanding ,a mor egenera l theoryo fchoic eca nb edeveloped .A smajo radvocate so fthi s approach,bot hSimo n(1979 )an dDa y (1979)argu etha tsuc h researchstrateg ywil lno tonl ylea dt oa bette rdescriptiv e theoryo fchoice ,bu tma yals oimprov eou rabilit y toidentif yan d prescribebette rsolution st ochoic eproblem sfarmer sar eactuall y facingi nth erea lworld .

Inthi sstudy ,w eopte d forth elatte rapproac hbecaus eo flac ko f a satisfactory theoreticalframewor ko nwhic ht obas erelevan t hypothesesconcernin gchoic ebehaviou ro frura lhousehold snea r thesubsistenc eleve lo fliving .I nfact ,i tappear stha tdu et o thepredominan tus eo fth efirs tapproach ,th edevelopmen to fsuc h theoryha sbee nimpede drathe rtha nstimulated .

Thebehavioura lapproac ht oth eanalysi so fdecisio nmakin gi s somewhatalie nt oth eagricultura leconomist .However ,i tha sbee n extensivelyuse db yeconomi canthropologists .A sindicate db y Barlett (1980),i tinvolve sa sequenc eo fth efollowin gsteps : .Carefu ldescriptio no fcurren thousehol d strategiest oattai n alivelihoo dan dth ediversit ywithi nthos estrategie s betweenindividua lhousehol dunits ; .Determinatio no fth evariable san dcondition screatin gan d reinforcingthos edivers estrategies ; .Clarification ,i fpossible ,o fth eweigh to fsom evariable s overothers ; .Predictio no fth efutur edirection san dth elong-ter m implicationso fthos echoice sa sthe yaffec tbot hcurren tan d long-termprocesse so fagricultura lchange .

Applied toth epresen tresearc hproblem ,thi sapproac hwa s employedt orevea ldecisio ncriteri aan dmanagemen tprinciple s through:(a )identifyin gcontrast si nbehaviou rpattern sbetwee n individualhousehold san dt orelate 'suc hcontrast st odifference s inhousehol d characteristics;(b )fo rindividua lhouseholds , analyzingchange si nbehaviou rove rtim e- withi nan dbetwee n years- a swel la sdeviation sbetwee nplanne dan dactua l behaviour,an dt orelat ethe mt ochange si nth edecisio nmakin g environment.

Oncesuc hrelation sar eidentifie di tma yb epossibl et oderiv e moregenera lbehavioura lprinciple srelate dt osuc haspect sa s resourceavailability ,lif ecycl estage ,differentia lacces st o informationo rdevelopmen tinstitutions ,etc .Th eobviou sweaknes s ofthi sapproac hi stha ti tonl yallow sfo rth eidentificatio no f differencesi nhousehol d behaviourpatterns .Sinc ew ear eals o interested indeterminin gth eeconomi ccost sassociate dwit hth e strategiesfollowe d byhouseholds ,economi coptimu msolution st o choiceproblem swere ,i na sfa ra spossible ,als odetermined .A s willb eindicate d insubsequen tchapters ,excep tfo rrelativel y simplechoic eproblem ssuc ha sfertilize rapplicatio n (Chapter 8),/ determinationo feconomi coptim ai sgenerall ydifficult , particularly fordynami cchoic esituations .

Thus,th efarm-househol d unitwa schose na sth ebasi cuni to f analysisan dth eactua lbehaviou rpatter nan dunderlyin gdecisio n 10 makingproces so fthes eunit swer etake na sstartin gpoint so fth e study.Apar tfro messentia linformatio no nho wt omode lth echoic e processi norde rt otes tth eris kaversio nhypothesis ,i twa s expectedtha tthroug hsuc ha napproac hth etime-consuming , quantitativeanalysi so factivit yrisk scoul db emor eadequatel y directedtoward sthos edecisio nproblem swher ei tmattere dmost .A descriptiono fth estructur ean dorganizatio no fth efarm - household systemwil lb eprovide d inChapte r5 .

Tocove ra smuc ha spossibl eth edifferen tfield so fhousehol d decisionmaking ,th estud yfocuse do nth efollowin gdecisio n makingareas : .cro pchoic ean dresourc eallocatio nwithi nth efarm ; .cro pmanagemen tan dcas hinpu tleve lchoic ei nric ecro p production; .labou rallocatio nbetwee now nfar mactivitie san demploymen t asa wag elabourer ; .allocatio no fresource sbetwee nproductiv einvestment san d consumptiveexpenditures .

Althoughther ear eclea ranalytica ldisadvantage si nfollowin ga case-studyapproac hinvolvin ga limite dnumbe ro ffarmer s(e.g. , samplingerrors ,problem swit hstatistica linference) ,i twa s decided,fo rth efollowin greasons ,t ostud ya smal lgrou po ffarm - householdswithi non evillag edurin ga sequenc eo fyears .First , anadequat eanalysi so fdecisio nmakin ga sa proces snecessitate s closemonitorin go fchoic ebehaviou ran din-dept hinterviewin go f farmerswit hrespec tt oth ereasonin gproces sbehin ddecisions . Second,t oevaluat eadoptio ndecision san dt oproperl yasses sth e consistencyo fchoic epattern si nuncertai nchoic eenvironment s severalyear so fobservation sar erequired .Third ,t ounderstan d behaviouro findividua lhousehold sa spar to fth ewide rcommunit y setting,a nin-dept hanalysi so fth esocia lan deconomi c environmentdirectl yaffectin gchoic ei sneeded .

Although,a swil lb eindicate d below,i nth eselectio no fth e villagean dcase-stud yhouseholds ,seriou sattentio nwa spai dt o whetherthe ywer erepresentativ efo rothe rvillage si nth eare a andtypica lcategorie so fhouseholds ,car eshoul db etake nt o extrapolateresult st oth elarge rpopulation .I tshoul db e realized,however ,tha tth emai nfocu so fth estud yi st o understand generalfeature so ffarmers 1 riskbehaviou ran dasses s whetherresearc hmethodolog y inthi sfiel di sadequate .Withi n thiscontext ,observatio nerror sar emor eseriou stha nsamplin g errors.

2.2 Selectiono fth estud ylocatio n Astud ylocatio nwa sselecte di nclos eproximit yt oa researc h siteo fth e 'MultipleCroppin gProgramme 'o fIRR Ilocate di n IloiloProvince .Thi sprovinc ei son eo fth emajo rric egrowin g 11 areasi nth ePhilippine smos to fwhic hi sgrow nunde rrainfe d conditions (Luning,1981) .A tth eIRRI-sit ea numbe ro fprofoun d changeswer etakin gplac ei nth eexistin gric ecro pproductio n system.I nparticular ,th eavailabilit y ofshort-maturin gric e varietiesdevelope da tIRR I(henceforwar d namedIR-varieties )mad e ittechnicall y feasiblet ofi ttw osequentia lric ecrop si nth e rainfallpatter no fth earea .However ,th erisk sassociate dwit h thiscroppin gpatter nwer ethough tt ob esubstantial ,bot hfo rth e firstric ecro ptha trequire ddry-seedin g (viz.,drough tstres s duringth eseedlin gstage )an dth esecon dcro p (viz.,drough t stressdurin gth ereproductiv egrowt hstage) .Despit ethes erisks , itappeare d that,t osom eextent ,adoptio no fdoubl eric ecroppin g wastakin gplace .

Further,a tth etim ethi sstud ystarted ,a researc hprojec twa si n progressconcernin gth esimulatio no fcro pgrowt h- wate rbalanc e relationshipso fric ecrop sbase do ndat acollecte da tth eIRRI - site.Thi ssimulatio nmode lshowe da promisin gpotentia lt ob e employeda sa mean st oasses sproductio nrisk so frainfe dric e cropswhic hwa sconsidere d importanti nvie wo fth egenera llac k ofdat ao nwhic ht obas ea nadequat eris kassessment .

Itwas ,however ,decide dno tt oselec ta stud ylocatio nwithi nth e IRRIresearch-sit eitsel fbecaus eo fth eextende d period (4years ) farmersi nthi sare awer eexpose dt oresearcher san don-far m experimentationwhic hcoul dhav ebiase dthei rresponse st o interviews.Moreover ,i tcoul dhav einduce da na-typica lpatter n ofagricultura ldevelopment .Th eselectio no fth estud yvillag e wasbase do nth efollowin gcriteria : .Rainfall-dependen t riceproductio nha dt ob eth emajo r economicactivit yo fth eselecte d locationwhic hha dt ob e representativefo rothe rrainfe dric egrowin gi nth e Province.Clos eproximit yt oa nirrigate dare ao rth e existenceo fsmal l(partially )irrigate dpart si nth estud y sitewer econsidere d beneficialfro ma researc hpoin to fvie w asi twoul dprovid eth eopportunit y tocompar erainfe dric e productioncondition swit hirrigate dconditions . .Th erainfal lpatter nan dphysica lproductio ncondition s (soilsan dtopography )ha dt ob esimila rt oth eIRR Iresearch - sitet ofacilitat eth eus eo fth eabov ementione d simulation model.Further ,clos eproximit yt othi ssit ewoul dfacilitat e logisticsupport .O nth eothe rhand ,th edistanc ebetwee n thissit ean dth eselecte d studyare aha dt ob egrea tenoug h toguarante en otechnolog ytransfer . .I norde rt oinvestigat eadoptio ndecision san dth eimportanc e ofinnovatio nrisks ,th eai mwa st ofin da locatio nwhere ,t o someextent ,change st one wric eproductio ntechnolog ywer e takingplac eand/o rwher egovernmen tdevelopmen tprogramme s were(o rha dbeen )initiated . .Th evillag eha dt ob eo fmediu msiz ean dhav ea nacces s positiont otow nmarket san durba ncentre ssimila rt oth e majorityo fvillage si nth eprovince . 12 Ina firs treconnaissanc esurvey ,fiv epotentia lstud ylocation s werevisite d fouro fwhic hi nIloil oProvinc ean don ei nth e neighbouringprovinc eo fAntique .A secon dvisi twa spai d tothre e ofthes esite stogethe rwit hmember so fth eresearc hstaf fo fth e IRRIoutreach-sit ean dloca lextensio nofficer so nth ebasi so f whichth epresen tresearc hlocatio nwa sselected .

Theselecte dvillag ei sa predominantl yagricultura lcommunit y located2 4k mnorthwes to fIloil oCity .I ti son eo fth e4 3 villages(barrios )o fth emunicipalit y ofAlimodian .I ti s situatedalon ga 7 k munpave dmunicipa lroa dwhic hconnect stw o ruralmarke ttown s(Ma p 1).A tbot hends ,th eroa di sintersecte d bya rive rwhic hfrequentl yoverflow sdurin gth erain yseason , temporarily cuttingof fth evillag emai nconnectio nwit hth e outsideworld .Twic ea day ,regula rtransportatio nt oIloil oCit y isprovide d bya smal lloca ltruc k (jeepney).N oothe rmean so f transportationar eavailabl ean dcommutin gt oth enearb ytown si s onfoot .Th evillag ecomprise s12 5household smos to fwhic har e engagedi nself-employe dagricultur eo ra combinatio no fself - employedagricultur ean dwag e(mainl yagricultural )labour .Onl ya smallnumbe ro fhousehold si slandless .

Thiscommunit y isclos et oth eIRR Iresearch-sit ebu tha sn o directcontac twit hit .I ti sa strictl yrainfe dare awit ha smal l portionirrigate d bynatura lwells .A tth estar to fth estudy ,a fewfarmer swer eexperimentin gwit hdoubl eric ecroppin gusin gIR - varieties.Further ,i tca nb econsidere drepresentativ efo ra n extensivebel to frainfe d riceare awhic hlie sin-betwee nth e marineplai nlocate d inth esouthwes tpar to fIloil oProvinc ean d amountai nrang ewhic hextend sfro mth esout ht oth enort ho nth e westsid eo fPanay-island .Thi sare ai scharacterize d byfoothill s andminiplain sallowin gth ecultivatio no fbot huplan dcrop san d rice.

2.3 Selectiono fcase-stud yhousehold s Onth ebasi so fa villag ecensus ,hel di nMarc h 1979,2 5farm - householdswer eselected .Thi scensu sinclude dquestion so n household composition;th enumber ,location ,an destimate d sizeo f fieldscultivate dand/o rowne da swel la sthei rlandscap epositio n andtenur estatus ;fo reac hfiel dth emai ncroppin gpatter nan d cropyield s(o rcas hreturns) ;an da ninventor yconcernin gfar m andhousehol dassets .

Selectiono fhousehold swa scarrie dou tthroug hstratifie d sampling.Th esampl efram ewa ssub-divide d intosi xgroup so nth e basiso fa wealt hstatu sinde xan dstag ei nth efamil ylif ecycle . Boththes ehousehol dcharacteristic swer eexpecte dt ohav ea majo r influenceo nhousehol ddecisio nmakin gan dfar mmanagemen t strategies.Th ewealt hstatu sca nb eexpecte dt odetermine ,t oa largeextent ,th eris ktakin gcapacit yo fhouseholds .Th elif e cyclestag edetermine sth efarmer' sexperienc ewit hagricultur e andi slikel yt oinfluenc efamil ylabou ravailabilit yan d 13

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scale 1:70,000 14 expenditurepatterns .Exclude d fromth esampl efram ewere : landlesshouseholds ,olde rhousehold sno tactiv ei nfarming ,an d householdsprimaril ydependen to nnon-far msource so fincome . Samplingo fhousehold swa sno tfull yrando mbecaus eno tal l sampled farmerswer ewillin gt oparticipat ei nth etime-consumin g dailyrecordin go fcro pinput-outpu tdata .

Onth ebasi so fth edat acollecte d throughth evillag ecensus ,i t wasdifficul tt oarriv ea ta stratificatio no fhousehold s according toa relativ ewealt hstatu sindex .Th emai ndeterminan t ofpotentia lwealt h- are acultivate dand/o rowne d- wa sbase do n farmers'estimate san da ssuc ht osom eexten tunreliable .Apar t fromthi sproblem ,are asiz ewa spossibl ya poo rindicato ro f productionpotentia lgive nth esubstantia lvariatio ni nlan d quality.Further ,i tturne dou tt ob edifficul tt oge treliabl e estimateso nadditiona lincom ederive d fromlivestoc kproductio n andnon-far msources .Hence ,onl ya roug hclassificatio nint ohig h andlo wincom ehousehold scoul db emad eo nth ebasi so flan dare a andgros scro pproductio npe rcapita .A consistenc ychec kwa smad e withothe rwealt hindicator ssuc ha sth equalit yo fth ehouse ,th e presenceo fproductiv easset s(ric emill ,ric ethreshers ,draugh t animals)an dconsume rdurable s(radio ,television ,furniture) ,an d theamoun to fric ei nstock .Moreover ,afte rhousehold swer e classified,a furthe rconsistenc ychec kwa smad ewit ha classificationcompile db yon eo fth eresearc hassistant s- wh oi s aresiden to fth evillag e- whic hwa sbase do na subjectiv e rankingo fhousehold sfro mhig ht olo wwealt hstatus .A ta late r stagei nth estudy ,a mor eprecis emeasur eo fwealt hwa s determinedo nth ebasi so faccurat efiel dmeasuremen tan d includingdifference si nlan dproductivit y (Chapter5) .

Thedefinitio no fa lif ecycl estag einde xdi dno tpos ean y specificproblems .Thre ephase si nth edevelopmenta lcycl eo fa householdwer edistinguishe do nth ebasi so fth eag eo fchildre n andthei rpotentia lparticipatio ni nth elabou rproces s(Chapte r 5). Apartfro mthi sdiscret eclassification ,a continuou srankin g indexwa sdevelope dwhic h- apar tfro mth eabov ecriteri a- includeda sadditiona lcriteri a (a)th eduratio na househol dwa s withinon eo fth eabov edefine d lifecycl estage san d (b)th e numbero fyear so fmarriage .

2.4 Datacollectio n Directly followingth eselectio no fth e2 5case-stud yhouseholds , anin-dept hbenchmar k surveywa shel dconcernin g farmmanagemen t inth epreviou scro pseaso no f1978-79 .Fo rindividua lcrops ,dat a werecollecte do nplantin gan dharvestin gdate(s) ;labou rus eb y operationbroke ndow nint ofamily ,hired ,an dexchang elabour ; typean damoun to fothe rcro pinput suse dsuc ha sfertilize ran d pesticides;typ eo fharvestin garrangemen tan damount sharvested ; andfarmers 'opinio nabou tth eyiel da swel la smai nfactor s causinglo wyields . 15 Atth esam etime ,a roug hsketc ho fth efar mwa smad eindicatin g theapproximat elocatio no fal lindividua lparcel s(continuou s areaso fsimila rlan dqualit yan dtenur e status),thei rdistanc e fromth ehomestead ,a swel la sth eshap eo fbot hth eparce lan d theindividua lboxe s(smal lplot ssurrounde db ybunds )withi neac h parcel.Further ,th etenur estatu so fparcel swa srecorded ,th e typeo fsoil ,th elandscap eposition ,th enumbe ro fyear s cultivated,a swel la sspecifi cproblem srelate dt oth e cultivationo feac hparcel .Soil san dlandscap eposition swer e classified accordingt oth eloca lnomenclature .Afte rth e benchmark surveywa scompleted ,parcel swer emeasure du pt oth e individualbo xsize sb ya nexperience d researchassistan tfro mth e IRRIresearch-site .A ta late rstage ,th elocatio no fparcel s could beexactl ydetermine do na detaile dare ama pcompile dfro m aerialphotograph s (Map2) .

Afterth ebenchmar k survey,th egrou po f2 5case-stud yhousehold s wasintensivel ymonitore ddurin ga perio do fthre eyears ,fro m April 1979unti lMarc h 1982.A dail yrecordin gsyste mwa sdesigne d tomonito rfar mmanagemen tactivitie san drecor dcro pinput-outpu t data.Fo rth efirs tyear ,farmer swer egive na dail yrecor dfor m eachwee k (statedi nth eloca ldialect )o nwhich :managemen t operationscoul db eindicate d foreac hcro ptogethe rwit hth etim e spento never yoperatio nspecifie dfo rdifferen ttype so fmanua l labour(husband ,wife ,children ,hired ,exchange )a swel la s draughtanima lan dmachin euse ;cos to fhire d labour;type ,amoun t andcos to fothe rinput sapplied ;an dth eamount sharveste dan d outputprice sreceived .Initially ,al lfarmer swer eassiste di n fillingou tthes eforms ,bu tgraduall ymos to fthe mwer eabl et o dos ob ythemselves .

Inorde rt ochec kth eaccurac yo fth erecordings ,dat afro mth e dailyrecor d sheetswer edirectl ytransferre d tocro pbudge tform s onwhic hcalculation swer emad eo na pe rhectar ebasis .The ywer e checkedagains tstandar d timebudget sfo rth evariou scro p operations(hig han dlo wrequirement sspecifie db ycro pan dsoi l type)base do na group-concensu so fa numbe ro ffarmers .I ncas e recordingsdeviate d toomuc hfro mth estandar doperatio ntime ,th e recordingwa sre-checke dwit hth efarmer .

Afterth efirs tyea ro fmonitoring ,th eforma to fth edail yrecor d formwa schange dt oa mor estructure ddesign .Fo reac hparcel , farmerswer egive na separat eshee tconsistin go fa matri xwit h thecolumn srepresentin g theday so fth emont han dth erow s representing theboxe so fa parcel .Farmer swer erequeste d tomar k everyoperatio no nth especifi cda yan dbo xsuc hoperatio nwa s carried out,b yusin gpre-code dabbreviation so fth eloca lwor dfo r thevariou soperations .Th ebotto mrow swer ereserve d forth e usualinformatio no nth etim ean dcas hspen to nlabou ran dothe r cropinput sa swel la scro poutpu trecordings .Thi sforma tallowe d aneasie rchec ko nwhethe rth eusua lcro pcar eoperation swer e included inth efor man dals ofacilitate da neasie ran dmor e timelytransfe ro fdat at oth ecro pbudge tsheets . 16

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4-> D 17 Eachyear ,befor eth estar to fth ecro pseason ,farmer swer easke d forthei rfar mplan sfo rth ecomin gseason .Fo reac hparcel , questionswer easke dabou tth eplanne dcroppin gpatterns , includingplantin gan dharvestin gdates ;fall-bac k strategiesi n caseo fa lat eonse tand/o rearl ydeclin eo fth erainfal lseason ; andplanne d inputlevels .I nth ecours eo fth ecro pseason ,actua l farmoperation swer eplotte do na croppin gsyste mchar tindicatin g cropareas ,an ddat ean dtyp eo foperation sfo ral lparcels . Unexpected deviationsfro mth efar mpla nwer ediscusse dwit h farmers,an dbiweekl y yieldexpectation so ffarmer swer euse dt o keepi ntouc hwit hthei rfeeling sregardin gth estatu so fthei r crops.

Ales sintensiv esurve ymetho dwa suse dt orecor dhousehol dincom e andexpenditur edata .Th efirs tyea rinvolve da back-recordin g surveycarrie dou ti nFebruar y 1980.Monitorin go fincom ean d expensesdi dno tstar tearlie rbecaus eo fproblem stha twer e expectedwhe naskin gsuc hsensitiv equestion sa ta nearl ystag eo f theresearc hproject .However ,th eback-recordin g didno tpos ean y specificproble mdu et oth eavailabilit yo fdat ao ncro pincom e andexpense san dwag elabou rincom ederive d fromth edail y recordingsheets ;loa nacquisitio nan drepaymen tdat acollecte d througha specia lstud yhel di nFebruar y 1980;an dric estock sa s ofMarc h 1979obtaine ddurin gth einitia lbenchmar k survey.Fo r theothe rtw oyears ,incom ean dexpens edat awer erecorde d monthly.Specia lattentio nwa spai dt oric estoc kan dcredi t management.Eac hmonth ,calculate d ricean dcas hbalance swer e checked forconsistenc yagains tth eactua lric einventor yan dcas h savings.

Onth ebasi so fabov eindicate ddata ,in-depth ,open-ende d interviewswer ehel dwit heac hfarme rconcernin g lastyear' sfar m andhousehol dmanagemen tan dcro pproductio nplannin gfo rth e comingseaso na tth een do fth efirs tan dsecon dyea ro f monitoring.Throughou tth efiel dwor kperiod ,shor tsurvey swer e conductedconcernin gissue sno tdirectl ydeal twit hi nth eabov e monitoringactivities .Amon gothers ,thes esurvey sinclude dtopic s sucha sth einfluenc eo frura ldevelopmen tprogrammes ,th e functioningo fth eloca lcredi tsystem ,a stud yo nfarmers 'ris k attitudesan dperceptio no ffertilize r response.Thes estudie s willb ediscusse d inmor edetai li nth erelevan tchapters . Furthermore,considerabl eeffor twa smad ei nth ereconstructio no f thevillag ehistor ywit hrespec tt odemographi ca swel la s agriculturaldevelopment ,th eresult so fwhic har epresente di n Chapter4 .Th emai nsource so finformatio nuse dwer efamil yan d farmlan dhistorie sa swel la sinterview swit hol dpersons .

Theabov esurve yactivitie swer esupporte db yinterview swit hke y informantsan dow nobservations .Durin gth einitia ltw oyear so f thestudy ,a permanen tsta yi nth evillag efacilitate dm ywif ean d met ohav eclos ean dfrequen tcontact swit hfarmer san dthei r wives.Thes eindividua lcontact sa swel la sforma lan d(mor e often)informa lgrou pmeeting swit hvillag epeopl ewer ever y 18 valuablei ncomin gt ogras pwit hth ewa yo flif ei nth ecommunity . Withoutthi sinformatio ni twoul dhav ebee nimpossibl et o adequatelycarr you tthi sstudy .

2.5 Presentationo fdat a Inth epresentatio no fdat aloca lmeasure sar ea smuc ha spossibl e convertedint ostandar dmetri cquantities .Ther ei sa well-define d andelaborat esyste mo floca lvolume-base dmeasure s(particularl y forgrai nproducts) ,probabl y resultingfro mth ewidesprea d occurrenceo fproduc tsharin garrangement si nth evillage .Th e standardmeasur efo rgrain si sth epanig awhic hi sa woode nches t ofexac tmeasurement sreinforce dwit hstee lmountings .Measuremen t ofgrain salway soccur safte rgrain shav ebee nthoroughl ysun - dried.Fo rIR-varietes ,on epanig aroughl yequal s1 4k go f unmilledric e (palay)an d 15k go fth eloca lBE- 3ric evariety . Threepaniga smak eu pon ecava nwhic hi sroughl yth esiz eo fa fertilizerbag ,wherea stw ocavan sequa lon ebolto ,a measur e commonlyuse di ntradin gric eo rcorn .A cava ni sals oequa lt o2 5 gantas,whic husuall yi sa baske tuse dfo rth emeasuremen to f productslik emungbean so rcowpe aan dals ofo rth eapplicatio n rateso ffertilize ran dseeds .Th esmalles tmeasur ei sa salmo n namedafte rth esalmo nti ntha ti suse dfo rthi spurpose .Finally , acalte xo rmobi lequal son elitre ,als oname dafte rth eoi lcan s used forthi smeasure .

Monetarydat awil lb epresente d interm so fU Sdollar s ($).A tth e starto fth estud yperio d (1979),th eofficia lexchang erat eo f thePhilippin ePeso swa sPeso s7.41 5t oth edollar .Fo rsubsequen t years,monetar yvalue swer ecorrecte d forth epric eincreas eo f palaytha toccurre ddurin g thestud yperiod .Thi sincreas ei nric e priceswa squit esimila rt oth eincreas ei nrura lwage s (Section5.2.5) .Thus ,th eVillag ePala yPric eInde x(VPP-inde x with1979-8 0= 100 )i suse da sa deflato rfo rth eseason so f 1978-79( =95) , 1980-81 (=116) ,an d1981-8 2( =126) .Thi simplie s thatth erea lvalu eo fth eemploye dmonetar yuni t ($)i sconstaa t betweenyear si nterm so fth eamoun to fpala yi tca nbu ya tth e localmarket ,i.e. ,$ 1equal s6. 8k gpalay . DECISION THEORY ANDRIS K ANALYSIS FOR SMALLFAR M AGRICULTURE: CONCEPTUAL ISSUESAN DPRACTICA L PROBLEMS

The purpose of thischapte r ist oelucidat e some of the conceptual issuesan d practical problems inanalyzin g the influence of risk and uncertainty on farm-household decisionmaking .Thi s chapter does not pretend to provide a comprehensive review of themassiv e amount of literature concerning decision making and risk taking. To keep this reviewwithi n manageable proportions,th e focus will be on the economic literature related to decision making concerning themateria l well-being of small rural households in developing countries,an d in particular how risk and uncertainty may influence choices of farm-households.Othe r issues related to decision making of farm-householdswil l receive dueattentio n in the relevantchapters .

3.1 The family labour farm Households are faced withmultipl e choices inman y areas regarding production and consumption.Fo ragricultura l production,the y have to decide onwha t techniques of production to usean d how to allocate their resources of land, labour and capital among the alternatives open to them.Consequence s of production decisions may berealize d in the short term,no texceedin g one growing season,o rma y extend far"into the future in case of investment and loan taking decisions.Household s also have to decide on marketing strategies.The y must decide not only what toproduce , butho wmuch ,whe nan d where to sell it.Apar t from production and marketing decisions,th e household has tomak e a large number of decisions in such fieldsa s food consumption,purchas e of consumer durables, housing, saving,educatio n of children,etc .

Household decisions are influenced by household needsan d goals as well asb y the resources available to the household and constraints imposed by the environment.Househol d needs determine short term decisionmakin g targetsan d cover such aspectsa s basic food requirements,cas h topurchas e other necessary consumer goods, shelter,healt h care etc.Goal san d aspirations give direction tobehaviou r patterns and choiceswit h a focuso n the future realization ofwants .Resource s do not only include land, water,labour ,capital ,etc. ,bu t also social resources such as information about agricultural methods,securit y tieswit hwell-to - do families,socia l influence,an d links_to__£he_government ~\ bureaucracy.,far lIi t&tin g~flie~^rticipation_j ;njgovernmeJit-siip43LOXt ^programmes.Finally , tne~ehvironmentwil l impose certain restrictions on the choice options open tohouseholds .The y may be of a technical nature (e.g.lan d and water,pes t and diseases), in the sphere of economic constraints (e.g.cro p input and market prices), institutional and infrastructural limitations,socia l restrictions,etc .

Inman y economic studies dealing with decisionmakin g of rural 20 householdsi ndevelopin gcountries ,i tha sbee npopula rt ous eth e standardmicro-economi c theorya semploye d forth eanalysi so f commercialfirm soperatin gi nwester ncountries .Suc hstudie s (implicitly)assum etha tproductio nan dconsumptio ndecision sca n beanalyze d separately;tha tal linput san doutput si nth e productionproces sshoul db evalue dagains tmarke tprices ;tha t perfectknowledg eexist sregardin gproductio npossibilitie san d outcomeso factivities ;a swel la stha tth eai mo fa singl e decisionmake ri st omaximiz eon eo ranothe rutilit yvalue .

Asa nearl ysource ,Chanyano v (1925)argue d thatth esemi - subsistencefarm-househol dwoul dno t.behav ei nth esam ewa ya sa profitmaximizin gcommercia lfarmin genterprise .Chayano v conceptualized the 'familyfarm 'a sbot ha nenterpris ean da domesticgroup ,wit hal ldecision sservin gth erequirement so f businessan do fth efamil y (Chayanov,1925) .Mello r (1963)an d Nakajima(1969 )demonstrate d theapparen tsimilarit ybetwee nth e theoryo fth efamil yfar man dtha to fconsume rchoice .Th e assumptiono nwhic hthi sanalog yi sbase di stha tth efarm - householdi sregarde da sa 'closedeconomy 1 interm so flabour , and thusit srelationshi pt oth elabou rmarke ti sno tconsidere d (Hart,1978) .

Chayanov proposesth elabour-consume r balancea sa too lt o understand familyfar mdecisions ,an dspecifie sth ecriterio no f returnst ofamil ylabou ra sth eappropriat emethodolog yt o understandagricultura ldecisions .Chayano vassert stha tfarm - householdsmak edecision sbase do nth egros sproduc to factivitie s minuspaid-ou tcosts .Thus ,th egoa lo fth efamil yfar mi n allocativedecision si sth ehighes tretur nt ofamil ylabour .Th e householdweigh sit ssubsistenc erequirement stogethe rwit hth e drudgeryo ffamil ylabou rrequire d toattai nthes erequirements . Thefamily' sneed sar edetermine db yth esiz ean dcompositio no f thefamily ,wherea sth edrudger yrequire d isdetermine d byth e specificfar mconditions .Thus ,fo rcondition so fampl e availabilityo fland ,th eintensit yo ffamil ylabou rus ean dth e sizeo fth efar mholdin gar eprimaril ydetermine d byth e demographicstructur eo fth ehousehold ,i nparticula rth erati o workers/non-workers,an dresult si nwha tChayano v calls'th e degreeo fself-exploitation' .

Forcondition so fhig hman/lan dratio san dimperfec tlan dmarket s (applicablet oth epresen tstud yvillage) ,Mello remphasize dland ; holdingsiz ea sth emajo rdeterminin g factoro fhousehol d differencesi nth eintensit yo ffamil ylabou rinput : Familiestha tcontro lonl ysmal lamount so flan dar e forcedb ysubsistenc epressure st omov ewel lou to nth e labourinpu tfunction ,graduall yraisin gaverag e productpe rworke ri nth efamil ylabou rforc eclose rt o thesubsistenc elevel .I ncontrast ,a famil ywit h controlo fa substantia lamoun to flan dpe rworke rwil l beabl et ooperat ewel lbac ko nth elabou rinpu t 21 schedulean dstil lprovid esufficien tproduc tt o achievea culturall yacceptabl estandar do flivin g (Mellor,1963) .

Nakajima(1969 )showe dth esimilaritie sbetwee nth e analysiso fChayano van dMello rb yshowin gthat ,i nth e absenceo fa labou rmarket ,th emargina lproductivit yo f labouri n 'subjectiveequilibrium 'wil lvar yaccordin gt o differencesi nbot hphysica lasset san dhousehol dsiz e /composition.H eshowe dtha ti na pur esubsistenc e situationwithou ttrad ei ngood san dlabour ,applicatio no f the 'closed-economy'mode llead st oa farm-househol d equilibrium inwhic hth elevel so fproduction ,leisure ,an d consumptionar eal lsimultaneousl ydetermined .

However,farm-household sar eseldo m (ifever )isolate dfro m alltradin gpossibilitie si ngood san dlabour .T oth e extenttha thousehold sspecializ ei nth eproductio no f certaingoods ,an dtrad esurplu sgood san dlabou rfo rgood s thatprovid egreate rutility ,consumptio nan dproductio n decisionsbecom eles sinterdependent .Wit hperfectl y competitivemarket sfor_labou ran dgoods ,jth esimultaneit y betweenconsumption ,ieisure,_andproductio ndecision s breaksdown .Unde rthes econditions ,th efarm-househol d equilibriumma yb ederive d througha two-stag eproces s employingth estandar deconomi ctheor yo fth ecapitalisti c firm.First Lth efar mproduction..probJ^m_i ssolved ^throug h profitmaximization ,assumin gn oconsideratio nfo rris kan d providedtha tal llabou ri svalue dat _th emarke twag erate . Second,give nincom ean dth emarke twage_ratej,__th e household'sconsumptio no fgood san dleisur ei sdetermined . Thisformulatio no ffarm-househol d behaviouri spopula ra s itallow sth eestimatio no fa nindirec tutilit yfunctio n derivedi nterm so fprice san dincom eindependentl yo fth e farm'sproductio nfunction .T oestimat esuc hutilit y functions,recen tadvance shav ebee nmad ewit hth eus eo f thelinea r (logarithmic)expenditur esyste m (Hart,1978 ; Laue tal , 1981).

Thus,give nth eexistenc eo fa perfec tlabou rmarket ,al l households- irrespectiv eo fthei rlandholdin gsize -or familylabou rresource s- ca nallocat ethei rfamil ylabou r resourcesi nsuc ha waya s toattai na simila rmargina l productivityo ftota llabou r (i.e.,famil yplu shire d labour),i.e .th emarke twag erate .Unde rperfec tlabou r marketconditions ,th efarm-househol dma yb eregarde da sa n economicuni twhic hi nth efirs tplac ebehave sa sa 'fir m maximizing profit'and ,i nth esecon dplace ,a sa 'labourer'shousehol dmaximizin gutility '(Nakajima ,1969) . Thisimplie sa certai ndeman dfo rtota llabou rbu tdoe sno t implyan yparticula rleve lo ffamil ylabou rinput .Whe nth e familydevote smor etim et owork ,th ehousehol d enjoysa gaini nincom etha tca nb euse dt oincrease„yje_amounts__q f 22 marketedgood so rhousehol d production,consumed.I n conformitywit hth etheor yo fth emargina lutilit yo f leisure(o ralternatively ,th edis-utilit yo fwork ,a conceptwhic hi ssimila rt oChayanov' s 'drudgeryo f labour'),i ti sargue dthat ,i fth efamil yattempt st o maximizesatisfaction ,tim ewoul db eallocate d sotha tth e satisfactionlos tthroug hth elas tuni to fleisur e sacrificedwoul db ejus toffse tb yth esatisfactio ngaine d fromth eus eo fth eadde dincom ederive d fromth e additionalwor k(Barnu man dSquire ,1979) .Hence ,als o underperfec tlabou rmarke tcqnditions,_household swit h

resjpectt oth eintensity ^o ffamil ylabour ^use ia swella s thereturn st ofamil ylabour .However ,th emarginal.retur n tofamil ylabou rwil lno tfal lbelo wth emarke twage _rate . Familylabou rinpu ti nself-employe dagricultura l activitieso nsmal lfarm swoul db eles stha npredicte db y HellofTs~Tclosec feconomy rmodel ,wherea so nlarg efarm si t is_greater(Hart ,1978) .Participatio ni noff-far mlabou r enablesth esmalle rhousehold st oattai na highe rleve lo f welfaretha nwoul db eth ecas ei fi tspend sal lit stim eo n self-employedagricultura lactivities .

Apartfro mth efac ttha ti nmos trura leconomie so f developingcountrie smarket sar enotoriousl yimperfect ,i f riskconsideration sar eintroduce d inth efarm-househol d decisionmodel ,th eseparatio nbetwee nproductio nan d consumptiondecision sdoe sno tnecessaril yhold .I nth e absenceo fo rrestriction st oalternativ eincom e earningimportunities ,fo rhousehold swit hlimite dlan d resourcesfamil ylabou rpresent sitsel fa sa noverhea d rathertha na sa variabl ecost .T oth eexten ttha tlabou r

Forbot hreasons ,i tseem smandator yt oanalyz eproductio n fl^LtV^ [ QX* Af\\ nVI 23 decisionswithi nth econtex to fth efarm-househol d takingint o accountth einterrelationshi p betweenproductio nan dconsumptio n decisions.I ncas emarke tdeman d forlabou ri slimite dan d employmentopportunitie sfo rlabou ri nactivitie soutsid eself - employedagricultura lactivitie sar erestricted ,poo rhousehold s canbeexpecte d toexploi tthei rfamilylabou rresource sin ^ "agriculture to afulTer extentagairTsT~~iowe rreturn scompare dt o richerhouseholds .

Abovew ehav ealternativel y usedth eter m 'farmer'an d 'farm- household'a sdenotin gth esam eentity .I ti srealized ,however , thatth eassumptio ntha ton esingl edecisio nmake ract so nbehal f ofth ehousehol dha sbee nseriousl ychallenged .Fro mth e increasingnumbe ro fwome nstudie stha tspecificall y dealwit hth e divisiono fdecisio nmakin gtask swithi nth ehousehold ,i tha s becomeincreasingl yapparen ttha tther ema yb epossibl econflict s ofinteres tbetwee nhousehol dmember s(Jones ,1983) .Wh oactuall y decidesi sculture-specific ,depend so nhousehol dcompositio n (lifecycl estage )an dpersona lcharacteristic so fhousehol d members,an dma yvar yaccordin gt oth etyp eo rfiel do fdecisio n concerned (Chapter 5).Fo ra nexplici tanalysi so fth erol eo f womeni nfarm-househol d decisionmakin gan dthei rparticipatio ni n incomeearnin gactivitie sw erefe rt oth ecomplementar y studyb y Res (1983).

3.2 Theris kfacto ri nagricultura ldecisio nmakin g Theintroductio no funcertaint y intoth eabov eframewor ko ffarm - household decisionmakin gsubstantiall ycomplicate snormativ e economicanalysis ,eve nwhe non econcentrate so nth eproductio n sideo ffarm-househol dmanagement .Thi si sprimaril ydu et oth e facttha tsingl edeterminat eoutcome so factivitie sar ereplace d byarray so fpossibl eoutcomes ,i.e. ,know noutcome sar ereplace d byexpectation sdu et oth evariabl einfluenc eo fexogenous ,non - controllablefactor so nth eoutcom eo factivities .

Uncertainty infarm-househol d decisionmakin gbasicall y stemsfro m twobroa d typeso finfluences .Th efirs tse to finfluence si s composed ofso-calle d stochasticenvironmenta lfactors .Suc h influences('State so fNature' )ma yconsis to fphysica lan dmarke t pricerelate d factors.Uncertai nphysica linfluence sca nb e divided intoclimati can dbiologica lfactors .Marke tpric e uncertainty iscompose do fvariabilit yo finpu tan dproduc t prices,bu texclude spric evariation sdu et oregula rpric e fluctuationpatterns .B ynature ,th ebehaviou ro fthes efactor s cannotb einfluence d byth eindividua ldecisio nmaker .I ncontras t withindustria lproduction ,agricultura lproductio nprocesse sar e usuallystrongl ydependen tupo nthes eenvironmenta linfluence sth e effecto fwhic hcanno to ronl yi npar tb econtrolle d byfarmers . Thedegre eo fcontro lwil ldepen do nth etyp eo fagricultur ean d theleve lo femploye dtechnology .

Asecon ddistinc tsourc eo funcertaint y isth ebehaviou ro fothe r 24 decisionmaker san dorganizations .Thi styp eo funcertaint yi s importanti fth efeasibilit yo routcom eo factivitie si sdependen t upondecision smad eb yothe rdecisio nmakers .A smentione db y Berry (1980),par to fth ereaso nfo rth einadequac yo fdecisio n makinganalysi sa sa guid et oexplainin gan dsupportin geconomi c changei stha ti tconsider sindividual s(o rhouseholds )i n isolation.However ,bot hopportunitie san dconstraint st owhic h individualsrespon dar eofte nth eresul to finteraction samon g individualsan dgroups .Thi styp eo funcertaint y ispresen ti n situationswher efarm-household sacquir elan dfro mlandlords ,ar e dependentupo npoor-functionin g inputan doutpu tmarket san d agriculturalextensio ninstitutions ,restricte dcredi tmarkets , etc.I ti sals opresen ti nsitution swher ebehaviou rpattern sar £ newan dno tye taccepte db ya community .I ncontras twit hth e behaviouro fclimatic ,biological ,an dmarke trelate dfactors , uncertaintyarisin gfro mthi ssourc ema yb epartl ysubjec tt o controlb yth eindividua ldecisio nmake rwh oma yattemp tt o actively influenceth ebehaviou ro fothe rindividual san d organizations.O nth eothe rhand ,uncertaintie so fthi skin dar e muchles spredictabl ecompare dt oth estochasti cenvironmenta l factorsimplyin gtha tofte nsuc hinfluenc ecanno tb eexercised .

Withuncertaint y subjectiveelement sar eintroduce dint odecisio n normativeanalysi swhic hpreven tth edeterminatio no fa singl e optimumsolutio nt ochoic eproblems .Decisio nmakin gunde r uncertainty involvespersona lo rsubjectiv ejudgement sabou t(a ) thechance sassociate dwit hth evariou soutcome stha tmigh taris e froman yparticula ractio n(ris kperceptions) ,an d (b)th e desirabilityo feac hactio ni nterm so farray so fpossibl e outcomes (riskpreferences) .Becaus eo fthes esubjectiv eelements , thebes toperatin gcondition stha twoul db eappropriat efo ron e personma yb equit edifferen tfo ranothe r (Dillon,1977) .Prio rt o considering farmers'ris kperception s(Sectio n3.3.1 )an d preferences(Sectio n3.3.2) ,th evariou stype so frisk stha tma y resultfro muncertai nphysical ,institutional ,an dhuma n influenceswil lb ediscussed .

Inth eliterature ,on eencounter sa larg evariet yo fris k concepts.Distinction si ntype so fris kar ebase do nfactor ssuc h as:

Below,thes evariou stype so fris kwil lb edeal twit hfro mth e 'bottom-up',startin gwit hindividua linpu trisk si nth ecro p productionproces san dconcludin gwit hris kconcept sa tth efarm - household level.Th etyp eo ffactor stha tshoul db eaccounte dfo r inassessin g suchrisk seithe rempiricall yo rsubjectivel ybase d onfarmers 'informatio nwil lb eindicated .I nChapte r8 ,th e variousmethod st oestimat eproductio nrisk swil lb ediscussed , particularlywit hrespec tt orespons eris ko findividua lcro p inputs.

3.2.1 Physicalcro pproductio nris k Inassessin gcro pproductio nrisk si tshoul db eclea rfro mth e onsettha tobserve dvariabilit yi nphysica loutpu to fcro p productionactivitie sma yresul tfro mvariou sfactor sinfluencin g thecro pproductio nprocess .A broa ddistinctio nca nb emad e betweenthre etype so ffactor s(Anderso ne tal , 1977): .decisio nfactors :factor so fproductio ntha tar eunde rth e controlo ffarmer ssuc ha slan dpreparation ,weeding , \ fertilizeran dpesticid einputs ; .fixe dexogenou sfactors :productio nfactor stha tar ebeyon d thecontro lo fproducer sbu thav eknow nvalues ,e.g. ,soi l type,natura lfertility ,etc. ; .uncertai nexogenou sfactors :productio nfactor sno t controlled byfarmer stha tma yhav eknow no runknow nvalue s atth etim edecision sar emad eabou tth econtrolle dinputs , i.e.,th eearlie rdiscusse d 'Stateso fNature 1 causedb y uncertainenvironmenta linfluences .

Apartfrom ,thes efactors ,observe d variabilityi noutpu ti sals o causedb ydifference si nmanagement .Thi sinpu tfacto raccount s fordifference si nth eabilit yo ffarmer st oeffectivel yus e inputsunde rthei rcontro lan dreduc eth eeffec to fadvers e environmentalfactor so ncro pgrowth .

Inassessin g physicalcro pproductio nrisk ,th eai mi st o determineth econtributio no fth euncertai nexogenou sfactor s (riskfactor sfo rshort )t ooutpu tvariability .Th econtributio n ofothe rfactor sshoul db eaccounte d fora smuc ha spossible .Th e influenceo fris kfactor so nagricultura lproductio nca nb e analyzed atdifferen tlevel so faggregation .A tth elowes tleve l ofaggregation ,ris kfactor sma yinfluenc eth eeffectivit yo f individualcro pinput sand ,thus ,decision srelate d toth eleve l ofapplie dinputs .

Toestablis hwhethe rinpu tus ei srisky ,i tshoul db edetermine d 26 whetheryiel dvariabilit y increaseswit ha nincreasin Rus eo fa particularinpu tan dwhethe rth emagnitud e (inabsolut eterms )i s suchtha ti ti svisibl et ofarmers .Althoug hth eoutpu to fcro p productionactivitie sma yb evariable ,suc hconditio ni sno t sufficientt oconclud etha tinpu tus ei srisky .T oth eexten ttha t yieldvariabilit y isindependen to fth eamoun to finpu tapplied , inputris ka ssuc hdoe sno texist .Thus ,a distinctio nshoul db e madebetwee nyiel dris kan dinpu trespons erisk .Th eforme r representsth evariabilit yi nyiel ddu et oth einfluenc eo fal l environmentalfactor stake ntogether ,wherea sth elatte r specifically pertainst oth erelativ eriskines so fth eus eo f particularinputs .

Theexten tt owhic hris kfactor swil lcaus einpu trespons eris k willdepen don : ' .Th etyp ean ddegre eo finteractio nbetwee ninpu tfactor sao d riskfactors .I nthi srespec ta distinctio nca nb emad e betweenprotectiv ean dnon-protectiv efar minputs ; .Th eexten tt owhic hris ksituation soccu rprio rt oth etim e inputdecision shav et ob emad e(timin go finpu t application); .Th eabilit yo ffarmer st oprotec tthei rcrop sfro mth e influenceo fthes elatte rris kfactor sthroug hadequat ecrp p managementpractice s(ris kcontrol) .

Protectivean dnon-protectiv einput s Inassessin gth eris ko finpu tuse ,i ti susefu lt oloo ka tth e specificpurpos eo fth einput .O nth ebasi so fwhethe rinput sat e meantt ocontro lenvironmenta lris ko rnot ,a distinctio nca nb e madebetwee nprotectiv ean dnon-protectiv einput s(Binswanger , 1979).

Protectiveinput sar eaime da treducin gth elikelihoo do flo w productionoutcome swithou tnecessaril yincreasin gth epotentia l yieldo fa nactivity ,i.e. ,th eyiel dunde rbes tmanagemen t practiceswithou tbein gadversel yaffecte d byth eenvironment . However,protectiv einput softe nhav eth edua leffec to f increasingbot hth eexpecte dgros syiel dan dreducin gth e probabilityo flo wyields .The yma yinclud elabou rinput s (weeding,erosion/wate rcontrol ,traditiona lpes tcontro l methods),cas hinput s(insecticides ,herbicides) ,an dcapita l investments(irrigation ,anti-erosio nworks) .A furthe r distinctioni nprotectiv einput sca nb emad ebetwee nprofilacti c andcorrectiv einputs .Th eforme rtyp eo finput si sapplie d irrespectiveo fth eoccurrenc eo fadvers econdition ssuc ha sth e pre-emergenceapplication so fherbicide san dearl yseaso n sprayingso finsecticides ,wherea sth elatte rar eapplie dwhe na cropstres sconditio nha sdevelope dan dha spasse da certai n threshold.T oth eexten ttha tnegativ einfluence so ncro pgrowt h cannotb econtrolle d throughth eus eo fprotectiv einputs ,farmer s stillhav eth eoptio no fremedyin gth eeffect so fadvers ecro p 27 conditionsonc ethe yhav eoccurred .Suc hmethod swil lb e particularly importantfo rcro psystem swher edirec tenvironmenta l controli slow .

Non-protectiveinput sar eprimaril ymean tt oincreas eth e potentialyiel dwithou tnecessaril y reducingth eprobabilit yo f lowreturns .Fertilize ri sa typica lexampl eo fa non-protectiv e input,although ,t osom eextent ,i tma yals oreduc eyiel drisk . Forinstance ,fertilize rma yfacilitat ea bette rroo tsyste m development providingth ecro pwit ha highe rdrough tresistance .

Timingo finpu tapplicatio n Agriculturalproductio nprocesse sar etypicall ysequentia li n naturean dnecessaril yinvolv eth eeffluxio no ftime . Environmentalconditions ,choices ,an dconsequence swil lprobabl y faceth edecisio nmake ri noverlappin g sequencesi nth ecours eo f theproductio ncycl ean dfarmer sar elikel yt omak eus eo fthi s informationwhe ndecidin gt oappl yinput so rt ocarr you tcertai n operations.

Timema yinfluenc ecro pinpu tdecisio nmakin gi ntw oways .O nth e onehand ,wit hth eprogressio no ftim ebette rdecision swit h respectt oinpu tus eca nb emad ea smor einformatio nbecome s availableconcernin g thestatu so fenvironmenta lconditions .O n theothe rhand ,th eeffectivit y ofapplie d inputsma ydeclin eth e laterthe yar eapplie di nth ecro pcycle .Timin go finpu t applicationswil lthu sbecom ea facto ri nth eris ktakin gprocess . Apossibl edeclin ei nth erespons et oinput sshoul db eweighe d againsta possibl eincreas ei nth eefficienc y (includingris k reduction)wit hwhic hdecision sca nb emade .Hence ,apar tfro m directlycontrollin genvironmenta linfluence sthroug hth eus eo f protectiveinputs ,farmer sma ypostpon ecertai ndecision sunti l criticalris kperiod shav epasse dand/o radjus tinpu tlevel st o actualcro pcondition sonc ea cro pstres ssituatio nha sdeveloped .

Theapplicabilit yan deffectivit yo fth elatte rtw ocontro l methodst oreduc erespons eris kt onon-protectiv einput swil l dependo nth edistributio no fris kfactor sove rth egrowt hcycl e ofth ecro prelativ et oth etim einput shav et ob eapplie da swel l asthei rrelativ eimportanc ei nterm so flikelihoo do foccurrenc e andth edamag ethe yma ycaus et ocro pgrowth .T oth eexten ttha t adversecondition sdevelo pbefor ea particula rinpu ti sapplied , farmersma yadjus tth eapplicatio nleve lo nth ebasi so fsuc h conditionsan dth eris ko finpu tus ewil lb ereduced .However ,i n caseinput shav et ob eapplie d beforecertai nris kperiod shav e passed,ris kma yaffec tdecisions .

Farmers'contro love rris kfactor s Giventh epossibilit ytha tth eris kassociate dwit hinpu tus ema y beactivel yinfluence d byfarmer simplie stha tsuc hinpu trisk s mayno tb eneutra lwit hrespec tt oth eresourc eendowment so fth e farmer.I nthi srespec ti ti susefu lt odistinguis hbetwee n environmentalinfluence stha tar epotentiall y fullyunde rth e 28 controlo fth edecisio nmake r(e.g .wee dinfestation) ,partl y controlled (e.g.pes tincidence) ,o rno tcontrolle d (e.g.drough t stressi nth eabsenc eo fsupplementa lirrigation) .T oth eexten t thateffectiv eris kcontro ldepend so nth eresource savailabl et o thedecisio nmaker ,inpu trespons eris kan dfarmers 'perceptio na f suchris kma yb einfluence db yperceive dcas ho rlabou r constraints.

3.2.2 Marketrelate drisk s Marketrelate drisk sar ecause db yuncertaintie si nproduc tan d inputmarkets .A majo rcaus efo rmarke tris kar evaryin gprice s forproduct san dcro pinputs .Apar tfro mpric erisk ,a numbe ro f otherris kfactor sresul tfro mmarke tdependence .Amon gothers , theyma yb ecause db ypoo rtranspor tfacilitie san droa d infrastructure;poo rmarketin gchannel s(e.g .timel ylac ko f buyers,postpone d payments);an da poo rinpu tsuppl ysyste m(non ­ availabilityo finputs) .

Theimportanc eo fpric eris ki nagricultura ldecisio nmakin go f individualfarm-household sgenerall ydepend supo nth eexten tt o which: .th efarm-househol di sintegrate dint oa marke to fmonetar y exchangerelations ; .product sca nb estored ; .price so fproduct san dinput sfluctuate ; .pric emovement sar epredictable ; .pric efluctuation sar ecorrelate dwit hfluctuation si n production.

Obviously,i nassessin gth eimportanc eo fpric erisk saccoun t shouldb etake no fth eexten tt owhic hhousehold smarke tthei r products,bu ycro pinput so nth emarket ,an ddepen do nth emarke t forconsumptio ngoods .Generall y speaking,th emor eth ehousehol d isincorporate d incommercia lmarkets ,th emor ei ti svulnerabl e topric efluctuations .

Toasses spric eris ko fproductio nactivities ,a distinctio n shouldb emad ebetwee nvariou stype so fpric emovements : .lon gter mpric etrend scause db ychange si nsuc hfactor sa s population,income ,taste ,an dproductio ntechniques ; .seasona lpric efluctuation sresultin gfro mth eseasona l charactero fagricultura lproductio no rconsume rpreference s forcertai nproduct sdurin gcertai npart so fth eyear .Pric e fluctuationso fstorabl ecrop s(e.g .grains )wil lgenerall y beles stha nnon-storabl eperishabl eproduct ssuc ha s vegetables; .lon gter mpric ecycl io fperennia lcrop san dlivestoc k productscause db ysuppl yreaction so ffarmers ; .irregula rpric emovement scause db ysuc hfactor sa sdroughtf , stormdamage ,o rheav ypes tinfestations . 29 Perceivedpric erisk swil ldepen dupo nth eexten tt owhic hfarmer s areawar eo fpattern si nth eabov epric emovement so nth ebasi so f whichinpu tan dproductio npric eprediction sca nb emade .I fso , decisionsca nb egeare dt oreduc eth eeffec to fpric efluctuation s onproductio nincome sa smuc ha spossible .Onl yfluctuation s aroundknow npric emovement sfor ma nelemen to frisk .Th eeffec t ofknow npric emovement sca nb ereduce db yhedging ,diversifie d and staggered plantingo fcrops .

3.2.3 Netretur nris k Thecombine d effecto fyiel dris kan dpric eris kfinall ydetermin e themonetar yretur nris ko fcro pactivities .I nagriculture ,du e toth eusua llo wpric eelasticitie so fdeman d foragricultura l products,cro pprice san daggregate doutpu tlevel sar eofte nfoun d tob enegativel ycorrelated .Thi snegativ eprice-outpu t correlationtend st ohav ea stabilizin geffec to nth emonetar y returnso fcro pproductio nactivities .Thus ,t oth eexten ttha t cropsar emarketed ,monetar yretur nris ko fcro pactivitie swil l generallyb elowe rcompare d toyiel dris kvalue dagains tconstan t prices.Hence ,i ti softe nargue dtha tstabilizin gagricultura l outputprice sthroug hgovernmen tmarke tinterventio nincrease s variabilityi nmonetar y returnsan dconsequentl y increasesinstea d ofreduce shousehol dincom erisk .However ,fo rhousehold s operatingnea ra subsistenc eleve lo fliving ,thi sma yno t necessarilyb etrue .I nyear so flo wproductio nsuc hhousehold s faceth emarke ta sconsumer san dhav et opa yhig hprice sfo r purchased food,wherea si ngoo dproductio nyear sthe yfac eth e marketa sseller so fproduct san dge tlo wprices .I neffect ,poo r householdscanno ttak eadvantag eo fth ehig hproduc tprice si n poorproductio nyears ,an dthu sth estabilizin geffec to fa negativeprice-outpu tcorrelatio no nthei rincome swil lb eminor . Moreover,althoug hsuc hcorrelatio nma yoccu ra tth eregiona lo r nationalmarke tlevel ,i ti smuc hles slikel ytha ti tals owork s forth eindividua lfar mo rvillag elevel .

Asecon dris kaspec to fmonetar yreturn st ocro pproductio n activitiesi sne tretur nrisk .Thi styp eo fris kconsider sth e variability inreturn st ocro pactivitie swhe nal lproductio n costsar esubtracted .Subtractin gcost sfro mth egros sretur n levelwil lhav eth eeffec to fshiftin gth eactivit youtcom e distributiont oth eleft ,thu slowerin gth emea nvalu eo fth e distributionan dincreasin g theprobabilit yo floss .Th e calculationo fne tretur nris kwil ltherefor edepen do nho wth e variousinpu tfactor sar ecosted .Fo rexample ,ne tretur nris k willvar ysubstantiall yi flabou rcost sar ebase do na nimpute d wagerat eo ri fthe yar econsidere d tohav en oopportunit yvalue .

Forth esam ereason ,on ecanno tsimpl ystat etha tprotectiv e inputsreduc ecro pproductio nrisks .Althoug hthe yar emean tt o reduceyiel drisk ,thi sdoe sno tnecessaril yimpl ytha tthe yals o reduceth ene tretur nris ko fa nactivity ,sinc esuc hinput s usuallyrequir ecas ho rlabou routlays .Thi swil lgenerall ydepen d 30 onth esiz eo fth eoutla yi nrelatio nt oth eeffectivit yo fth e inputt oreduc eth eprobabilit yo flo wreturns .Th elatte rwil l depend onth eimportanc eo fth especifi cris kfacto rt ob e controlled.Hence ,th eide atha tris kavers efarmer sshoul d overinvesti nprotectiv einput s(Binswanger ,1979 )doe sno t necessarilyhold .Du et oth eshif to fth eyiel ddistributio nbot h theexpecte dretur nma yb elowe ran dth eprobabilit yo fne tlos s mayb ehigher .However ,a trelativel y lowlevel so fprotectiv e inputus esuc ha situatio ni sno tlikel yt ooccur ,especiall yn© t whencorrectiv einput sar eapplie d inreactio nt oactua ladvers e environmentalconditions .I nsuc hsituations ,non-contro lwil l ce'ftaNinlyresul ti na ne tretur nloss .

Aggregationo fproductio nrisk s le'abovediscusse dris kfactor sconcer nindividua lcro p enterprises.However ,farmin g systemsar etypicall ycompose do fa numbero fdifferen tcro pproductio nenterprises ,ofte ngrow no n differenttype so flan dan da tdifferen ttime so fth eyear .Apar t fromcro pactivities ,livestoc kan^„o£frfjlim^mj)loj^m£n tactivitie s axe^aflinialso^incluZeaT"Th"e~Thfluenc eo fris kfactor sorT'these™" " activitiesma ydiffe ran dfarmer sar elikel yt omak eus eo fthes e differencest oreduc eoveral lrisk .Hence ,th equestio nshoul db e addresseda twha tleve lo factivit yaggregatio nris kshoul db e assessed.

Forexample ,a tth ecroppin gpatter nleve laccoun tcoul db etake n ofth ecombine dris ko fcrop sgrow nsequentiall yo nth esam epiec e oflan da sth eplantin gdat eo fth efirs tcro pma yinfluenc eth e plantingdat eo fth esecon dcrop .Give na monomoda lrainfal l pattern,postponemen to fth efirs tcro pplantin gma yreduc eth e yieldris ko fthi scro pbu tincreas eth eyiel dris ko fth esecon d crop.A tth ecro pproductio nsyste mlevel ,cro penterprise sma y reactdifferentl y toenvironmenta lcircumstances .Drough t resistantcrop sma yd oreasonabl ywel ldurin gpoo rrainfal lyears , butma yno tyiel da shig ha sothe rcrop si nfavourabl eyears , whereasth eopposit eapplie st onon-drough tresistan tcrops .Also , covariancei npric eris kfo rdifferen tcrop sshoul db econsidered . Thus,b ychoosin ga diversifie d cropportfoli oand/o rstaggere d plantingso fcrops ,farmer sma yno tonl ysubstantiall y reduceth e risko fth etota lcroppin gsystem' sphysica loutput ,bu tals oth e monetaryreturns .Further ,th etempora linterdependencie sbetwee n individualcro pactivitie sbot hwit hrespec tt ooutpu tan d (unforeseen)conflictin g resourcerequirement sma yb econsidered .

Atth efarmin g systemlevel ,difference si nth etimin go fth e incomestream so fcro pan dlivestoc kactivitie sar eofte nemploye d byfarmer st ostabiliz eincom eflows .Jewell-know nsafet yjneasur e isth ekeepin gof_animal sa sa .reserve_fo rtimej'ojFjjgo rcro p Jjfoductiaiw—Finally.a tth efarm-househol d level,th erisk s associatedwit hown-far mproductio nincom eshoul db ecombine dwit h theris kassociate dwit hincom ederive d fromoff-far memploymen t activitiessuc ha sactivitie si nth espher eo fhom eindustrie san d ^ 31 wagelabour .Althoug hincom ederive d fromsuc hactivitie sma y effectively balancea shortfal li nincom ederive d fromfar m production,i npoo rproductio nyear sincom eearnin gopportunitie s areofte nscarce .Fo rexample ,wag elabou ropportunitie si n agriculturewil lb elimite da texactl ythos etime stha tsmal lfarm - householdsnee dthem ,i.e. ,i npoo rproductio nyears .

3.2.5 Financialris k Apartfro mth erisk sattache dt oproductio nactivities ,anothe r typeo fris ki sassociate dwit hfinancin gthes eproductio n activities.I nthi scontext ,i ti susefu lt odistinguis hbetwee n businessris kan dfinancia lrisk .Busines sris ki sdefine da sth e inherentuncertaint yo fth efirm' soutpu tindependen to fth ewa y iti sfinance d (Westonan dBrigham ,1978) .Th emajo rsource so f businessris kar eth eearlie rmentione d variationi nphysica l outputan dmarke trelate drisks .Financia lris ki sdefine da sth e addedvariabilit y tohousehol d incometha tresult sfro m obligationsi ncas ho ri nkin dassociate dwit hdeb tfinancing .I n contrastwit hbusines srisk ,whic hi sincurre ddurin gon e productioncycle ,financia lris kconsider sth ecarry-ove reffec t ofbusines sris kbetwee nproductio nperiods .Financia lris k dependso nth efarm-household' sabilit yt odiffus eth e consequenceso fris ktakin gi nindividua lproductio nyear sove ra n extended periodo ftime .Eve nfo ryear swit hnorma lproductio n circumstances,financiall yover-extende d householdsma yfac ea severesubsistenc erisk .

3.2.6 Socialris ktakin g k Theoutcome so factivitie softe nals odepen do nwha tothe rpeopl e aredoing .Th eexten to fsuc hinteractio nwil ldepen do nth efor m andqualit yo f£he_socia lrelationship si na communit y(Berry , 1980).Socia lris ktaking~wil lb epaxLlculaily—importan ti n situationswher eindividual sattemp tt odeviat efro mestablishe d behaviour patterns.Thi smatte rha sbee nwidel ydiscusse d inth e literatureo ninnovatio nbehaviour .Fo rexample ,wit hth etheor y ofth e 'Imageo fth eLimite dGood' ,statin gth efolks 'belie ftha t thepersona limprovemen ti nlivin gcondition sca nonl ycom ea tth e expenseo fothers ,Foste r (1965)indicate dth eexistenc eo fsuc h socialris kfacto rfo rinnovatin ghouseholds .Als oi nth espher e ofpatron-clien tan dothe rreciproca lrelation ssocial ^risk_takin g occursi ncas eon eo fth etw opartie sact si nconflic twit hth e qtherparty . r ~~~~ — "

3.2.7 Backgroundrisk s Finally,a grou po frisk sshoul db econsidere d thatextend sbeyon d thespher eo fhousehol dproductio nan dconsumption .Thes e 'backgroundrisks '(Lipton ,1979 )are ,t oa larg eextent , unpredictablean dma yhav ea majo rimpac to nth eviabilit yo fth e householdunit .The yma yrang efro msicknes so fhousehol dmembers , withdrawinglabou rfro mincom eearnin gactivitie san drequirin g extraoutlay sfo rmedicin eo rhospita lbills ;deat ho fparent s V 32 orchildre nrequirin glarg ecas han dfoo doutlay sfo rfunerals ; unexpectedwedding so fchildren ;t oth eburnin gdow no fth e homesteado rtheft .Thes erisk sar eessentiall y thoseagains t whichhousehold si nwester ncountrie sar ecommonl yinsured .Th e involvedindemnitie sar eto olarg et ob ecarrie d byth ehousehol d budget.I nnon-wester neconomies ,t ocove rsuc hrisk shousehold s areusuall ydependen to nvillag eleve lsocia linsuranc e institutionssuc ha smutual-help ,gif tgivin gdurin gfuneral san d weddings,etc .T oth eexten ttha tthe yar einadequate ,individua l householdsma ykee prelativel y largereserve si nstore dproduce , livestocko rsaving st omee tsuc hcalamities ,thu sblockin g potentialfund sfo rinvestemen ti nincom eearnin gopportunitie s andlivelihoo d improvemento fth ehousehold .Th einabilit yt o coverbackgroun d risksma yb ea nimportan tfacto rexplainin gth e impoverishmento fhouseholds .

3.3 Modelling farmers'ris kbehaviou r Obviously,analyzin gho wfarmer stak eint oaccoun tth eabov e describedcomplexit yo fris kfactor si sdifficult .Fro mth e discussionbelow ,i twil lbecom eclea rtha trisk ,an dconsequentl y riskaversion ,ar eno twell-define d conceptstha tca nb ereadil y employedi nanalytica lmodels .I nfact ,despit eth eincreasin g researchattentio nt oris ki nagricultura ldecisio nmakin gdurin g thelas ttw odecade sther ei sn oconcensu swhatsoeve rho wris kca n bestb eincorporate d indecisio nmodel st ob erelevan tt ofarmers ' choiceproblems .I ti stherefor eno tsurprisin gtha tattempt st o incorporateris ki ndecisio nmodel shav ebee nconfine dt orathe r academicexercises .

Theeconomi cliteratur eo nagricultura ldecisio nmakin gi s stronglydominate db ynormativ edecisio ntheories .Suc htheories , prescribeho windividual sough tt obehav ewhe nthe yrationall y followpre-define dbehaviou rrules .The yusuall ystar tfro mth e assumptiontha tdecisio nmaker smaximiz eon eo ranothe rutilit y value(e.g .profits ,return st ofamil yfactors) .T oallo w maximization,decisio nmaker sar eportraye da scoo lcalculating , rationalperson swit hsophisticate d computationalability .Suc h personsar eface dwit ha finit enumbe ro fpossibl eaction so r strategiesth eoutcome so fwhic hdepen do na finit enumbe ro f environmentalinfluence s('State so fNature') .I nth econventiona l economicmodel ,th edecisio nmake ri sassume dt ohav eperfec t knowledgeregardin gth estatu so fth evariou senvironmenta l factors,i.e. ,h eknow swha t 'State''i strue ,eac hactivit yha sa determinateoutcome ,an dmaximizatio nsimpl yinvolve sselectin g theactivit ywit hth ehighes tutilit yvalue .

Forth ewhole-far m planningproblem ,know ni ndecisio ntheor ya s portfolioselection ,agricultura leconomist shav elon gsinc e developedan drefine da numbe ro fmathematica l (linear) programmingmodel stha tar ecommonl yuse dt odetermin eth eoptimu m allocationo ffar mresources .Th estandar d linearprogrammin g modelassume sperfec tknowledge :price spai dan dreceive db y 33 farmers,resourc erequirement san dconstraints ,an dyield so f cropsan dlivestoc kactivitie sar eal lassume d tob eknow nwit h certainty.Give nvalue sfo rthes emode lparameters ,th elinea r programmingmode lunde rcertaint yyield sa uniqu esolutio nt oth e resourceallocatio nproblem .I tmaximize sincom esubjec tt o resourceconstraint san dpossibl yothe rconsideration ssuc ha s rotationrequirement san dtimelines so foutpu t (cash/kind flow).

Forsituation swher eth eoutcome so factivitie sar euncertain , i.e.,wher eth edecisio nmake rdoe sno tkno wwha t 'Stateo f Nature'i stru edu et oth einfluenc eo fsom eo fth eearlie r indicatedris kfactor s(mos tdecisio nsituations) ,certai nsingl e outcomeso factivitie sar ereplace d byuncertai narray so f possibleoutcomes .Decisio ntheorie stha tfocu so nchoic eunde r conditionso funcertaint yhav et odea lwit hth edecisio nmaker' s ability: .t oforecas tuncertai nevents .Individual smus thav esom eide a ofth elikelihoo do foccurrenc eo fth evariou s 'Stateso f Nature'relevan tt othei rchoice so ra tleas tmus tb eabl et o rankthe maccordin gt osom erelativ e (heuristic)frequenc yo f occurrence; .t opredic tth evariou sconsequence so feac hcours eo factio n assumingtha t 'Nature'i si neac ho fit spossibl estates ; .t oorde ralternativ eaction saccordin gt osom epreferenc e measure,takin gint oaccoun tarray so foutcome s (consequences).

3.3.1Th efarmers 'abilit yt oforecas tuncertai nevent s Moststudie scite di nth eliteratur etha tattemp tt oasses sth e farmers'abilit yt oforecas tuncertai nevent sar estil llargel y exploratoryan dlimite d toperception so fyiel dvariabilit yo f singlecro pactivities .Th eproble mi nassessin g farmers'feeling s ofoutcom euncertaint ydirectl yrelate st oth e- inherentl y difficultt oanalyz e- issu eho windividual sproces sinformatio n andho wthe yperceiv echoic eproblems .Studie sb yOrti z(1980 )an d Gladwin(1979 ,1980 )ar esom eo fth efe wseriou sattempt s investigating themanne ri nwhic hfarmer sthemselve sconceptualiz e choiceproblem san dperceiv euncertaintie si nth edecisio nmakin g environment. J

Themainstrea mo feconomi cliterature ,however ,simpl ysidestep s thisproble mb yassumin gtha tindividual schoos ebetwee n activitiesa si fthe yar eabl et o(subconsciously )compar erisk y optionsi nterm so fsubjectiv eprobabilities .Th econcep to f subjectiveprobabilit ystem sfro mth eearl ywor ko fSavag e(1954 ) whoshowe dthat ,unde runcertainty ,th ebes twa yt oachiev eth e maximumi st ous ewhateve ryo ud okno wt omak eyou rbes tgues s aboutprobabilities .Tha tis ,h eindicate dtha teve nth esmalles t bito finformatio no nth elikelihoo do foutcome si sbette rtha nn o informationa tal li nreachin gth egoa lo fmaximization .I nthi s way,Savag eeffectivel yexpelle dth enoncalculabl epar to f 34 uncertainty (e.g.du et oknowledg econstraint so raction sb yothie r decisionmakers )an dpave dth ewa yfo rdecisio nanalyst san dmode l builderst omathematicall y includeoutcom euncertaint y indecisio n modelsan dcas tawa yth edistinctio nbetwee nris kan duncertaint y asbein girrelevant .

Richardsone tal _(1976 )eloquentl ysummariz ethi sview : Inthi scontex tris ki stake nt omea nuncertai nevent s towhic hprobabilitie sar eattache dan di ti sargue d thatal lprobabilitie sar esubjective ,reflectin gth e degreeo fbelie fth edecision-make rhold si nth e occurrenceo frelevan tuncertai nevent s(d eFinetti , 1972).Objectiv edat abearin go nth euncertainty ,suc h asrelativ efrequencie so fpas tevents ,ar esee nmerel y asaid si nformulatin g probability judgements.I nthi s view,th eclassica ldistinctio nbetwee nrisk ,wher e probabilitiesar e 'known'an duncertainty ,whe nthe y arenot ,i sinvali dan dal lcase so funcertaint yfo r whichpossibl eevent sca nb eenumerate dar ecategorize d as(subjective )risk . Inlin ewit hthi s- amon geconomi cdecisio ntheorist s- widel y acceptedview ,uncertaint yi smerel yreferre dt oa sa stat eo f mindi nwhic hth eindividua lperceive sa numbe ro fpossibl e outcomest oa particula raction ,wherea sris kha st od owit hth e degreeo funcertaint yi na give nsituation .Tha tis ,uncertaint y regardingth eoutcome so fchoic eoption sca nalway sb eexpresse d interm so fsubjectiv elikelihoo dindicators .

Ason eo fth efe wopponent st othi sview ,Cancia n (1972)states : Knight'sclassi cdistinctio nbetwee nris kan d uncertainty seemst ob eoverwhelme d byth edeman do f themicro-economi cmode lt ocharacteriz edecisio n makingint ocalculabl eterms :economist ssee mt o translateuncertaint yint oterm stha tmak ei t comparablewit hris k ...I nman yrecen tdiscussion so f agriculturaldevelopment ,'ris kan duncertainty 'appea r asa singl eterm ,no ta sa conjunctio no fconcept s denotingdifferentia lphenomena . Weagre ewit hCancian' sobjectio nt oa nidentica ltreatmen to f(a ) situationswher efarmer skno wwha tkin do frisk sthe ytak ewhe n optingfo rexistin gpractice san d (b)situation swher ethe yar e facedwit hth euncertaintie so fne wtechnologie so rwhe nthe yhav e toadjus tt oothe rchange si nth eenvironment .Wit hth eadoptio n ofne wtechnology ,n oinformatio ni savailabl eabou tth ewa yil l whichth etechnolog ywil lperfor munde rloca lconditions ,i.e. , therei sn oexperienc eo nwhic ht obas ea nassessmen to fth e responseo fth etechnolog yt oloca linput san dproductio n circumstances.Thus ,farmer sma yb ehighl yuncertai nabou tth e risksinvolve di nne wproductio nopportunities .The yma yneithe r knowth eodd sagains twhic hthe yar egamblin gno rth eoutcomes . 35 Insuc hsituation sdecision sar emad eunde rcondition so f ignorance.B ynature ,ignoranc ecanno tb eincorporate d informa l decisionmodels .Give nth eemphasi so nforma lmaximizin gmodel si n theliterature ,i ti sno tsurprisin gtha tthi sdimensio no f decisionmakin gunde runcertaint yha sreceive dmino rattention . However,decisio nsituation so fthi styp ear elikel yt ooccu ra t theearl ystag eo fadoptio nprocesses .The yar ereferre d tob y Canciana sdecisio nsituation swher epur euncertaint yan dno tris k considerationsprevail .Ignoranc ema yexplai nconservativ e behaviouri ncas ene wprospect sar esimpl yno ttake nint oaccoun t asviabl eoptions .Uncertaint y ofthi styp eca nb ereduce db y gathering informationo nth ene wprospec to rb yow n experimentation.A sindicate d byPeti t(1976 )t otak eint oaccoun t learningaspects ,decisio nmodel smus tfocu so nth eadaptiv e natureo fdecisio nmakin gan dincorporat emechanism sfo rfeedbac k thatallo wmodificatio no fchoice si nth eligh to fne w information.

Choicesituation sunde rpur euncertaint y shouldb edistinguishe d fromchoic esituation swher eth econsequence sar eknow nbu tno t theodds .Thi slatte rsituatio ni sreferre d toi nth eliteratur e asambiguit ywhic hmeasure sth edegre eo fconfidenc eon eha si na probability estimate (Ellsberg,1961 ;Bernard , 1974).Clearly ,i n pureprobabilit ycalculu ssuc hphenomeno ndoe sno toccur :a probabilityabou ta probabilit yi sagai na probability .Hence , mostdecisio ntheorist semployin gsubjectiv eprobabilit yconcept s arguestrongl yagains ttakin gu pthi sadditiona ldimensio no f uncertainty indecisio nmodel s (e.g.Raiffa ,1961) .

Studiestha tattemp tt oanalyz eho windividual sarriv ea t probability judgementsar emainl ylimite d topsychologica l laboratoryresearch .Ther eha sbee na growin gappreciatio no fth e limitationo findividual si nprocessin g probabilisticinformatio n and judginguncertainty .Slovic ,Kunreuthe ran dWhit e(1974 ) summarizelaborator yan dfiel dresearc hillustratin gth einabilit y ofdecisio nmaker st othin ki nprobabilisti cterm san dt obrin g relevantinformatio nt obea ro nthei rjudgements .Thi sfindin g would seemt oinvalidat eman yo fth epropose d decisiontheorie s andris kdefinition stha tar ecommonl ybase do nth eassumptio n thatindividual sten dt obehav ea si fthe ythin ki nprobabilisti c terms.

Tverskyan dKahnema n(1974 )describ etw oheuristic scommonl y employed byperson si nmakin gjudgement so nth eoccurrenc eo f eventstha tappea rt ob erelevan tt oth epresen tstudy .Th efirs t heuristic,availabilit yo finstance so rscenarios ,i semploye d whenpeopl ear easke dt oasses sth efrequenc yo fa clas so rth e plausibilityo fa particula rdevelopment .Fo rexample ,a person , whenassignin ga subjectiv eprobability ,ma ypu tto omuc hweigh t onrecen tinformatio nan dresults ,a sthe yar emor eeasil y availablet ohim .Thi sma ylea dt oa bia si frecen texperience so r informationar eno trepresentative .I fexperienc ewit ha certai n techniqueo reven ti slackin g (e.g.newl yintroduce d technology), 36 personsma yus eexistin ginstance st oevaluat eoutcomes .

Thesecon dheuristic ,adjustmen tfro ma nanchor ,i susuall y employedi nnumerica lprediction swhe na relevan tvalu ei s available (e.g.th emos tlikel yyiel destimate) .Fo rexample ,whe n elicitinga probabilit ydistributio no fyields ,i fth emoda lvalu e strikesfirs ti nth emin do fth efarmer ,h ema yno ttrul yexpres s thevalue sa tth etail so fth edistribution .T osom eexten ton e cantr yt oovercom ethi sproble mb yencouragin gth efarme rals ot o thinko fth etai lvalue so fth edistribution .

Anothertyp eo fheuristi cspecificall y pertainst oth emanne ri n whichperson sma yasses sth erelativ eriskines so falternativ e prospects.Instea do fseparatel ytakin gint oaccoun tth ereturn p andriskines so fopportunities ,person sma yver ywel ldirectl y discountfo rris kthroug ha mor econservativ eassessmen to f returnso fhig hris kprospect scompare dt oles srisk ypropects . Sucha simpl eheuristi cdoe sno tonl yhav ea nintuitiv eappeal , butma yals ob ehypothesize d onth ebasi so fwha ti sknow ni n behaviouraltheor ya s 'cognitivedissonance' .I ncas ea perso nha s thechoic ebetwee na hig hris k- hig hretur nan da lo wris k- lo w returnprospect ,h ema yreduc ecognitiv edissonanc eb yadjustin g thereturn so fth ehig hris kventur edownward si norde rt oavoi d feelingso fregre ttha twoul db eassociate dwit hno tchoosin ga n opportunitywit ha potentia lhig hpay-off .Suc hbia sma yi npas t bedependen to nth eris kattitud eo fpersons ,i.e. ,th emor eris k aversea perso ni sth emor econservativ ehi sperceptio nwil lbe . Theresourc epositio no findividual sma yhav ea simila reffec to n perceptions.Base do nth eearlie rdevelope dnotio ntha teffectiv e andtimel yris kcontro li sinfluence db yth eresourc epositio no f thefarmer ,poo rfarmer sma ysho wa tendenc yt ohav emor e conservationperception stha nresourc eric hfarmers .

Apartfro mth eabov ecognitiv ebiases ,othe rdiscrepancie sbetwee n responsest oelicitatio nprocedure san dwha tperson sactuall y perceivema yoccu rdu et omotivationa lbia s(i.e. ,careles s responseso fth esubjec ti nth ecours eo f- th eofte n- tediou s questioningprocedure )an dintervie wbia swhic hma yaris efro m elicitationmethod stha tinvolv econcept swit hwhic hsubject sar e notfamilia ro rhav emeaning swhic hdiffe rfro mthos ehel db yth e researcher.

Still,i nstudyin gfarmers 'perceptions ,on eshoul db ecareful,t o simplyagre ewit hEste s(1976 )tha tindividual sar eunlikel yt © haveenoug hinformatio nan dinformatio nprocessin gabilit yt o thinkabou tth efutur ei nprobabilisti cterms .Fo rexample , i heuristicprobabilit yconcept ssuc ha smos tunlikely ,probable ^ verylikely ,almos tcertai nma ywel lreplac emathematica l probabilitiesi ndeciso nmakin gan dessentiall ylea dt osimila r decisions.Other s(e.g .Binswanger ,1979 )hav eindicate dtha t farmersar equit ecapabl eo fexpressin g feelingsabou tth e likelihoodo foccurrenc eo fcertai nevent si nterm so f 'soman y outo f(say )ten' ,whic hi sa wel ldefine dprobabilit yconcept . 37 Suchprobabilit yconcept sma yb eapplie d tocertai ndiscret e eventssuc ha searl yonse to frainfall ,typhoo nincidence ,heav y pestinfestation .I tis ,however ,muc hles slikel ytha tfarmer s areabl et oassig nprobabilit yconcept st ocontinuou svariable s sucha syield so rprices .

Untilrecently ,limite dattentio nwa spai dt oth eanalysi so fth e influenceo ffarmers 'perception so ndecisio nmaking .Mos teffort s havebee nmad ei nth eare ao fmeasuremen to fris kpreferences . Onlydurin gth elas tfiv eyears ,a numbe ro fstudie stha thav e attempted toelici tfarmers 'yiel dris kperception swer ereported . Someo fth emos tnoteworth ywer eb yBessle r (1980),Grisle yan d Kellog (1983),Herat he ta l (1982),an dWalke r (1981).Thes e studiessuppor tth evie wtha tperception sar ea simportan ta s attitudesi nexplainin g farmers'behaviour .

Apartfro mth equestio nho wfarmer sperceiv eoutcom euncertainty , amuc hbroade rissu econcern sth equestio na twha tleve lo f activityaggregatio nfarmer sperceiv erisk .D ofarmer sconside r therisk sattache dt oparticula raction ssuc ha sfertilize r application;d othe yevaluat eris ka tth ecro pactivit ylevel ;o r arethe yconcerne dwit hoveral lfar mincom eo rhousehol dincom e risk.I tis ,fo rinstance ,quit epossibl etha tonc ever ybasi c subsistencerequirement sar eassure da tth eaggregat ehousehol d level,farmer sengag ei nremunerativ eactivitie sth eoutcome so f whichar ehighl yuncertain .I ti sals olikel ytha tperceive dris k isinfluence d byth escal ea twhic hth eactivit y isundertaken .

3.3.2 Definingris kan dmeasurin g farmers'ris kpreference s Giventh elac ko fknowledg eregardin g farmers'outcom e perceptions,i twil lb eclea rtha tknowledg eabou tth ewa yi n whichfarmer scompar echoic eoption swit hvariabl eoutcome s (prospects)i sequall y limited.Althoug hther ear ea considerabl e numbero fhypothese sregardin grisk-base d decisioncriteria ,non e ofthes ehypothese shav ebee nadequatel y testeda sprovidin ga gooddescriptio no ffarmers 'ris kperceptio nan dris ktakin g behaviour.Emphasi sha sbee npu to nmodel stha tconside rdecisio n makingi na whole-far mcontex tleadin gt oa substantia lnumbe ro f differentris kprogrammin gmodels .Les sattentio nha sbee nfocuse d ondecisio nmodel srelate dt oinpu tuse .Ver yfe wattempt shav e beenmad et oinclud eris ki nmodel stha tlin kproductio nwit h consumptiondecision sa tth ehousehol dlevel .

Riskconsideration sca nb eincorporate d intomathematica l programmingmodel si ntw oways .Eithe ri nth efor mo fa dho c manipulationso fth eprogrammin gmatri xo rb yexplicitl yalterin g theprogrammin galgorith mb ywa yo ftakin gint oaccoun tth e farmers'ris kconsideration si nth eobjectiv eo rconstrain t function.Example so fa dho cmanipulation so fth eprogrammin g matrixar eth eexclusio no fhig hris kactivitie sfro mth ese to f activitiesi nth ematri xo rlimitin gth esiz eo fthes eactivitie s byusin ga maximu mconstraint .Alternatively ,lo wris kactivitie s 38 mayb eforce d intoth esolutio nb yusin ga minimu mconstraint .Oh e mayals ous econservativ eestimate so fresourc elevel so ro fgros s marginsan dresourc erequirement sfo rhig hris kactivities .I na moresystemati cway ,suc hprocedure sma yb ecarrie dou tthroug h sensitivityanalysis .

Onth ebasi so fth edecisio ncriteri aan dris kdefinition s employed,thre eapproache stha texplicitl ytak eint oaccoun tris k considerationsi nth emode lstructur eca nb edistinguishe d: I. 'SafetyFirst 'approache sa spropose d byRo y (1952)an dDay , Aigneran dSmit h(1971 )whic hpa yexplici tattentio nt o minimum incomegoals ; II.Expecte d income& dispersio no fincom eanalysis ,firs t employed byMarkowit z (1952,1959) ,Tobi n (1958),an dFreun d (1956),base do n(subjective )expecte d utilitytheor y allowinga utilit ytrade-of fbetwee nris kan dexpecte d income; III.Approache sderive d fromgam etheor yorginatin gwit hVo n Neumannan dMorgenster n (1953).

Theseapproache sdiffe rmainl yi ntw orespects .First ,th emanne r inwhic hris kconsideration so fdecisio nmaker sar etake nint o accounti nth emode lstructure :i na compensator ywa ya sa trade ­ offbetwee nincom ean dris kwhic hallow soptimizatio n (II)o ra sa boundaryconditio nt oth efeasibl echoic ese t( Ian dIII) .Second , themanne ri nwhic hris kfactor sar erepresente d inth emodel : i employingsubjectiv eprobabilitie s (Ian dII )o rno t (III). ''

Riskprogrammin gmodel sfurthe rdiffe ro nth ebasi so fwhethe r riski srecognize donl yi nth eactivit yretur ncoefficient san d thosewher ei ti sals orecognize d inth eresourc econstraint s and/ortechnica linpu tcoefficients .Th elatte rtyp eprogrammin g • modelsar efa rmor ecomple xtha nth eformer .Hence ,ris k programming studiesar eusuall yconfine dt ocase swher eonl y activitygros smargin sar estochastic .Below ,th evariou s approachest oinclud eris kattitude san dchoic ecriteri ai nforma l decisionmodel sar ebriefl ydescribed .A mor edetaile d discussion isprovide d inAppendi xI .

Safety-First Thesimples twa yt ocompar eoption swit hmor etha non epossibl e ; outcomei st ocomput eth eexpecte dvalue ,i.e. ,th eprobabilit y weighed sumo fth earra yo foutcomes .I nthi sway ,th eprofi t maximizationcriterio nunde rcertaint y isreplace db ya nexpecte d profitmaximizatio ncriterio nunde rcondition so funcertainty . Thiscriterio nimplie sprofi tmaximizatio nove ra perio do f severalgrowin gseasons ,som eo fwhic hma yb eprosperous ,other s mayb edisastrous .B yactin ga si fh euse sth ecalculu so f expected values,a noptimizin gfarme rma yfin da long-ru n maximizing strategy.Obviously ,thi scriterio ndoe sno t distinguishbetwee noption swit hdifferen ttype so foutcom earray s 39 but similar expected values.Fo r example,option s with outcome arrays including negative outcome possibilities are considered identical to optionswit h outcome arrayswit h only positive values, if the expected value is the same for bothoptions .

Asearl y sources,bot hWharto n (1968)an d Lipton (1968)indicate d that specifically in regionswher e farmsar e small and production conditions highly uncertain, long-run expected profit maximization could imply severe production shortages in the short-run,exposin g the farm family to the danger of starvation.Thi swil l be particularly true if institutions for spreading risks are poorly developed (Griffin, 1979). In such circumstances,i t is argued that farmers are not preoccupied with maximizing expected profits but with maximizing their chances of survival (Lipton, 1968). Instead of focusing on long-run objectives,farmer s are concerned with short-run goals and constraints.Fo r example,resourc e poor farmersma y prefer prospectswhic h combine lower than maximum profitswit h a security that a certain level of profits will always (or with a certain chance)b eattaine d to prospects that maximize profits where such security is not guaranteed.

Under the general name of 'SafetyFirst ' various decision rules have been proposed that incorporate such security motive in decision models.Th e principal feature of thesemodel s is that risk acts as a constraint to the feasible choice set,i.e. , an increase in risk (e.g.a higher chance that income falls below subsistence requirements)canno t becompensate d by an increase in expected income.Thi s implies that if the risk constraint is binding,expecte d profit maximization will not occur. In contrast with theexpecte d utility maximization theory discussed below, decision criteria derived from these approaches do not allow for a complete ordering of choice alternatives allowing maximization, but merely provide rules-of-thumb that ensure a certain level of security. Hence,i n decision models these rulesar e generally incorporated into a framework of so-called lexicographic ordering of preferences.Fo r example,alternative s are first screened for meeting a certain safety margin,and ,a s a second step,a n expected profit maximizing alternative is selected.Th e rules-of- thumb suggested in the literature are,t o a large extent, arbitrary and most of theemploye d parameters (especially the employed probability bounds)ar e difficult to elicit from decision makers.O n theothe r hand,disaste r levelsan d safety margins can be directly related to the decision maker's ability to takerisks .

Utility maximization Although the early interest in the influence of risk on decision making was primarily directed to the resource-poor farmers' inability to take risk,wit h the increasing interest inmodellin g risky choice processes amor e general formulation of risk taking behaviour emerged in the literature focusing on thefarmers ' willingness to take risk.Suc h attitude towards risk is considered to be in part determined by the psychological make-up of the farmer and not induced by a limited risk taking capability. It is 40 ananalog yt oFriedman' s(1963 )theor yconcernin gwester ntyp e firmstha tattribute sdifference si nth eprofitabilit yan dsucces s betweenfirm spartiall yt odifference si nthei rwillingnes st o takerisks .Adventurou senterpreneur sar erewarde d forundertakin g activitiesfo rwhic hth epay-off sar ehig hbu tunsure .I ncontrac t withformulatin g riska sa constrain tt ofeasibl echoices ,wit h theintroductio no fattitudina lris kaversio n (i.e.,ris k preferenceso fa continuou snature )i ti spossibl et oinclud eris k considerationsi nth eobjectiv efunctio nt ob emaximized .

Approachesi nthi scategor yfin dthei rorigi ni nth eexpecte d utilitymaximizatio ntheory .Thi si sth emos tfull ydevelope d normativetheor yo fchoic ebehaviou runde runcertaint ybase do n theso-calle dVo nNeumann-Morgenster naxiom so frationa lchoic e (1).I tallow sfo ra judgemen tconcernin gbot hexpecte d incomeari d riskassociate dwit hincom et ob eformulate d ina singl eutilit y values otha ti tca nb econsistentl yan dcoherentl yapplie di na n' optimization framework.A comprehensiv erevie wo fth eexpecte d utilitytheor yi sprovide db yAnderso net ^a l(1977) .

Theassumptio ni stha tdecisio nmaker sar ewillin gt otrade-of f riskagains tincom efo ral llevel so fincome .Choic eoption sar e assignedexpecte d utilityvalue stha tcombin eth eutilitie so fth e variousoutcome so feac hoptio nan dthei rlikelihoo do f occurrence.Utilit y valuesar econsidere d toreflec tth e individual'sdiminishin gmargina lutilit yo fmoney .Fo rth eris k averseindividual ,th eexpecte d utilityo fa guarantee dsu mo f $100i spreferre d toa 50:5 0chanc eo f$20 0o rnothin gbecaus eth e satisfactiono rutilit yt ob egaine dfro ma nextr a$20 0i sles s thantwic et ob egaine dfro ma nextr a$100 .Thus ,i tca nb eshow n thatth enecessar yan dsufficien tconditio nfo rris kaversio ni s thatth efirs tderivativ eo fth eindividual' sutilit yfunctio nfo r income(o rwealth) ,i.e .hi smargina lutility ,i spositiv ean d strictlydecreasin g (Arrow,1971) .Simila rt oexpecte dprofi t maximization,thi stheor yassume sa long-ru noptimizatio n algorithm.A si sindicate di nAppendi xI ,thi smode lencounter s seriousproblem san dshortcoming si nactua lapplication .I ti s essentiallya theoretica lconstruc twithou tmuc hsuppor tfro m eitherpsychologica lstudie sinvestigatin gho windividual sproces g informationo reconomi cstudie stha tattemp tt oprov eth etheor y \ asprovidin ga decisio nmode laccordin gt owhic hpeopl eten dt o behave.

Themai ndifficultie si nusin gth emetho d ofmaximizin gexpecte d utilityrelat et oth eempirica lestimatio no futilit yfunction s (andsubjectiv eprobabilities) ,an dt oth ecomputatio no fexpecte d utilitiesfo rcontinuou sprobabilit ydistributions .Fo rsimpl e choiceproblem stha tinvolv efe woption swit hdiscret eoutcomes , assigningutilitie st oal lindividua loutcom epossibilitie sma y notpos ea particula rproblem .However ,fo rth emor ecommo ncas e ofa substantia lnumbe ro foption swit hcontinuou soutcom e distributions(e.g .yiel ddistributions )suc ha procedur ebecome s tedious.Fo rsuc hcases ,i ti scommo nt oasses sutilit yi nterm s 41 ofth eprobabilit ydistributio no fincom eitsel fan dassum etha t suchutilit yvalue sca nb eencode d ina ris kpreferenc efunction . Insuc ha napproach ,expecte dutilit yi sexpresse da sa weighe d sumo fa serie so fmoment so fa probabilit ydistribution . Although,i nprinciple ,i ti spossibl et oasses sprobabilit y distributionswit ha ninfinit eserie so fmoments ,i npractica l applicationsi tha sbee npopula rt otak eint oaccoun tonl yth e firsttw omoment so fth edistribution ,i.e. ,th emea nan dvarianc e oran yothe rvarianc erelate dmeasure .I nth eexpecte dutilit y theory,ris ki sthu susuall ydefine di nterm so fth evarianc eo r standarddeviatio no foutcom edistributions .

Measuringfarmers 'ris kpreference s Todetermin eth eris kpreference so ffarmers ,encode d inutilit y functionstha tca nb eapplie d toth eabov eutilit ymaximizatio n models,tw oapproache sca nb edistinguished : .approache sbase do ndirec telicitatio no fris kpreferences ; .approache stha tinfe rris kpreference sfro mobserve d behaviour.

Inth edirec telicitatio napproache sutilit ypreference sar e usuallyelicite dfo rsimple ,hypothetica lprospect st ob e subsequentlyuse dt oindicat econsisten tchoice sfo rrea lfar m planningproblems .Elicitatio nprocedure sma yeithe rinvolv eth e estimationo fa ris kpreferenc e (utility)functio no rth e determinationo fpartia lris kaversio ncoefficient sderive dfro m specificgambles .Preferenc efunction sar ederive d throughvariou s interviewprocedure sdesigne d todetermin epoint so findifferenc e betweencertai nincome san doption sinvolvin ghig han dlo w incomes.Th eusua lmetho d startsth eintervie wprocedur ewit ha choicebetwee noption so fwhic hth eexpecte d pay-offsar e identical,i.e. ,th eexpecte d incomefro mth erisk yoptio ni s equalt oth eassure dincom eoption .I ncas eth eresponden tprefer s theassure dincom eoptio n (aswil lb eth ecas efo ra ris kavers e individual),th eassure d incomei slowere d untilth eresponden ti s indifferentt oth etw ooptions .Th eresultin gcertai nincom eleve l isknow na sth ecertaint yequivalen to fth erisk yoption .Th e differencebetwee nth ecertaint yequivalen tan dth eexpecte dvalu e ofth erisk yoptio ni sth eris kpremium ,i.e .th eamoun tth e respondenti swillin gt opa yt oavoi dparticipatin g inth erisk y prospect.Afte ra serie so findifferenc epoint sha sbee n identified inth einterview ,a utilit yfunctio nca nb efitte dt o thepoint sb yregressio nanalysis .

Thedirec telicitatio nmethod sinvolvin ghypothetica lgamble shav e beencriticize d forquit esom etim e(Thornton ,1963) .Sinc ei t forcesdecisio nmaker st orespon d tohypothetica lquestion swhic h mayneithe rreflec tno rbea ra relatio nt oth erea lrisk y prospectsthe yperceiv et ofac ei nthei rinpu to ractivit y choices,i ti squestionabl ewhethe rattitude stoward sris ktakin g asimplie db yth eresult so fthes eelicitatio nmethod sar e consistentwith ,o rca notherwis eexplain ,th echoice sdecisio n 42 makersactuall ymak e(Roe ,1982) .Eve ni ncas ehypothetica l prospectsar erelate dan dtune dt oth epertinen tdecisio nmakin g situationi nwhic hfarmer soperate ,th etyp eo fprocedur eha s seriousshortcomings ,a sYoun g (1979)point sout : Doesa utilit yfunctio nelicite d ina shor tintervie w arounda farmers 'livin groo mtabl ereflec thi s attitudetowar dris ki nrea lworl ddecisions ?I nth e lattercase ,unlik eth eformer ,h eha smuc hmor etim e toconside ra decision ,ca nan dofte ndoe ssolici t advicefro mfamil ymember san dfriends ,an di sfull y awaretha th emus tliv ewit hth econsequence so fhi s decision. Also,th edirec telicitatio nmethod shav ebee ncriticize da s subjectt oa numbe ro fbiase sarisin gfro mmisconception so fth $ notiono fprobabilities ,preference sfo rspecifi cprobabilities ^ negativepreference stowar dgambling ,confoundin g fromextraneou s variables,an ddifference si ninterviewers .

Asecon ddirec telicitatio nmetho d suggestedb yBinswange r (1980) whichinvolve srea lpay-off san dpreferenc eassessmen tfo rset so f riskyoption sma yovercom esom eo fthes eproblems .Th erespondea t isaske dt omak ea singl eselectio namon ga specifie d seto f options,al linvolvin g50:5 0gamble swit hhig han dlo wincomes . Binswangeruse drea lpay-off s(respondent sar egive nth emone yt o gamblewith )an demploye da procedur ei nwhic hh egraduall y increased theamount sa tstake ,resultin gi na numbe ro fpartia l riskaversio ncoefficients .However ,a sindicate d byKnowle s (1980),changin gth ewealt hpositio no findividual s(b ygivin g themmone ywit hwhic ht opla yth egame )and ,mor eimportantly ,th e useo fgame si nwhic hparticipant saverag eou ta sgainer srathe r thanloser s(i nfac tthe yneve rlos ebecaus eth emone ythe ypla y withi sno tthei rown) ,wil lprobabl ylea dt odifferen tresponse s comparedt oindividual sgamblin gwit hthei row nmoney .Although , Binswangermad eeffort st oavoi dth eeffec to fthes eproblems ,th e actualchoice sar eobserve dunde rwha tEidma n(1983 )call s 'somewhatartificia lan dcontrive dcircumstances' .

Alternativest oth edirec telicitatio nprocedure sar eapproache s thatattemp tt oinfe rpreference sfro mactua ldecision smad eb y farmers.I nthes eapproaches ,observe deconomi cbehaviou rwit h respectt ofacto rdeman dan doutpu tsuppl yi scompare dwit h resultsderive d fromtheoretica lmodel stha tincorporat erisk . Riskpreference sar eimpute db ychoosin ga ris kaversio nparamete r thatlead st oth ecloses tfi tbetwee nth eactua lan dpredicte d choice.Th ederive dris kaversio ncoefficient sca nsubsequentl yb e incorporated intomodel stha tdetermin eoptimu mchoice sfo r problemsincludin gne wchoic ealternatives .Moscard ian ddeJanvr y (1977)use dthi smetho d ina nexpecte dutilit y frameworkwit h farmersi nth ePuebl oProjec ti nMexico .Brin kan dMcCar l(1978 ) derivedestimate so fris kaversio ncoefficient so fCor nBel t farmersemployin ga MOTAD-typ eprogrammin gmodel .Th eprocedur e followedi st ocompar eactua lcro pactivit yo rinpu tchoice so f 43 farmerswit hthos eselecte d byth emode lwit hth eris kaversio n coefficientvarie dparametrically .Th evalu eo fth eris kaversio n coefficient thatminimize sth edifferenc ebetwee nth eactua lan d thepredicte dchoic ei sconsidere d torepresen tth efarmer' sris k preference.

Althoughthi sapproac hma yescap eth ecriticis mtha tth edirectl y elicitated preferencesma yno tb erelevan tt orea lworl d decisions,th eobviou sweaknes so fthi sapproac hi stha ti ti s vulnerablet oseriou serror so finference .Becaus eris k preferencesar eassesse do nth ebasi so fth edifferenc ebetwee n actualfacto rus eo routpu tsuppl ylevel san dth elevel sderive d fromris kneutra l(expecte d profitmaximization )solutions ,th e approachattribute sth eentir edifferenc et oris kaversion .I n actualfact ,man yothe rfactor sma yexplai nsuc hdifferenc esuc h asa ninaccurat especificatio no fth emodel ,difference si n resourceendowments ,capita lconstraints ,differen tobjectiv e functions,an ddifference si nperceive drisk .

Theproblem sassociate dwit helicitin gris kpreference san dth e generalnon-applicabilit y ofmean-varianc eanalysi so rrelate d approaches,ha sle dt oth edevelopmen to fa nalternativ eris k efficiencyapproach .I tca nb emor egenerall yapplie da si tallow s theevaluatio no fentir eprofi tdistribution sinstea do fcertai n parameterso fsuc hdistribution sa si nmean-varianc eanalysis . Thisapproac hi sals obase do nth eexpecte d utilitymaximizatio n framework,an di sknow na sstochasti cdominancy .I tca nb eapplie d tosituation si nwhic hlittl ei sknow nabou tth edecisio nmakers ' preferences,i.e. ,i tdoe sno trequir ecomplet especificatio no f theutilit yfunctio nbu tonl yassumptio nabou tth egenera lshap e ofth efunction .

Gametheor y Gametheor yha sprovide da thir d seto fchoic ecriteri ao nwhic h tobas edecision sunde runcertainty .Gam etheor yi soriginall y developedt oanalyz esituation swher ea conflic to finteres t existsbetwee ntw oo rmor edecisio nmakers .Applie dt o agriculturalchoic esituations ,natur ei sconceptualize da son eo f decisionmakers .Natur eca npla yalternativ e 'states'unde rwhic h thereturn so rpay-off st oth eperso nplayin gagains tNatur e(i.e . thefarmer )vary .Gam etheor yavoid sexplici tassumption sabou t theprobabilit yo foccurrenc eo fdifferen t 'states',excep ti non e casewher e 'states'ar eassume d tob eequall ylikely .Gam etheor y modelshav ebee ncriticize do nth eground stha tth ederive d decisioncriteri aimpl ytha tnatur ei smalevolent .Thi si s probablyth emai nreaso nwh yafte ra ninitia linteres ti ngam e theory,recen tapplication so fthi sapproac hfo ragricultura l decisionshav ebee nminor .I nfact ,a swil lb ediscusse dlateron , basedo nthei rexperience ,farmer sar emor elikel yt omak ea n optimumus eo fth eopportunitie snatur egive sthem .

3.3.3 Satisficingvs .optimizin gbehaviou r Apartfro mth equestio no fho wt orepresen tchoic ecriteri ao f 44 farmerstha tinclud eris kconsiderations ,a neve nmor epervasive ; problemconfrontin geconomi cmaximizin gmodel sunde runcertainty , relatest oho wsuc hproblem sshoul db estructure d toallo woptimiu n choices.Wit hth eexplici tincorporatio no fris ki ndecisio n models,th ecomplexit yo ffar mproductio nprocesse san dassociate d decisionproblem sshoul dals ob erecognized .Uncertai ninfluence s fromth eenvironmen tma yno tonl yaffec tth eoutcome so f activities,bu tma yals oprofoundl yaffec tth estructur eo fth e choiceproble mitself .I nfact ,a swil lb ediscusse d later,on eo f thechie fproblem si ninvestigatin gth eimpac to funcertaint yo n decisionmakin gi sth eintrusio no fth etim efactor .Wit hth e passingo ftime ,mor einformatio nbecome savailabl eo nwhic ht o baseprediction so foutcome san dfeasibilit yo fchoic eoptions , andthu sbette rdecision sca nb emade .O nth eothe rhand ,a ta certaintim edecision shav et ob emad ea sfurthe rpostponemen tifla y implyreductio no fincom eo ra nopportunit y foregone.Hence ,th e timefacto rintroduce sa sequentia lelemen ti ndecisio nmakin gan d thepossibilit yt oadap tt oenvironmenta linfluence si nth ecouns e ofth echoic eproces s(Sectio n 3.2.1).

Sequentialsolution st odecisio nproblem sar edifferentiate dfrd m one-period solutionsb yth einformatio nutilize d byth edecisio n maker.Th einformatio npertain st othre efeature so fsequentia lj solutions(Antle ,1983) : .sequentia ldependenc eo fdecisions :decision smad e earlierma yaffec tthos emad elater ,s otha tth e optimalchoic eo fa ninpu tma yb ea functio no fa n earlierapplie dinput .I fth efarme rtake sthi sint o account,the nhi soptima linpu tchoic ei nperio d 1ma y dependo nho wi taffect soptima linput si nperio d2 ; .informatio nfeedback :informatio ntha tbecome s availabledurin gearlie rstage sma yb eutilize di n subsequentdecisions .Th efarme rma yus eknowledg eo n actualcro pdevelopmen trathe rtha ninitia lestimate s ofproductio nt odetermin eoptima linpu tlevel sa t laterstage si nth eproductio ncycle ; .anticipate d revision:decision smad eearlie rma yb e revised latera sne winformatio nbecome savailable . Thefarmer' sinitia ldecision sma yb edifferen ti fh e knowstha th eca nrevis ethes edecision sa tlate r stagesrathe rtha nhavin gt orel yo ninitia l expectations.

Sequentialchoic eproblem sar egenerall yno tamenabl et osolution s bymathematica lprogrammin gmethod so rb yan yothe roptimizin g method.Th eproble mwh ysequentia ldecisio nproblem sar eno teas y tohandl estem sfro mth efac ttha ta tleas ton eo fth e sequentially relateddecisions ,sa yth e(k)th ,canno tb efull yi specified untilon eo rmor eo fth erando mparameter si nth esyste m hasbee nobserved .Fo rth edecisio nvariabl ex(k )t ob eoptimal , itmus tb ebase do na nanalysi so fth eproble mincludin gth e 45 realizedvalue so fth erando mvariables .Thi smean sthat ,ex-ante , theoptima lvalu eo fth ex(k )variabl ewil lno tsimpl yb ea number,bu twil lb ea strateg y specifieda sa functio no fon eo r moreo fth erando mvariable sobserve dbefor edecisio n (k)i stake n (Andersone tal , 1977).Consequently ,i fth echoic eproble munde r consideration iseve nmoderatel ycomplex ,th esiz eo fth e programmingmatri xquickl yexpand st ounmanageabl eproportions . Thisexplain sth ever yfe wstudie stha texplicitl ytak eint o accountth esequentia lnatur eo fdecisio nproblems .

Todea lwit hsuc hchoic esituation sinevitabl ymean sa nanalytica l simplificationo fth eproble mth esolutio ni ssough tfor .Simo n (1979)indicate stha tther ear eessentiall y twoway so f simplifyingchoic eproblems : Thefirs ti st oretai noptimization ,bu tt osimplif y sufficiently sotha tth eoptimu m (inth esimplifie d world!)i scomputable .Th esecon di st oconstruc t satisficingmodel stha tprovid egoo denoug hdecision s withreasonabl ecos to fcomputation .B ygivin gu p optimization,a riche rse to fpropertie so fth erea l worldca nb eretaine d inmodels .State dotherwise , decisionmaker sca nsatisfic eeithe rb yfindin g optimumsolution sfo ra simplifie dworld ,o rb y findingsatisfactor y solutionsfo ra mor erealisti c world.

Simonindicate stha tth ecommonl yemploye ddichotom ybetwee n optimizingan dsatisficin g solutionsis ,t oa larg eextent , arbitrary.I nfact ,ther ei spracticall yn owa yo fdeterminin g whatdecisio nprocedur ewil llea dt oeconomicall y bestresults . Thereis ,however ,a clea rdifferenc ei nfocus :optimizatio n impliesemphasi so nth eobjectiv efunctio nt ob emaximize d (i.e., thechoic ealgorithm) ,wherea ssatisficin gprimaril yconcentrate s onth efeasibilit yan dconstrain tsid eo fdecisions ,includin g lacko rinsufficien t information.Th eeconomist' straditio ni st o adherestrongl yt ooptimizatio nan dt osacrific eproble m representationt ooptimizin galgorithms .Th efocu si so nth eac t ofchoic erathe rtha no nth edesig nan dstructur eo fth echoic e problem.I nfact ,emphasi so nchoic ecriteri aan dmaximizatio nha s resultedi nth eabov ediscusse dhypothetica ldecisio nmodel stha t have,i nth eword so fBesusan-Bu t (1980): thepeculia rqualit yo fbeing ,simultaneously , elaboratebeyon dth epower so fan ynorma limaginatio n andsimplifie dbeyon drecognition . ...(the yare ) designed todea lwit hth eaffair so fth emomen trathe r thana perio do ftim ean d ...embod ya wil d exaggerationo fth erationalit yo fth eindvidua la t thatmoment . Inothe rwords ,i tha sbecom ecommo nusag eamon geconomist st o employhighl ysophisticate d choicealgorithm sfo rrelativel y simplisticrepresentation so fth eproble msituation .I ti s 46 questionablewhethe rsuc hmodel sd oyiel dresult stha tar e ! relevantt oreal-lif echoic eproblems ,i.e. ,d othe ysolv eth e choiceproblem sfarmer sar eactuall yfacing .

Adifferen tclas so fdecisio ntheorie sdepart sfro mth eassumptio n ofmaximizin gbehaviou ran dtake sexplicitl y intoaccoun tman' s limitedabilit y toproces sinformation .Thi sso-calle d behavioural approacht odecisio nmakin gha sa lon gstandin ghistor y(e.g . Simon,1957 ;Cyer tan dMarch ,1963 ;Forrester ,1961) ,bu tunti l recentlywa slargel yneglected .Th eide ao fthi sapproac hi st o observeho wpeopl ebehave ,systematiz ean dformaliz ethei rrule s ofbehaviour ,an dstud yth edynamic so fmodel sbase do nthes e rules,usin gsyste manalysi san dcompute rsimulation .

Anexampl eo fa decisio ntheor ybase do nth ebehavioura lapproac h isth e 'eliminationb yaspects 'theor yo fTversk y (1972).Thi s choicetheor yinvolve sa screenin gprocedur eo falternative si na numbero fstages .Eac halternativ ei sconsidere d tob ecompose do f a seto fcharacteristic so raspects .A naspec ti sa nattribut eo r featureo fa nalternative ,'a naspec tca nrepresen tvalue salon g somefixe dquantitativ eo rqualitativ edimension s(e.g .price , quality,comfort )o rthe yca nb earbitrar y featureso fth e alternativestha td ono tfi tint oan ysimpl edimensiona l structure'(Tversky ,1972) .Fo rexample ,th easpect so fa cro p alternativecoul db eoutpu tlevel ,timin go foutput ,cas hinpu t requirements,dietar yvalue ,th eexten to fth efarmer' sknowledg e aboutth ecrop ,etc .Th etheor yassume stha tal laspect sar e perceivedb ydecisio nmaker sa sdiscrete .Whe ndecisio nmaker sup e acontinuou squantitativ edimensio no raspect ,the ydiscretiz ei t orcategoriz ei tint oa smal lnumbe ro fvalue s(Gladwin ,1980) .

Prospectsar ecompare do nth ebasi so fon easpec ta ta tim ean d thosetha td ono tsatisf ysom epredetermine d standardar e eliminated.Th eproces scontinue sb yconsiderin g progressively lessdiscriminatin gaspect sunti lonl yon ealternativ eremains . Similart olexicographi corderings ,th eapproac hdoe sno tallo w fora trade-of famon gdimensions .Furthe ri tdoe sno tensur etha t retained prospectsar eindee dsuperio rt othos eeliminated .

Gladwin (1980)develope da choic eprocedur ebase do nth e eliminationb yaspect stheor yo fTversky .I ti sessentiall ya tw o stageprocedure .A sth efirs tste pi nth eprocedure ,decisio n makersnarro wth ese to falternative st oa feasibl esubse ttha t satisfiescertai nminima lconditions .Tha tis ,the yscree nan d eliminatesom eo fth ealternative so nth ebasi so fsom eobviou s negativeaspect so rconstraint s(e.g .lan dno tsuitabl efo ra specificcrop ,to ohig hinvestmen trequirements ,n oexperienc e withalternatives ,etc.) .Thi sinitia lscreenin gan deliminatio n ofalternative soccur sunconsiousl y or 'pre-attentively'(Gladwi n andMurtaugh ,1980) .Afte reliminatio no firrelevan taspects ,th ^ decisionmake rpick son eimportan taspec tt oorder ,partiall yo ri fully,th ealternative son .Then ,th edecisio nmake rconsider sth e constraintstha tar eimpose do nth ealternative sfro mth e 47 environment,an dpasse sth eordere dalternative sthroug hth e (unordered)constraints .I fth ealternativ eordere d firstdoe sno t passal lth econstraints ,th ealternativ eordere d secondi s screened,an ds oon .I fnon eo fth ealternative spasse sal lth e constraints,th echoic ese ti sempty ,an danothe rchoic estrateg y isrequired .Stag e2 o fth etheor yi sthu sa nalgebrai cversio no f maximization subjectt oconstraints ,an dma yb erepresente d bya n algorithm,decisio ntree ,o rse to fdecisio nrule s(Gladwin , 1980).

3.4 Assessing theimportanc eo fris ki nagricultura ldecisio n making Fromth eforegoing ,i twil lb eclea rtha ta potentiall ylarg e numbero fvariable snee dassessmen tbefor eon eca narriv ea tsom e answerregardin gth eimportanc eo fris ki ndecisio nmakin gan dho w riskma yb eincorporate d inrelevan tchoic emodels .Simila rt o testingth ehypothesi so fmaximizin gbehaviou ro ffarmers ,testin g theexistenc ean dimportanc eo fris kaversio ni sdifficul ta si t concernsa genera lbehaviou rorientatio ntha tpervade sdecisio n makinga tal llevels .I nparticular ,determinin gth edegre eo f attitudinalris kaversio nan dit sinfluenc eo ndecisio nmakin g willb edifficul ta si tconcern sa nidiosyncrati cfacto rtha t cannotb eevaluate dagains ta nobjectiv emeasure .I nprinciple ,i t shouldb eles sdifficul tt oprov eth eoccurrenc eo fresource - induced riskaversio na sth eunderlyin g variablesar estructurall y determined andmor eeasil yobserved .

Apar to fth eliteratur esimpl ytake sth eexistenc eo fris k aversionfo rgranted .I nal lkind so ftraditiona lagricultura l practicesan dinstitutions ,i tobserve smeasure sthroug hwhic h farmersattemp tt oreduc erisk .Upo nclose rscrutiny ,however , thesemeasure sca nofte nb eexplaine d byothe rfactor ssuc ha sill - fittedrecommendations ,rea lcost sface db yfarmers ,o rth enon ­ existenceo fa marke tfo ragricultura lproducts .Moreover , existingagricultura lpractice softe ntur nou tt ob eoptima lbot h froma nincom ean da nincom estabilit ypoin to fview .

Atypica lexampl eo fth eapparen timportanc eo fris ki n determiningagricultura lpractice srelate st oWest-Africa ,wher e forsom etim ei twa sassume dtha tsol ecroppin gwa smor e productivetha nmixe dcropping ,an dth epersistenc eo fth elatte r wasconsidere d theresul to fth efarmers 'wis ht oreduc erisk . However,carefu lresearc hreveale dthat ,apar tfro mstabilizin g yields,mixe dcropping sals oyielde dhighe rtha nsol estand s becausethi stechniqu emake sa noptimu mus eo fenvironmenta l inputs,reduce sadvers econdition si nth eecosystem ,an d physicallyprotect sth esoi l(Norman ,1974) .Hence ,th e observationtha tfarmer sattemp tt ostabiliz eincom efro m productionactivitie sdoe sno tnecessaril y implytha tsuc h behaviourals oresult si na sacrific ei neconomi creturns ,i.e. , itdoe sno timpl ytha tfarmer sar eris kavers ei na stric t economicsense . 48 Inthi srespect ,i ti simportan tt onot etha t'fluctuatio n aversion'doe sno tnecessaril y imply 'riskaversion '(Lipton , 1979).Th eforme rconcern sth epsychologica ldispositio no f > individualst oavoi dunstead youtcomes .Suc hbehaviou rorientatio n maywel lprov et ob eeconomicall y efficienti nth elong-ru ngivG n theoccurrenc eo fstorag elosse sa swel la sinteres tan dtradin g costs(difference si nbuyin gan dsellin gprices ,marketin gcost$ ) thatar enormall yassociate dwit hlarg ebetween-yea rfluctuation s inagricultura loutput .Ris kaversion ,o nth eothe rhand ,shoul d bereserve dfo rthos esituations ,wher edecisio nmaker s consciously selectalternative stha teithe rhav elowe rris klevel s compared toothe ralternative sbu tar esimila rt oth eattainmen t ofothe robjectives ,or ,alternatively ,hav esimila rris klevel s butar eles sefficien ti nattainin gothe robjectives .Define di n thisway ,ris kaversio nimplie sth eexistenc eo fa conflic t betweena securit ymotiv ean dothe robjectives ,i.e. ,i talway s hasa cos ti nterm so fforegon ebenefits .

Theusua lapproac ht oasses sth eimpac to fris ko nagricultura l decisionmakin gi st oexamin eth evalidit yo fa particula rchoic e theoryan dunderlyin gbehavioura lassumptions .Suc hstudie s ' compareth edecisio nmaker' sactua lchoic ewit ha predictio n derived fromth etheor yunde rconsideration .Fo rexample ,t otes t thevalidit yo fth eexpecte dutilit ymaximizin gmode li ti scommo n toderiv ea farmer' sutilit yfunctio nfro ma nartificia lchoic e setan dthe nt oappl ysuc hfunctio nt oa n 'actualmodelle dchoic e situation'fro mwhic ha predictio ni sobtaine dwhic hi scompare d withth edecisio nmakers 'actua lchoice .

Inorde rfo rsuc hcompariso nt oconstitut ea tes tfo ra specifi c theoryan da nassessmen to fth eimportanc eo ffarmers 'ris k aversion,th emode lmus tb eaccuratel y specified inth esens etha t itrepresent sth echoic esituatio no fth efarme ri na meaningfu l way,th evariable si nth emode lshoul dhav ebee nmeasure d accurately,an dal lelement stha tar econsidere d relevantb yth e farmershoul db eincluded .Excep tfo rrelativel ysimpl echoic e situations,suc hcondition sar eprobabl ydifficul tt omeet . Moreover,i fothe rtheorie spredic tequall ywell ,n oconclusiv e evidencefro msuc htest sca nb eobtained .

Thus,i ti sno tsurprisin g thatfe wattempt shav ebee nmad et opu t onetheor yagains tth eothe remployin gth eabov eframework . Linet ^al' s(1974 )researc ho nsi xcommercia lfarmer si n Californiai son eo fth efe wrigorou stest so fth evalidit yo fth e expectedutilit ymaximizatio ntheor ya scompare d toexpecte d profitmaximization .Dillo n(1979 )mention sa numbe ro fothe r studiestha thav eattempte d totes tthi stheor ya spositiv ean d behavioural (Officeran dHalter ,1968 ;Wolgin ,1975) .A son eo f themajo radvocate so fth eutilit ymaximizatio nmodel ,h earrive d atth econclusio ntha tnon eo fth eevidenc ei sabsolutel y convincingan dtha tther ei sa variet yo fevidenc esupportin go r atleas tno tdisapprovin gothe rbehavioura ltheorie ssuc ha s SafetyFirst . 49 Boussard (1979)indicate stha tth emajorit yo fth emodel s discussed inSectio n3.3. 2 (excludingsom eo fth egam etheoreti c models),whateve rthei rtheoretica lsupport ,yiel dabou tth esam e resultswhe napplie d toactua lfar mproblems .'Thi sfac tsuggest s thepractica luselessnes so ftheoretica lquarrels .Bu ti ti seve n morestrikin gt oobserv eho weasil yon eo fthes emodel sca nb e expresseda sa napproximiatio no fanothe rone '(Boussard ,1979) . Dillon (1979)conclude stha t 'theliteratur egive sth eimpressio n thatstartin gwit ha reasonabl epositiv etheory ,i ti sno t difficultt ofin dreasonabl esuppor tfo ri tthroug heithe rmin d experimentso rreveale d choices'.A sris ktend st ohav ea conservativeeffec to nchoice ,an ytheor ywhic hrecognize sthi s marginaleffec tmay ,o naverage ,approximat efarmers 'choic emor e adequatelycompare d toexpecte d profitmaximization .

Asubstantia leffor tha sals obee nspen to nmeasurin gfarmers ' riskpreference semployin gdirec telicitatio nprocedure sa s described inSectio n3.3.2 .Youn g (1979)summarize sth eresult so f thesestudies .H earrive sa tth egenera lconclusio ntha tfarmer s indevelopin gcountrie sare ,b yan dlarge ,ris kaverse .However , Youngals oindicate stha ta considerabl eheterogeneit y existsi n riskpreference samon gindividua lfarmer swit hsuperficiall y commonbusines san dpersona lcharacteristics .Thi sma yeithe r indicateth eexistenc eo fris kaversio na sa pur eidiosyncrati c phenomenono rsho wth eunprove nreliabilit yo fth emethod st o assessris kaversion .W ehav eearlie rdiscusse dth esubstantia l problemsi nprovin gth evalidit yo fth eemploye d riskpreferenc e conceptsan delicitatio nmethods .Hence ,thes efinding sshoul db e treatedcautiously .I tis ,fo rinstance ,no tquit eclea rwha tkin d ofris kaversio ni sactuall ymeasured .I tappear stha t 'attitudinalris kpreferences 'an d 'resourceinduce dris k aversion'ma yeasil yb econfounded .

Underlyingth edifficult yi nassessin gth evalidit yo fth evariou s choicetheorie san dthu so fth eimplie dris kdefinitions ,i sth e moregenera lproble mo fisolatin gth eeffec to nchoic edu et oris k considerationsfro mothe rvariable sinfluencin gdecisions .

First,ris kmodel scontai na numbe ro f 'workingparts 'whic hten d toobscur ewha tactuall ydrive sth emode lint omakin gpredicte d choices(Walker ,1981) .Fo rexample ,simila rresult sma yb e obtained frommodel stha tpredic tchoice susin gexpecte dutilit y maximizationan dexpecte d profitmaximizatio nmodel si fth elatte r typemodel stak eint oaccoun ta sufficientl yhig hopportunit ycos t ofcapital .Further ,fe wstudie shav esimultaneousl yanalyze dth e contributiono fbot hperception san dattitude si nexplainin g choicesfo ron edecisio nsituation .I ffarmer semplo ysimpl e discountingmeasure st oaccoun tfo rris ki nactivit yreturns , returnperceptio nwoul db esufficien tt oexplai nconservativ e choices.O'Mar a(1971 )an dWalke r (1981)represen ttw oo fth efe w effortst oformall yestablis hth erelativ esignificanc eo fris k perceptionsa soppose d toris kattitude sa sdeterminant so f adoption. 50 ; Second,th estructur eo fth echoic eproble memploye d inmos t studiesi sessentiall y similart oth eclassica lstati c(linea r programming)mode li na riskles senvironment .Excep tfo rth e objectivefunction ,th ebasi cchoic estructur eremain sunchanged . Thesemodel slargel yignor ean yconsideratio nfo rth etimin go f eventsb y(paradoxially )assumin gtha texcep tfo rth eactivit y returns,al lothe rparameter sar efixe dan dno tsubjec tt oth e influenceo funcertai nenvironmenta lfactors .Fo rmos t agriculturaldecisio nsituation ssuc hassumptio ni suntenable .I n practice,ris ki sseldo mi feve rconfine d tothos ecoefficients . Bothtechnica lcoefficient san dresourc estock sma yb estochastic . Forexample ,o na cro pfar mth erat eo fcultivation ,sowing ,or ! harvesting,an dth etim eavailabl efo rthes etask sca nvar ywidtel y fromyea rt oyear .Further ,fe wstudie stak eint oaccoun tth e sequentialnatur eo fmos tfar mplannin gproblems .

Theabov einadequacie si nmode lspecificatio n severelyrestric t theusefulnes so fresult so fapproache stha tcompar epredicte d: inputlevel so rfar mplan sderive d fromone-perio ddecisio nmodel s withactua linpu tlevel so rarea so fcrop splante dtha tar e decidedupo nb yfarmer si nth ecours eo fth eproductio nprocess! . Suchapproac hma yonl yb evali di ncas eth eproductio nproces s doesno tallo wfo rtempora ladjustment st ob emad eb yfarmer si n thecours eo fth eproductio nprocess .However ,a swil lb e indicated later,farmer sar eofte nabl ean dd oadjus tinpu tlevel s andplanne dcro parea si ncas esuc hi snecessary .I nsuc ha situation,th eonl yvali dapproac hwhe nusin gone-perio ddecisip n models,woul d bet ocompar epredicte d inputlevel swit hlevel s thatar eplanne d byfarmer sa tth estar to fth eproductio nperiod .

Third,th emajorit yo fstudie sattempt st otes tth evalidit yo f oneall-encompassin g decisionrul eo rprocedur e (usuallysingl e attributeo ra lexicographi corderin go fdecisio nrules )whic hi s assumedt oappl yt oal ltype so feconomi cdecisio nproblem so f farmersirrespectiv eo fth ecircumstance sunde rwhic hdecision s aretaken .I tis ,however ,quit epossibl etha tdifferen tdecisio n criteriaan dprocedure sar euse dfo rdifferen tchoic eproblem so r forth esam etyp eo fchoic eproblem.unde rdifferen tcircumstances . Forexample ,ris kavertin gbehaviou rma ychang et oris kseekin g behaviouri fa perio do fpoo rproductio nyear si sfollowe db ya numbero fgoo dyears .I tappear stha ti nconstructin ga nadequat e modelo feconomi cbehaviour ,i twil lb enecessar yt oallo wfo r differentmode so fbehaviou rwhic hmigh tb ecombine d inon esingl e individual.

__5\ Thegenera lconclusio ntha tca nb ederive d fromthi srevie wi s1 thatnon eo fth epropose d theorieshav eye tbee nteste dt oth e extenttha ti tca nb euse da sa framewor kfo rexaminin gth e existenceo fris kaversio nan dassessin gth eimportanc eo frisk . Atleas tno tfo rsmal lfarmer si ndevelopin gcountries .Generally , itappear stha ti twil lb emor efruitfu lt oinitiall ytes tth e variousbehavioura lassumption sunderlyin gthes etheorie stha n * testingth etheor yitself .I tshould ,i nprinciple ,b eeasie r %o 51 provideknowledg eabou tho wpeopl ebehav etha nho wthe yshoul d bestdecid e(Day ,1979) .Fo rexample ,befor etestin gth e inherentlymor ecomple xhypothesi stha tdecisio nmaker sar e actuallymakin gdecision sa si fthe ywer eexpecte dutilit y maximizers,i tseem sappropriat et oinitiall y testth epropositio n thatfarmer si nfac td omaximiz eo roptimize .I nth econtex to f factorinpu tsupply ,i ffarmer sbehav ea smaximizers ,a necessar y condition shouldb etha tthe yperceiv ediminishin g returnst oa n increasing levelo fapplie dinputs .

Themai nreason ,however ,wh yeffort ss ofa rhav ebee nrathe r unsuccessfuli sth epoo rrepresentatio no fth echoic eproblem s facingfarmer si nth erea lworl dan dth efac ttha ti neconomi c studieshardl yan yaccoun ti stake no fho wfarmer sthemselve s perceivechoic eproblem san dsimplif ychoic eprocedures . AsS^cTaEeTlifiHrTheseshortcoming si sth elimite dknowledg e concerningothe raspect so ffarmers 'decisio nmaking ,i.e. ,ho w farmersperceiv ecos to fproduction ;ho wthe yvalu eoutput ;ho w conflictsi nfinancin gconsumptio nan dinvestment sar eresolved ; whatth eeffec ti so f 'leisure'preference so nlabou rinvestments ; etc. Asindicate d byWeek s (1983), thetendenc yamon geconomist s ist oconcentrat emor epowerfu lmodellin g techniqueso nmor e specialized aspectso ffarmin gan dfar moperato rdecisio nmakin g rathertha no nth eintegrativ eanalysi sactuall yneeded .

Thefollowin gaspect so fchoic eunde runcertaint y shouldb e accounted forwhe nassessin gth eimportanc eo fris kan dris k aversiono nhousehol dbehaviour : .th eexten tt owhic henvironmenta luncertai nfactor shav ea negativeinfluenc eo nth eoutcom eo fincom egeneratin g activities; . thedegre eo fcontro lfarmer shav eove rthes eenvironmenta l factorst omitigat ethei rnegativ eeffec to nth eoutcome so f incomegeneratin gactivities ; . therelativ emagnitud eo fdifference si nperceive d riskiness andprofitabilit y ofth evariou sincom eearnin g opportunities; .th esiz eo fthes erisk srelativ et oth etota lhousehol d income; .th eexten tt owhic hfarm-household sar eabl et otak erisks , takingint oaccoun tth enee dt ocove rbasi csubsistenc e requirementsa swel la sth ehousehold' sacces st onon - householdmean st osprea do rdiffus eth econsequence so fris k taking; .th eexten tt owhic hfarmer sar ewillin gt otak erisks .

Inanalyzin g theabov easpect so fdecisio nmakin gunde r uncertainty,thi sstud ystart sfro mth eassumptio ntha ti nmos t cases,th emajorit yo fpeople ,includin gsmal lfarmers ,ten dt o behaverationall yi nth esens etha tthe yexhibi tchoic epattern s 52 thatar esubjec tt orule stha tca nb eunderstood ,i.e. ,behavioij r isno ta rando mevent .Withou tsuc hpremise ,explanatio nan d ( predictiono fbehaviou rar eimpossibl ebecaus eal lrea lworl d eventswoul dthe nb eth eresul to fchance .Define di nthi sway , rationaldecision sencompas sal lpurposefu lchoice stha tar e consistentwit ha nindividual' sexpectations ,leve lo finformatio n andbehavioura lstrateg ywhic hexis ta tth etim ean dplac ea decisioni smade .Suc hrationalit yshoul db eunderstoo di nth e widercontex to fth eeconom yan dsocia lsyste mwithi nwhic h decisionmakin gtake splace .O fcourse ,th eabov econcep to f rationalitydoe sno timpl ytha temotional ,impulsive ,habitua lo r immitativetype so fdecision sd ono toccur . AVILLAG EHISTOR YO FAGRICULTURA LAN DDEMOGRAPHI CDEVELOPMEN T

Rationalityo fhousehol dbehaviou rshoul db eunderstoo dwithi nth e contexto fth eeconomi can dsocia lsyste mi nwhic hhousehold sact . Thus,logicall yprio rt oth eanalysi so fdecisio nmakin go f individualhousehold si sa descriptio nan danalysi so fth e environmentwithi nwhic hhousehold shav et ooperate .I fon e acceptsth enotio ntha tbehaviou ri sadapte dt oenvironmenta l constraints,understandin gpresen thousehol d behaviourals o requiresknowledg eabou tth ewa yi nwhic hhousehold sadapte dt o changesi nth eenvironmen ti nth epast .Fro msuc hperspective , decisionmakin gi sanalyze d interm so fpeople' sresponse st o dynamicenvironmenta lcircumstance stha timping eo nth e constraints,cost ,an dreturn so falternativ eincom eearnin g opportunities.Suc ha napproac hdeviate sfro mth eofte nemploye d approacho fanalyzin gdecision sfro ma n'innovation-adoptio n perspective'.Suc hframewor ktend st oimpl ytha tth epre - innovationstat ei sstati co rtradition-boun d rathertha na reasonablerespons et ocircumstances . Untilrecently ,developmen tplanner san da majorit yo f scholarsconcerne dwit hdevelopmen tassume dtha tth e agriculturalpractice so flow-incom erura lpeopl ear e governed bytradition ,chang eonl yslowly ,an dar e oftenpoorl yadapte d toloca lconditions .Moreover ,i t wasassume dtha ttraditiona lrura lsocietie swer emor e orles sstatic ,an dtha tthei rinstitution smus tb e brokendow no rgreatl ymodifie d becausethe ywer e constraintso nmor erationa ldevelopmen t (Hoben,1980) . Associatedwit hthi sbelie fi sth eide atha tsmal lrura l householdsar eavers et oris ktaking ,a facto rconsidere dt ob e importanti nexplainin g slowadoptio nrate so fne wan dimprove d technologies.

Thischapte rshow stha tthi sparticula rvillag eha sha da lon g historyo fchange si nth edecisio nmakin genvironment .Durin gth e period 1920t o1980 ,th enumbe ro fhousehold smor etha n quadrupled,fro maroun d 25i n192 0t o11 9i n1980 .A tth esam e time,th eaverag esiz eo flandholding sdecline d froma nestimate d 3.5h ao fricelan daroun d 1930t oroughl y1. 5h ao ffarmlan d (including0. 2h aupland )i n1980 .Accompanyin gthi sincreasin g man/landratio ,wa sa gradua lchang ei ncro pproductio n technology.Th einitia lsingl eric ecro pmonocultur ewa s transformed intoa complex ,multipl ecroppin gsyste mincludin g bothric ean duplan dcrops .Th eintroductio no fIR-varietie san d doubleric ecroppin gi sa ne wphas ei nthi slan dus e intensificationprocess .Despit eth ewidesprea dus eo f'modern ' riceproductio ntechnology ,recen tdemographi cdevelopment ssee m toindicat etha t- give npresen ttechnolog yan davailabilit yo f off-farmemploymen topportunitie s- th evillag eeconom yi s reachinga saturatio npoin twit hregar dt oth eabsorptio no ffarm - households.Th eaverag efar mholdin gsiz eo fhousehold stha t 54 startedt ofar mafte r 1970furthe rdecline d to1. 2ha .Moreover , duringth elatte rhal fo fth e1970 sth egrowt hrat eo fth enumbe r offar mhousehold sals ocontinue d todecrease :1.5 %pe rannu mfo r theperio do f1975-8 0compare d toa naverag epost-wa rleve lo f 2.4%unti l1975 .

Thischapte rstart swit ha brie fintroductor y descriptiono fth e naturalenvironmen to fth evillag e(Sectio n4.1) ,a furthe r elaborationo fwhic hi sgive ni nSectio n5.1.1 .Sectio n4. 2deal s withth einterrelationshi p betweendemographi cdevelopmen tan dth e manneri nwhic hfarm-household sexploi tthei rnatura lresources . Inth erecen tvillag ehistory ,fou rdistinc teconomi cdevelopmen t stagesar edistinguished .Th elas tstag e- intensificatio no fric e cropproductio n- wil lb edeal twit hi nmor edetai li nSectio n 4.3.Th eexten tt owhic hgovernment-initiate d development programmesdurin g the1970 ssupporte d farmers'attempt st o intensifycro pproductio ni sdiscusse di nAppendi xII .

4.1 Thenatura lenvironmen t Thestud yvillag ei slocate do nth enorth-easter n fringeo fth e Iloiloplain .Foothill so fth eWester nCordiller amountai nrang e dominateth enorth-wester npar to fth earea .Thes ehill sar e penetrated bynarro wvalley s(suok-suok )whic hru nou tt oth e easternpar to fth eare ai na bowl-shape dmini-plain .Thi sfoot - valleycomple xform sa considerabl ecatchmen tare afo rrainfall . Excessivecuttin go ffirewoo d inth epas t (1)denude dmos to fit s woodcove ran dseverel yreduce d itswate rretentio ncapacity . Consequently,heav yrainfal ldurin gth ewe tseaso nresult si na suddenheav yrun-off .I nsom evalleys ,waterflow sar epartl y channelled throughdrai nditche salon gth efoo to fth ehills ,bu t theircapacit y islimite dan dthe yeasil yoverflow .Mor ecommonly , waterdrain sfro mon efiel dint oanothe rfollowin gth e'stair ­ case'topograph yo fth earea .Toward sth eplai nportio no fth e area,wate rflow sbecom echannelle d throughtrack so flow-lyin g' fields(waterways) .The yfinall ydrai nint oa broo kintersectin g theplai narea .Th ebroo kdischarge sint oa rive rwhic henclose s thestud ysit et oth ewester nan dsouther nsites .Durin gperiod s ofcontinuou sheav yrainfall ,th edrainag ecapacit yo fth ebroo k issubstantiall yreduce d byth ehig hwate rleve li nth eriver , occasionallycausin gshor tperiod so fsustaine d floodingt odepth s of1 t o1. 5meters .I nadditio nt orainfall ,i nsom evalley s springsprovid esufficien twate rt oirrigat esmal larea so fric e duringdr yspell si nth ewe tseaso nan dsustai ncro pgrowt h1 t o 1.5month sint oth edr yseason .

Duet oth etopograph yo fth earea ,ther ear econsiderabl e differencesi nlan dquality .O nth ebasi so fthei rgeomorphi c location,i ntota lseve nlandscap eposition san dthre ewate r managementclasse swer eidentifie d (Section5.1.1) .Th esoil si n theare abelon gt oth ePelli cVertisol so rlo whumi cgle ysoils . Themai nsoi lserie srepresente d isa recen talluvia ldeposi to f finesoi lmateria lfro msurroundin guplands .I tha sa hig hcla y 55 fraction;i ti splasti can dsof twhe nwet ,bu tshrink san dcracks , andbecome sver yhar dwhe ndry .Soi ldifference si nth eare a generally followth ecaten ao rtoposequenc e (i.e.,th e topographicalsequenc eo fa slopin garea) ,wit hsoi ltype s becomingheavie rtoward sth elowe rlandscap epositions .

Agriculturei sinfluence d bya distinc twe tan ddr yseason . Therainfal lpatter ni sunimoda lan dconsist so f5 t o6 consecutivemonth so fove r20 0m man dbetwee n3 t o4 month so f10 0 to20 0mm .Th ewe tseaso ngraduall ystart si nMay-June ,wit h pondingo fwate ri nric efield susuall yoccurrin gi nJune-July . Thedr yseaso ncover sa perio do f4 month san dstart si nJanuary . Themajo rdeterminan to frainfal li sa ninter-tropica lconvergenc e zone,a perennia lban do fcloud soscillatin gbetwee nth e Philippinesan dth eIndonesia narchipelago .Originatin gi nth emid - Pacific,tropica lcyclone s(typhoons )usuall ypas sthroug hth e north-eastquadran to fth ePhilippine si na matte ro fday s- normallyintensifyin gth esouth-eas tmonsoo ni nth eproces s- beforerecurvin gtoward sChin aan dJapan .Tropica lcyclones ,o f whichther ear eusuall yabou t2 0ever y yeari nth ePhilippines , areresponsibl efo rabou thal fo fth ewe tseaso nrainfall . Consequently,we tseaso nrainfal li softe nclustere dint oshor t periodso fheav yrainfal l(Bolton ,1980) .Lat eseaso nrainfal li s usuallydiscontinuous ,wherea searl yseaso nrainfal l- Apri lan d May- i sprincipall yconvectiona lan dver yerratic .Mid-seaso n rainfalli smainl ycycloni can dmor edependable .Th edestructiv e windsusuall yassociate dwit hcyclones ,rarel ycaus ecro plodgin g inIloil oProvince .I nth elas t3 2years ,onl y1 4typhoon spasse d throughth earea .

4.2 Agriculturalan ddemographi cdevelopmen tunti l197 0 Villagesettlemen t Theorigi no fth evillag eca nb etrace dbac kt ofou rfamilie swh o stayedi nth evillag eare aaroun dth emid-19t hcentury .Th e descendantso fthre eo fthes efamilie sstil lfor mth emajo rpar t ofth evillag epopulatio ntoday .A tth etur no fth ecentury , growthrat eo fth eprovincia lpopulatio nwa slo w- abou t0.5 % annuallyfro m187 0t o190 3- probabl ydu et ohig hinfan tan dchil d mortalitya swel la shig hadul tdeat hrate scause db yth e occurrenceo fepidemi cdiseases .Aroun d 1900,a larg echoler a epidemicdecimate dth epopulatio ni nth eprovince .Th esam eperio d showeda noutflo wo fmos tvillager st oth enearb ytown .Th e politicalturmoil ,cause db yth e 'Iloilo-Uprising'agains tth e Spanishoccupant si n189 8an dth eAmerican-Filipin owa r(1899 - 1901),apparentl ycreate d sucha ninsecur esituatio ni nth erura l areastha tfamilie ssough tth esaf esanctuar yo fth enearb ytow n toprotec tthemselve sfro marme dattack sb yrobbers .Durin gthi s period fewfamilie sstaye di nth evillag epermanentl yan dfarmin g wasmainl ycarrie dou to na commute rbasis .Betwee n191 0an d1920 , thesettlemen tbecam emor epermanen tagain .Unti lafte rth eSecon d WorldWar ,th evillag ewa sa siti o(neighbourhood )o fanothe r village.I n1948 ,i twa sofficiall yrecognize da sa separat e 56

5 \ \ - X* /Kj^^^ •**•»\ __ Birth rot* 4

3

Rateo f naturalpopulatio n irtcrMM *m

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,...- ...... -..,....•••-••...... —-.....,. / \ 2 - /* Doathrot e

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2 • • ^*~ Rateo f inmigration ^P^ — • • 1 — i ^

*^ / \——N«t migration rat* 0

-1 S

Rono fnatura lpopulatio n

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2 - \ * ? Rat* of total • /*^^ • ? populationorowtt i \ m+ •

I - • • *..' •.* Vi ; . I f ;•• \—*—VT^ v -2 - \ ' A

-3 - - Not migration rata \f V

Fig. 4.1 Pattern of demographic development study village; three-year moving averages (1945-62) 57 administrativeunit .

Villagepopulatio ngrowt han dchange si nfar mtechnolog yan d employment Onaverag etota lpopulatio ngrowt hove rth eperio d 1920t o198 0 was2.7 %annually .Durin gthi speriod ,populatio ngrowt hrate s experienced strongfluctuation s (Figure4.1) . Themajo r determinanto fthes efluctuation swa sth ecyclica lmovemen to fth e netmigratio nrate .Associate dwit hthi sdemographi cdevelopmen t weremajo rchange si nagricultura lproductio ntechnolog yan d employment.I nthi sprocess ,fou rdistinc tdevelopmen tstage sca n bedistinguished .

I.1920-1940 :A closin glan dfrontie ran dth eemergenc eo fa tenantclas so ffarmers . Duringthi speriod ,th epopulatio nincrease dfro mabou t12 5t o19 5 persons,wit ha naverag eyearl ygrowt hrat eo f2.2 %(Tabl e4.1) . Thenumbe ro fhousehold snearl ydoubled ,wherea sth etyp ean d intensityo fcro pproductio nremaine d largelyth esame .On ecro p ofric epe ryea rwa sgrow nafte rwhic hth elan dwa slef tfallow . Beforetransplantin g rice,field swer eusuall yploughe donc eusin g awoode nploug hwit ha stee lend .Handweedin gwa sno tcommo n practice.Harrowin go fstandin gric ecrop swa spractise da sa methodo fwee dcontrol .Harvestin gwa smainl ydon ewit ha finger - bladeharvestin gknif e(kayog) .

Table4. 1 Changesi n population andnumbe r ofhousehold s forth eperio d1920-8 0

Year Population1 ) Numbero fhousehold s total farmers landless

1920 125 25 _ _ 1940 195 39 - - 1945 278 53 - - 1950 337 58 - - 1960 403 67 - - 1965 511 86 - - 1970 586 95 75(79 )2 ) 9O ) 1975 629 109 89(82 ) 8 (8) 1980 616 119 96(81 ) 11(9 ) Annualcompoun dgrowt h rate (%) 1920-50 3.4 2.8 - - 1950-60 1.8 1.5 - - 1960-70 3.8 3.6 - - 1970-80 0.5 2.3 2.5 2.0 1975-80 -0.4 1.8 1.5 6.5 1)Fo r192 0an d1940 ,th epopulatio ni sestimate do nth ebasi so fth e numbero fhouseholds ,assumin ga naverag ehousehol d sizeo ffiv e persons. 2)Figure si nparenthese sar epercentage so fth etota lnumbe ro f households. 58 Apartfro mric ecultivation ,caraba oraisin gprovide da nimportan t additionalsourc eo flivelihood .Uplan dareas ,hardl yuse dfo r cropcultivation ,offere d sufficientgrazin garea sfo rth ecattl e herds.Margina llowlan darea swer elef tuncultivate d andyear-to- ­ yearrotatio no fric elan dwa sstil lpractised .A traditiona lhome - basedweavin gindustr yprovide d regularemploymen tfo rmos twome n andwa sa mai nsourc eo fcas hincom efo rth ehousehold .

Absorptiono fhousehold swa spossibl ewithou ta substantia l declinei nfar msize san dincom elevels ,partl ydu et oa nope n land frontier,an dpartl ydu et oa proces so ftransfe ro f cultivationright sfro mth e(well-educated )childre no fth e relativelylarger ,town-base d landowners- wh oapparentl y preferred cityjob st oa nagricultura loccupatio n- t oth e childreno fth eresiden tfamilies .Thi sprocess ,couple dwit ha rapidfragmentatio no finherited ,owne dlan da swel la slos so f ownedlan ddu et osale so rmortgaging ,resulte di na rapi ddeclin e ofth enumbe ro fowner-operators .Share-tenant san dpart-owner s emergeda sth epredominan tclas so ffarmer si nth ecommunity .A t theen do fthi speriod ,i tgraduall y becamemor edifficul tt o acquireland .Mos tvacan tlowlan darea san dlan dpreviousl yfartte d byth elarge rlandowner swer ebrough tint ocultivatio nb yvillag e farmers.

II.1940-1960 :Increasin gpopulatio npressur eo nlan dan d worsening tenurecondition s Alarg einmigratio nflo wdurin gth eearl ystage so fth eSecon d WorldWa rcause da shar pincreas ei nth etota lpopulation :7.3 % duringth eperio do f1940-45 .Mos to fthes efamilie sbecam e permanentresident safte rth ewar ,bringin gth etota lpopulatio n to27 8person si n1945 .Thi stren do finflo wcontinue ddurin gth e firstfe wyear safte rth ewar ,consistin go fmigran tfamilie sfro m neighbouring,economicall ydepresse duplan dareas .Th eperio do f 1945-50showe dver yhig hbirt hrate sa swel la sdeat hrates ,whic h bothdecline d gradually towardsth een do fth e1940 sresultin g}. n amor eo rles sconstan tannua lrat eo fnatura lpopulatio ngrowt h ofaroun d 3%.Consequently ,tota lpopulatio ngrowt htha tha dbee n veryhig hjus tafte rth ewa rdecline drapidly .

Afterth ewar ,farmer sgraduall y startedcultivatin gth evacan t uplandareas ,probabl yfollowin gth eexampl eo fth eimmigran t upland farmers.Thes earea swer en olonge ruse da sgrazin garea s forcattl esinc eth ewa rha ddecimate dth enumbe ro fcarabaos . Cropsgrow no nth euplan darea sinclude d corn,mungbean s (Phaseolusaureus) ,an dtar o(Colocasi aesculent aspp .dasheen) , locallyknow na sdagmay .Ric ecultivatio nbecam emor eintensiv e withimprove dlan dpreparatio nassociate dwit hth egradua l introductiono fth estee lplough .Seasona lmigratio no fgroup so f youngwome nt oric earea si nth enorther nprovinc eo fPana y (Capiz),wher ethe yfoun demploymen ta sharvesters ,increased .A home-based sewingindustr yo na piece-wor kcontrac tbasi srapidl y becamea nimportan tcash-earnin gactivit y forwomen .I treplace d theexistin gweavin gindustr ywhic hha ddisappeare ddurin gth e 59 war.Th elarg einflu xo fne whousehold scause da shar pincreas ei n thedeman dfo rland .A sa consequence ,th elandlord' sshar efo r newlyacquire dlan dtenur econtract sstarte dt oincreas efro ma one-third sharet oa two-fift hlevel .Thi schang ei nshar eren t levelswa sth ebeginnin go fa perio do fworsenin gtenur e conditionswhic hlaste dunti lth edeclaratio no flan drefor mi n 1973.

Duringth emid-1950s ,poo reconomi ccondition sinduce da relativelylarg enumbe ro ffamilie st omigrat et oMindanao .Mor e than10 %o fth evillag ehousehold smigrate d toth ene wfrontie r areasi nMindanao ,a nislan dlocate d some50 0k mfro mth evillage . Theywer eparticipant si na governmen torganize dresettlemen t programmewhic hinvolve dth eallotmen to fa 5 h afar mt oever y household.Thi soutflo winclude dyoun gcouple sa swel la sfamilie s witholde rchildre nwh ofoun d futurefarmin gopportunitie si nth e villageto olimited .Fo rinstance ,th elatte rgrou pinclude don e householdwit hfiv eson stha towne d (andsold )3 h ao fgoo d riceland.Th emigratio ninflo wdurin gthi sphas ewa sinsignifican t andconsiste dmainl yo fyoun gpeopl ewh ocam et oth evillag et o marry.Th enatura lpopulatio ngrowt hincrease d sharplya tth een d ofth e1950 swhe nth echildre no fwa ran dpost-wa rin-migrant s reachedthei rreproductiv eag ean dth edeat hrat eha dstabilize d arounda leve lo f0.5% .Tota lpopulatio ngrowt hdurin gth eperio d 1945-1960reache da comparativel y lowannua lleve lo f1.65% , mainlybecaus eo fth eoutmigratio no ffamilie st oMindanao .

III.1960-1970 :Lan dus eintensificatio nunde ra rapi ddeclin eo f farmsize s Thisperio drecorde da ne tpopulatio ninflow .Th erat eo f inmigrationfluctuate dbetwee nth e1 %an d2 %leve lmainl ydu et o twowave so freturn-migrant sfro mMindanao ,wherea sth erat eo f outmigrationdecline d toa leve lo fabou t0.5% .O nth eothe rhand , thehig hrat eo fnatura lpopulatio nincreas econtinue d tob ehig h throughoutthi sperio dmainl ydu et oth erelativel ylarg enumbe r ofyoun gmarrie dcouple sstemmin gfro mpost-wa rinmigrant san d possiblypostponemen to fmarriage sdurin gth ewar .Consequently , thetota lpopulatio ngrowt hrat ewa sver yhigh ,fluctuatin garoun d anannua lleve lo f4.5% .

Asa resul to fth eincreasin g numbero fhouseholds ,far msize s started todeclin erapidly .Thi soccurre d inspit eo fth efac t thatth eare afarme db yvillag efarmer scontinuousl ybu tslowl y increasedthroug hth erentin gi no flan dfro msmal ltown-base d commuterfarmer smovin gou to fagriculture .Bot hric ean duplan d cropcultivatio nbecam esubstantiall yintensifie d throughth e introductiono fimprove d seeds,bette ragricultura lpractice san d multiplecropping .A numbe ro fimprove d ricevarietie s- release d byth ePhilippin eSeedboar d- entere d theare ai nth elatte rhal f ofth e1950s ,o fwhic hth eBE- 3variet ybecam emos tpopula r occupyingmos to fth eric eare ab yth een do fth e1960s .Thi s photo-sensitivevariet ywa srelativel yshort-stature dan dha da somewhatshorte rgrowt hduratio ncompare d toth eexistin gMaca n 60 varietiessuc ha sArabon .Compare dt oArabon ,i twa smuc hmor e responsivet ofertilize ri nterm so fgrai nyield .A sfarmer s • recall,a fertilize dArabo ncro pcoul dgro wove rtw ometer shigh ! causingsubstantia lproblem swit hharvesting .I ttoo ka lon g period (roughlyestimated ,a perio do fte nyears )befor eth eBE- 3 varietywa sadopte do na nappreciabl escale .Th ereaso nattribute d byfarmer st oth eslo wrat eo fadoptio nwa sth einferio rgrai n ! qualitycompare dt oexistin gvarieties .Althoug hth eyiel do ftbj e BE-3wa shigher ,th enutritiona lvalu eo fth evariet ywa sfoun dt o besubstantiall y lower,du et oa lowe roi lcontent .Farmer sassor t thatwit ha goo dbreakfas to fArabo nthe ycoul dwor kunti lafte t noon,wherea swit hth eBE- 3mea lthe yalread ybecam ehungr ya t1 1 o'clock inth emorning .Accordin gt ofarmers ,afte rsom eperiod, ' thegrai nqualit yo fth eBE- 3improve ddu et ocross-fertilizatio n withth eMaca nvarieties .

Togetherwit hthes ene wric evarieties ,fertilize ran dpesticide s wereintroduced ,an dlan dpreparatio nan dcro pcar ereceive dmot e attention.Th enecessit yt ous efertilize rt oincreas eproductio n perhectar ei sprobabl yth emai nreaso nfo rth eincreas ei n : adoptiono fBE- 3durin gth elatte rhal fo fth e1960s .Farmer s started togro wuplan dcrop si nth elowlan d fields:cor na sa firstcro pbefor eric ean dmungbea no rcowpe a(Vign aunguiculata ) asa relay-cro pafte rrice .I nth euplan d fields,th eare aplante d todagma yincrease dsubstantiall yan di tgraduall ybecam ea n importantcommercia lcrop .Squas h (Cucurbitamoschata )an dmelo h (Cucumismelo )wer eothe rcrop sintroduce d inuplan dfields .B y theen do fth e1960 sth eentir eusuabl euplan dare awa soccupied .

However,accordin gt ovillag epeople ,despit ethes eimprovement s inagricultura lproductio ntechnology ,economi ccondition sfo r mostfamilie sremaine ddepressed .Apparently ,th eincreas ei nlnp d productivitywa sno tsirffjjienf .tg_2££fjgl lth edft 1"1"1'"0" in*" hfslF-fa r oT^a?mTioTdings7~a~processwhic haffecte dyoun ghousehold si n "particulaf7~Moreover,tenur econdition sremaine dbad .Thi swa s furtheraggravate db ya numbe ro fsuccessiv eyear so flo wric e productiondu et opoo rrainfal lcondition sa tth een do fth e1960 s aswel la sth edeclin eo fth ehome-base d sewingindustry .Uplan d cropsbecam eth elifelin eo fth evillage .Ric ewa sbough twit hth e proceedso fdagma yproductio nan dbanana san dcor nbecam e importantsubstitute sfo rric ei ndail ymeals .Nevertheless ,a largenumbe ro ffamilie sentere d intoa heav ydeb tburde ncertai n amountso fwhic hwer estil lbein grepai da tth een do fth e1970 s (Section6.3.2) .

Atth een do fthi sperio ddeclinin gbirt hrate san da ne w outmigrationflo wresulte di na shar pdeclin ei nth erat eo ftota l populationgrowt han dne tpopulatio noutflow .Outmigratio nwa s mainlydu et oyoun gsingl emal ean dfemal eresident smigratin gt o urbanareas ,i nparticula rIloil oCit yan dManila .Thi syout h migrationwa spartl yresponsibl efo rth elowerin go fbirt hrates . Eveni fthe yeventuall yreturne dt oth evillage ,i tmean t postponemento fmarriage . 61 IV.1970-1980 :Intensificatio no fric ecro pproductio nassociate d witha nincreasin gus eo ffamil ylabou r Duringth eperio do f 1970-1980,th evillag eexperience dth e introductiono fa staggerin gnumbe ro fdevelopmen tprogramme san d institutions.Mos to fthes eprogramme swer ei nlin ewit hth e- i n theearl y 1970s- generall yhel dbelie ftha tgovernmen tsuppor t programmesi nth efor mo fagricultura lextension ,low-cos tcredit , and farmers'organization swer eessentia lprerequisite sfo r getting 'agriculturemoving' .Afte ra privat edevelopmen t organizationintroduce da consume rcooperativ ei n1970 ,an da localcredi tunio ni n1971 ;lan drefor mwa sproclaime d in1972 ;a communalpi gfattenin gan dbreedin gprojec tals ostarte d in1972 ; aric eproduction-cum-credi tprogramm e (Masagana-99)wa slaunche d in1973 ,togethe rwit ha loca lfarmers 'association ;a cooperativ e marketingorganizatio nwa sinitiate di n1976 ;a birt hcontro l programmestarte di n1978 ;th evillag ebecam ea pilo tvillag efo r anintegrate d provincialdevelopmen tprogramm ei n198 0(Kabsaka) ; ane wloa nschem ewa sorganize d bya cooperativ erura lban ki n IloiloCity ;and ,finally ,a ne wfarmers 'associatio nwa s established in1981 .

Theseprogramme shav ebee ncriticize d becauseo fthei rso-calle d 'top-down'nature .Th efac ttha tthe yar econceive dan dinitiate d froma nabove-villag eleve lwithou tconsultin gth ecommunit yabou t feltneed san dprojec tpriorities .Als oi nthi svillage ,thes e programmeshav eha da limite d positiveimpac to nth eeconom y becausethe ywer etechnicall yill-conceived ,no twel ladapte dt o localcircumstances ,o rno tservin gan yparticula rpurpose .I f anything,the yhav einstille d theattitud et ob ecautiou swit h projectsinitiate d fromoutsid eth evillag eo na larg egrou po f villagers.A son eyoun gfarme rexpresse dwhe naske dwhethe rh e would jointh efarmers 'association : 'Iwa sno tye tfarmin gwhe n theystarte d toorganiz ethemselve san di fthe ywil lreorganize ,I willno tjoi nbecaus ei tdoe sno tbenefi tit smember salthoug hi t alreadyexist sfo rquit ea lon gtime .Thi sorganizatio ni sjus ta bigwast eo ftime' .I nAppendi xII ,th eexperienc eo fth evillag e withtw oo fthes eprogramme si sreviewe d indicatingwh ythe y performed poorlyan dactuall yha da nadvers eeffec to nth e developmento frainfe dagricultur ei nth evillage .I nfact ,the y presented substantialrisk st ofar mhouseholds .

However,whe nintroduce d in1973 ,bot hlan drefor man dth e Masagana-99programm e (M-99),provide da welcom erelie ffo rth e depressedeconomi csituatio na tth een do fth e1960s .Lan drefor m effectivelyrestore d share-rentlevel st oth epre-wa rone-thir d sharecontract ,wherea smos tfixe dren tlevel swer eadjuste d downwards.But ,du et oth ehig hfragmentatio no flan downershi p titles,th emai nobjectiv eo fth elan drefor mprogramm e- transferringlan dfro mlandowner st otenant sb ywa yo fmakin gthe m amortizingowner s- wa sneve rrealize d inth evillage .Althoug ha considerableportio no fth elan di si nth ehand so fa smal lrura l elitelivin gi nth enearb ytown ,landholding snormall yd ono t exceedth e1 0h asize .Apparently ,th ethre etow nfamilie swit h 62

40 30 20 20 30 40 Number Number

Fig.4. 2 Populationpyramid ;ag edistributio no fth e residentpopulatio nan do foutmigrant s(1980 ) largerholding s(u pt o4 0ha )ha dampl etim et oredistribut eth e titlesamon grelative so rwer eno tconsidere dlarg eenoug ht o warrantredistributio nb yth eDepartmen to fAgraria nReform .

Formos tparticipatin gfarmers ,th eM-9 9programm emean ta one ­ timeinjectio no fcas hwhic hwa smainl yuse dt oconver texistin g (expensive)loca lcas hdebt sint oban kdebt sa swel la st opa yfo r theschoo lfee so fchildre nfo rHig hSchoo lenrollment .Becaus eo f repaymentproblem s(Appendi x II),thes eban kdebt swer elate r againconverte d intoloca ldebts .Wit hth eintroductio no fth eM - 99package ,th ene wIR-varietie sbecam eavailabl ean dlibera l amountso ffertilize ran dpesticide swer eprovide di nkind .Fo r reasonsdiscusse d inSectio n4.3 ,th eus eo fth ene wvarietie s increasedrapidl yafte r1975 .

Afteroutmigratio nrate ssee mt ostabiliz efo ra shor tperio d [ (1972-74),probabl ydu et oth eincrease dHig hSchoo lenrollmen t whichresulte d ina hal to foutflo wo fvillag eyout ht oth e unskilledurba nsector ,outmigratio nstarte dt oincreas ea ta n accelerated pace.Hig hschoo lgraduate sforme dth emajo rstrea mo f theout-migrant smovin gou tt oth eurba nsector .Thei remploymen t inurba ncentre sgraduall yshifte dfro munskille d tomor eskille d onesfo rwhic ha highe reducatio ni srequired .Famil y outmigration,whos edestinatio nremaine drura lthroughou tthi s period,becam erelativel yles simportant .Th erat eo finmigratio n alsoincrease d towardsth een do fth e1970s .Th egrou po f inmigrantsconsiste dpartl yo freturnin gfamilie swit hkinshi p relationsi nth evillage ,an dpartl yo fsingl emigrant sreturnin g fromth eurba nsecto rt oth evillag efo rmarriage .However , throughoutthi sphase ,th enumbe ro foutmigrant soutweighe dtha t ofinmigrant sresultin gi na larg epopulatio noutflow . 63 The population pyramid of 1980 (Figure 4.2) shows the striking result of themigratio n pattern in this period, i.e., half of the population in theag e category of 15-30 yearswer e out of the village.Durin g the last few years of the 1970s,mos t men and nearly all women in thisag e category,wh o were not enrolled in High School or married,migrate d out of the village.A sa result of the large net outflow and of the slowly declining rateo f natural population growth, the total population,whic h had increased at an almost constant rate of around 2%i n the previous three decades,eve n started to decline somewhat during the latter part of the 1970s.

The occupational structure of the village,a so fMarc h 1979 (Table 4.2), reflects itsagricultura l character. If a population between 13an d 65year s of age isassume d as 'economically active' in the sense that they can participate in productive labour,th e potential labour force in the village was 363 persons - 178male s and 185females .Roughl y 22%o f both the economically active male and female population isattendin g school.O f the remaining male population,86 %i s directly engaged in self-employed farming and 5% isengage d in occupations that are related to agriculture such as farm wage labour ormarketin g of farm products.Mor e than half of the group of farmers doesno t mention a secondary occupation,

Table4. 2 Occupationalstructur eo fth eeconomicall yactiv epopulatio n (13-B5years )a so fMarc h197 9 Male Female Numbero feconomicall yactiv eperson s 178 185 Majoroccupatio n Farming:ow nfar m 661 ) 1 farmlaboure r 3 2 Tappingcoconu tmin e 1 0 Carpenter 3 0 Othernon-far mself-employe d 3 4 Salariedworke r 0 1 Household 1 69 Schooling 22 22 None 1 1 Total 100 100 Minoroccupatio n Farming:ow nfar m 26 38 farmlaboure r 24 15 Tappingcoconu twin e 1 0 Carpenter 3 0 Ricemil l 2 0 Othernon-far mself-employe d 4 10 None 40 37 Total 100 100 1)Percentag eo ftota leconomicall yactiv epopulation . 64 whereasone-thir d isengage di nfar mwag elabour .Othe rsecondar y occupationsbesid efarmin ginclud ecarpentr yan dth emarketin go f agriculturalproducts .Onl yfe wmal evillager sar eemploye da s full-timewag elabourers ,indicatin g thesmal lnumbe ro flandles s workers.

Thefemal epopulation ,excludin gthos ewh oar eattendin gschool , isprimaril yoccupie dwit hhousekeepin g (87%).However ,beside s housekeeping,a larg enumbe ro ffemale si sactiv ei na secondar y occupation,mainl yfarmin g (48%),far mwag elabou r(13% )o rothe r economicactivitie srelate d tofarming .O fth e14 %o fth efemal e populationno tprimaril yengage di nhousekeeping ,two-third sar e occupiedwit hfarmin go rfar mrelate dactivities .A considerabl e numbero fvillager si semploye doutsid eth evillage ;o fth etota l economicallyactiv emal ean dfemal epopulation ,14 %an d22% , respectively.

4.3 Technologicalchang ei nth e1970 s Theinitia lintroductio no fth enon-photosensitive ,short-stature d IR-varieties- IR2 0an dIR2 2- throug hth eM-9 9programm ewa sno t verysuccessful .First ,an dmos timportantly ,accordin gt ofarmer s therewa sn oclear ,observabl eyiel ddifferenc ebetwee nthes ene w varietiesan dth eexistin gBE- 3variety .Productio nfunctio n analysisconfirm stha tbot hvarietie sar eresponsiv et ofertilize r (Chapter8) .Second ,farmer sexperience d problemswit hovergrow n seedlingsbecaus eo noccasions ,field sdi dno tsubmerg ei ntim ejt o allowtimel ytransplanting .I ncontras twit hBE-3 ,delay si n transplantingo fth efixe dgrowt hduratio nIR-varietie sma yresul t insubstantia lyiel dreduction so rtota lseedlin g loss.Third , transplantersfoun ddifficultie si ntransplantin g therelativel y smallIR-seedling swhic har ea tleas ttwic ea sshor ta sth eBE- 3 seedlingsa tth etim eo ftransplanting .

Theattitud eo ffarmer stoward sIR-varietie schange dwit hth e introductiono fIR3 0i n1975 .I tha da shorte rmaturit yperio d comparedt oIR2 0an dIR22 ,an dallowe ddoubl ecroppin go fric eJ n thepartiall y irrigatedarea si nth evillage .Further ,becaus ei t couldb eharveste dearl yOctobe rcompare d toth elat eharvestin g periodo fBE- 3i nDecember ,i treduce dth elea nmont hperio db y twomonths .

Themai nreason ,however ,fo rth erapi dadoptio no fthi svariety , andespeciall yit ssuccesso rIR36 ,wa sth efarmers 'discover ytha t itwa spossibl et odirectl yso wpre-germinate dseed so fthes ene w varietiesunt opuddle d fields(we tseeding) ,thu sskippin gth e• laborioustransplantin goperation .I nessence ,thi sseedin g techniquei ssimila rt oth ewet-seedbe d preparationfo rth e raisingo fseedlings .Although ,farmer soccasionall yuse dthi s methodfo restablishin gBE- 3i nlarge rfields ,i twa sconsidere d aninferio rtechnique .Whe nwe tseeded ,th etal lBE- 3easil y lodgedan ddi dno trecove rwel lafte rth ecro pexperience da droughtperiod .However ,wit hth ene wIR-varietie s(IR3 0an dIR36 ) 65 itprove dt ob esuc ha viabl ean deconomi ccro pestablishmen t techniquetha ti tcoul db econsidere da nimportan tbreakthroug hi n rainfedric eagricultur eactuall ystimulatin gth eus eo fIR - varieties.Despit eth esubstantia lhighe ragronomi crisk sattache d towe tseedin gric ecrop scompare d totransplantin g ricecrop s (Chapter7 )an dagains tth eexplici trecommendatio no fth e extensionservic e (Appendix II), itbecam eth emos twidel yuse d techniquefo rcro pestablishmen to fIR-varieties .Th edisadvantag e thatwe tseede dric efield sar egenerall ymor edifficul tt owee d and requiremor eweeding scompare d totransplante d fieldsi s largelyoffse tb ya substantia lreductio ni npaid-ou tcos tfo r hiringtransplantin g labour,amountin gt oaroun done-fift ho fth e farmers'gros sproductio nshare .Moreover ,we tseedin go fric e facilitatesth espreadin gan dmor eefficien tus eo fhousehol d labourresource sthroug hth estaggere destablishmen to fsmal l areaso fric ecrops .

Theintroductio no fIR3 0an dth epossibilit yt ous eth ewe t seedingmetho do fcro pestablishmen twit hthi svariet ywa sth e starto fa serie so fchange si nbot hric ean dnon-ric efarmin g causinga structura lshif ti nth epatter no flabou rutilizatio n duringth esecon dhal fo fth e1970s .Unti l1975 ,hire dlabou r constituted themajo rpar to fth etota llabou rus ei nagriculture . Bothtransplantin gan dharvestin go frice ,comprisin g64 %o fth e totallabou rrequirement spe rha ,wer eoperation straditionall y carriedou tb yhire d labourers.Lan dpreparatio nan dcro p maintenancewer etypicall yfamil yan dexchang elabou ractivities . Afterth emai nric ecro pwa sestablishe d (June/July),contrac t labourgroup sfoun demploymen ti nth ever ylabou rintensiv ean d lucrativeharvestin go fdagma ywhic hwa sorganize daccordin gt oa strictgrou protatio nsyste mcontrolle d througha highl y centralizedmarketin g system (2).Thes ehire dlabou ractivitie s werecarrie dou tb yfar mhousehold s- wit hsmalle rfar mhousehold s participatingmor efrequentl y- an da fe wlandles shouseholds . Duringpea klabou rperiods ,labourer sfro moutsid eth evillag e participated aswell .

Thislabou rutilizatio npatter ndrasticall ychange dwit hth e adoptiono fth efixe dgrowt hduratio nIR-varietie san dth ewet - seedingmetho do fcro pestablishment .First ,timin gbecam ea mor e importantfactor ,determinin gth eharvestin gdat eo fth efirs t ricecro pan dthereb ydeterminin gth epossibilit yo fa secon dric e cropa swel la sth eduratio no fth eperio d forwhic hhousehold s possiblyha dt oborro wric efo rconsumption .Thi sinduce d individualfarmer st oconcentrat emor eo fthei rlabou ro nself - employed riceproductio nactivitie san db eles sdependen tupo n outsidesource so flabour .I tcause da patter no fstaggere dlan d preparationan dseedin go frelativel ysmal lareas .

Second,b yreducin gth elabou rrequirement sfo rcro pestablishmen t andb yexpandin gth eric eharves tperio d from1 3t o2 1weeks ,th e IR-varietiestruncate dth etw omajo rlabou rdeman dpeak s (transplanting andharvesting )i nric ecro pproduction .A sa 66

Table4. 3 Changesi nvillag elabou rus efo rric eproductio n

Labourus epe rhectar eb ytas kan dtota lvillag elabou rus e 19531 ) 19702 ) 1978 1980 -— ______(workdays) -- - Land preparation 15.1 (18) 3 )25. 0( 26) 24.4( 30 ) 24.7( 38) Cropestablishmen t 28.1 ( 34) 24.4( 25) 13.8( 17) 7.4( 12) Weeding/replanting 9.4 ( 11) 7.8 ( 8) 7.8 ( 10) 8.6 ( 13) Othercro pcar e 1.9 ( 2) 2.4( 3) 2.4( 4) Harvesting 30.7( 37) 37.0( 39) 33.7( 40) 21.1( 33) Total 83.3 (100) 96.1(100 ) 82.1(100 ) 64.1 (100) Totalvillag eric e area (ha)4 ) 113 137 154 Totalvillag elabou r use (workdays '00) 109 112 99 Labourus epe r household (workdays) 129 108 93

Percentagechang ei ntota lvillag elabou rus eb ytas k 1970-78 1978-80 1970-80 (percentage)

Land preparation +18 ( -2) 5) +14 ( +1) +34 ( -1) Cropestablishmen t -32 (-43) -40 (-46) -41 (-70) Weeding/replanting +21 ( 0) +25 (+10) +50 (+10) Othercro pcar e +54 (+26) +11 0) +71 (+26) Harvesting +10 ( -9) -30 37) -23 (-43) Total +3 (-15) -12 (-22) -9 (-33) 1) Dataar e basedo na 195 3surve yconducte db yQuintan ai na nearb y village (Quintana,1954) . 2) Estimatedo nth e basiso fth eusua llabou rinpu tprofil efo rtransplante d and direct seededBE- 3crops . 3) Figuresi nparenthese sar epercentage so ftota llabou ruse . 4) Thisare ai sth esu mo fth earea sunde rfirs tan dsecon d ricecrops . 5) Figuresi nparenthese sar epercentage schang ei nlabou rus epe r hectare. 67 result, demand for labour from outside the village declined as a more effective use of the existing pool of village labour became possible.Further ,th e pattern of staggered crop establishment also resulted in amor e effective useo f available family labour. Most of the labour required for the extra weeding of wet seeded rice came from this source.I t is estimated, however, that the total labour requirements of the village for rice production did not changemuc h during the period of 1970-78,becaus e the reduction in labour use due towet-seedin g was counterbalanced by an increase in labour use for the simultaneously introduced second rice crop (Table 4.3).A third cause for the change in the labour utilization pattern was theabrup t disappearance of the above described harvesting system for dagmay.Followin g the introduction of a regular jeepney service in 1976an d the death of oneo f the three large contract buyers in Iloilo,a number of petty,village - based traders penetrated into the highly centralized market of dagmay allowing farm families to harvest thiscro p in very small quantities themselves during a prolonged harvesting period. Further,i t allowed a number of small farmers to start growing dagmay, albeit in very small quantities.

Percentageo ftota lric eare a(? )

1978 1979 1980 1981 Fig.4. 3 Mainric ecroppin gpattern sa spercentag eo ftota l riceare a(UISR :we tseede drice ;DSR :dr yseede drice )

In 1977,a newdevelopmen t in agriculture occurred when farmers started experimenting with dry seeding techniques of crop establishment with IR-varieties,als oa technique already in use with the BE-3 variety.Th emai n aim was to advance the harvesting date of the first rice crop to facilitate an earlier,an d less risky, second ricecro p planting in themor e drought-proneareas . Despite the risk attached todr y seeded rice crops and a dramatic failure of thesecrop s in 1979 (Chapter 7),th eare a planted to double rice cropswit h dry seeded rice as first crop gradually expanded (Figure4.3) .

The development of a potential labour demand peak,whic h started 68 to occur in the period of September-October when harvesting of the first crop of IR-rice, land preparation for the second rice crop, weeding for the BE-3, and harvesting of dagmay and upland mungbeans coincided, was prevented by the introduction of three mechanical rice threshers in 1979. They replaced the laborious foot threshing of rice common in this area and almost halved the labour requirement for the combined harvesting and threshing operation per hectare. The rapid adoption of mechanical threshing, almost 100% within three years, actually resulted in an overall, decline of labour use in rice production. Despite a large area of double rice crops in 1980, total labour use for rice crop production was 12% lower compared to 1978 (Table 4.3b). This reduction in total labour use came entirely at the expense of hired labour use. This declined by 23% during the same period for the combined first and second crop, whereas family labour use slightly increased (Table 4.4).

Table 4.4 Total household labour use for rice and other crop production (workdays)

1953 1) 1970 2) 1978 1980 Rice 3) Rice Rice Non-rice Total Rice Non-rice Total

Family labour 55 64 70 43 113 74 31 105 (35) 4) (44) (55) (88) (64) (62) (79) (66) Hired labour 126 81 58 6 64 45 8 53 (65) (56) (45) (12) (36) (38) (21) (34) Total 181 145 128 49 177 119 39 156 1) Figures based on 1953 survey data by Quintana (1954). 2) Based on farmers' estimates of percentage hired labour use by task for BE-3 crops. 3) For the years 1953 and 1970 no available data for non-rice crops. However, for 1953 labour use in non-rice crops must have been low. 4) Figures in parentheses are percentages of total labour use

Theabov echange sha dsom eprofoun deffect so nth eresourc e managementstrategie so fhouseholds .The yincreasingl y substituted familylabou rfo rhire d labour,whic hparticularl yaffecte dfemal e wagelabou rparticipation .I nth evirtua labsenc eo fa landles s labourclass ,i tmean ttha tinitiall yhousehold shire dles slabou r fromoutsid eth evillage ,an dtha tthe yincreasingl yhire deac h otherles sfrequently .Thi sresulte d ina genera ldeclin ei n incomesharin gbetwee nth esmalle ran dsomewha tlarge rfar m households.I tals omean ta deterioratio no fth eeconomi cpositio n ofwome n(Res ,1983) .Consequently ,durin gth epas tfe wyears ,i t becamemor edifficul tfo rbot hth esmal lgrou po flandles s householdsan dth elarge rgrou po fsmal lfar mhousehold st ome« t subsistencerequirements .

Theintroductio no f 'modern'ric ecro ptechnolog ydi dno t contributemuc ht oincreasin gemploymen topportunitie si n agriculture.I tappear stha t- i nspit eo fa widesprea dus eo fne w 69 riceproductio ntechnolog y-th evillag eeconom yi sreachin ga saturationpoin twit hrespec tt oth efurthe rabsorptio no frura l households.Th ene tvillag epopulatio ngrowt hi slevellin gof fan d thegrowt hrat ei nth enumbe ro fhousehold si sdeclining .Give n presentfar msize san dleve lo ftechnology ,ther ei sthu sa limited futurei nagricultur efo rmos tchildre ni nthi srainfe d area.I texplain sth esubstantia lsacrifice shousehold smak et o sendthei rchildre nt ohig hschoo lan duniversit y (Chapter6) . Accompanying thedeclin ei nfar msize sha sbee na proces so flan d useintensificatio ntha tha sincreasingl y becomedependen to n externalinput s(e.g .fertilizer san dpesticides )t osustai no r raiseproductivit y levels.I nthi sprocess ,th eoveral lleve lo f risktha trura lhousehold sar efacin gha sincreased .Smalle rfar m sizesimpl ya lowe rdegre eo fris kspreading ,an dcombine dwit ha strongerdependenc yo ncas hinput simpl ya highe rris ko f indebtedness.A sa nolde rfarme reloquentl ypu tit :'Before ,i fw e hada poo rproductio nw eha dles st oeat ,no ww eg oint odebt' .

Theabov ehistorica ldescriptio no fchange si nagricultur ean d socio-economiccondition si nth edecisio nmakin genvironmen tshow s thatth eassumptio no fa relativel ystati cpre-innovatio n environment,ofte nimplicitl yunderlyin gadoptio nstudie si s untenable.Eve rsinc eth eearl yresettlemen to fth evillag ea tth e beginningo fth e20t hcentury ,smal lan dprofoun dchange si nth e decisionmakin genvironmen to fhousehold scontinousl yoccurred . Householdsha dt oadjust ,wit hvariou sdegree so fsuccess ,t o disruptivean devolutionar y processesresultin gfro mchange s withinan doutsid eth evillag eeconomy .Als otoday' sfarm - householddecisio nmakin gi ngenera lan dris ktakin gbehaviou ri n particular shouldb eunderstoo d insuc ha dynami ccontext .I t shouldrefrai nresearcher sfro membarkin gto oeasil yo nsuc h argumentsa s 'risk-induced traditionalism't oexplai nfarmers ' adherencet oexistin gpractice so rnon-adoptio no frecommende d technology.Farm-household sar eb ynatur euse dt ouncertai n productioncircumstance san dusuall yhav ea histor yo fris ktakin g experiences.Th ecommonl ymad edistinctio nbetwee nso-calle d conservativetraditiona lan dmoder ndynami cfarmer si softe n senseless.Actua lsituation sar eusuall yfa rmor eflui di nth e sensetha to nindividua lfarm sbot hexistin gan dne weconomi c enterprisesar esimultaneousl y pursued.I nfact ,ol dpractice sma y becombine dwit hne wtechnologica lcomponent st ofor mtrul y adaptedan dviabl ene wagricultura lenterprise ssuc ha si sth e casewit hwe tan ddr yseedin go fne wIR-varieties .Pas tgovernment - initiated programmesaime da timprovin gagricultura lproductio n didno tsuppor tsuc ha nevolutionar yan dadaptiv eagricultura l developmentprocess .Becaus eo fa poo runderstandin go ffarmers ' managementpattern san da poo rdefinitio no f 'recommendation domains'(3) ,the yturne dou tt ob ea detrimen tt oagricultura l developmenti nthi srainfe darea .Th e 'improved'technolog y offeredan dcredi tpackage sattache dinduce dfarmer st oa n irresponsibleleve lo fris ktakin gresultin gi na sever edeb t position. 70

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00 •rl ft. THEFARM-HOUSEHOLD :RESOURCE SAN DOPPORTUNITIE S

Thechang eprocesse si nth evillag eeconom ya sdescribe di nth e previouschapte rar eth eresul to fdecision smad eb yindividua l householdsan dindividua lmember swithi nthes ehouseholds . Inasmucha sth eaggregat eeffec to findividua ldecision sshape s thedecisio nmakin genvironment ,i ti ntur ndetermine sth echoic e optionsan dconstraint so findividua lhouseholds .Th eai mo fthi s chapteri st oarriv ea ta classificatio no ffarm-household st ob e subsequentlyuse di nassessin gdifference sir imanagemen t strategiesamon ghousehol dcategories .Emphasi swil lb epu to nth e household'ssensitivit yt oincom erisks .A brie fintroductor y descriptiono fth estructur eo fth efarm-househol d systemi sgive n inth eremainde ro fthi ssection .I nSectio n5. 1 thetype so f resourcesa tth edisposa lo fhousehold sar ediscussed .Th erang e ofincom eearnin gopportunitie sthroug hwhic hthes eresource sca n bemad eproductiv ewil lb eanalyze di nSectio n5.2 .I nSectio n5. 3 farm-householdswil lb eclassifie d onth ebasi so ftw ohousehol d characteristics- surplu sproductio ncapacit yan dfamil ylif e cyclestag e- tha taccoun tfo rth ehousehold' sincom egeneratin g capacity inrelatio nt oessentia lsubsistenc eneeds .

Thefarm-househol d Forth eeconom yunde rstudy ,th eindividua lfarm-househol di sth e singlemos timportan tuni tthroug hwhic hdecisio nmakin g concerningproductio nan dconsumptio nactivitite si stakin gplace . FollowingSpijkers-Zwar t (1980),th ehousehol d isdefine da s'a n organized socialan deconomi cuni tth emember so fwhic hundertak e activities (eithercommunall yo rcomplementary )aime da tth e satisfactiono fmateria lneed so fth egrou pan dth ecreatio no f materialcondition st ofulfi limmateria lneeds' .Th egrou p comprisesal lperson stha tar edependen tupo nth euni tfo rdail y subsistence.Hence ,th ehousehol dma ydiffe rfro mth edomesti c groupa si tma yinclud edependen tchildre nstayin goutsid eth e village(e.g .childre nattendin g school).Unlik eth eextende d household structurefoun di nsemi-subsistenc eeconomie so fman y developingcountries ,household si nthi svillag ear etypica lo f thenuclea rtyp econsistin go fhusband ,wif ean dchildren , occasionallywit ha singl eremainin gparen to fth ehusban do r wife.

Theinterna lstructur eo fth efarm-househol d aswel la sit s (economic)relation swit hth eenvironmen tar edepicte d inFigur e 5.1.Th eindicate dcomponent stransfor minput sint ooutputs .Suc h transformationsma yb eth eresul to fcomple xproductio nprocesse s withincomponent sinvolvin gvariou sinput san dresultin gi n differenttype so foutpu tsuc ha sth ehom eproductio nsyste man d thefar msyste m(an dwithi nth efar msyste mi ndescendin gorder : thecro pan dlivestoc ksub-system ;th efiel dcro psystem ; individualcrops ;and"cro poperation san dinputs) .The yma yals o involvesimpl etranformation ssuc ha stransformin g familylabou r intowage sa tth elabou rmarke to rth emarketin go fproduct sfo r 72 cashincome .Th eline sconnectin gthes ecomponent srepresen t physicalan dmonetar yresourc eflows .Th eleft-han d sideshow sth e physicalresource sa tth edisposa lo fhouseholds .The yinclud e landan dwater ,famil ylabour ,curren tcas han dsee dinputs ,far m implements,machiner yan ddraugh tpower .Althoug hno tindicated , knowledgean dskill so fhousehol dmember sa swel la ssocia lan d politicalpositio nar econsidere d tob einclude di nth eresource s positiono fhouseholds .

Farm-household activities Resourcesar euse da sinput si nvariou sproductio nactivities .A . broaddistinctio nca nb emad ebetwee nactivitie stha tar edirectl y productivei nth esens etha tth eoutpu tca nb euse dfo row n consumptiono rsal ea tth emarke t (marketableoutput )an d activitiestha tca nb econsidere d indirectlyproductiv eo r reproductivei nth ebroa dsens etha tthe ymaintai nresource sa t existingproductiv elevel s(non-marketabl eoutput )and ,thus ,ar e supportivei nth egeneratio no fincome .Th emai ntyp eo f activitiesinclude d inthes etw ogroup sare :

A.Direc tproductiv eactivitie s .Self-employe d activities:the yinclud ebot hfar man dnon-far m activities.Far mactivitie sconsis to fcro pan dlivestoc k production,bu texclud efeedin go fworkin ganimals .Non-fari » activitiesinclud etrading ,baske tweaving ,ric emilling , etc; .Wag elabou ractivities :al lactivitie sfo rwhic heithe ra wagepaymen ti sreceive do rwhic hinvolv eproduc tsharing .

B.Indirec tproductiv eactivities : .Far masse tmaintenanc eactivities :the yinclud eactivitie s aimeda tmaintainin g theproductiv evalu eo fasset ssuc ha s thegrazin go fworkin ganimals ,maintainin glan dan dwate r resources(e.g .bun drepair ,fiel dlevelling ,cleanin go f irrigationan ddrainag editches) ,etc. ; .Hom eproductio nactivities :al lactivitie saime da t nourishinghousehol dmember san draisin gchildre nsuc ha s mealpreparation ,chil dcare ,laundr ycleaning ,etc. ; .Socia lactivitie scomprisin gactivitie saime da tre-enforcin g orimprovin gth ehousehold' spositio ni nth esocia lstructur e ofth evillage .

Activitiesinclude d inthes egroup sare ,t osom eextent , complementarywit hrespec tt odail ytim eexpenditure .Typ eB activitiesar ecarrie dou ta ttime so fth eda ywhe ntyp eA activitiescanno tb eundertaken ,e.g .earl ymorning ,noon , evening.I nth econventiona leconomi canalysis ,i ti scommo nt o disregard typeB activitie saltogethe rassumin gtha tther ei sn o conflictwhatsoeve rbetwee nth etw ogroup so factivities .However , indeterminin gfamil ylabou ravailabilit y fortyp eA activities , 73 theparticipatio no frelativel yyoun gchildre ni ntyp eB activitiesi simportan t (Section5.1.2) .Thes echildre nusuall y takeove ra numbe ro ftim econsumin ghousehol dchore sfro madults , thusfreein g theirtim efo rparticipatio ni ntyp eA activities . Becauseo fth elac ko fsuc hlabour ,adult so fyoun ghousehold s necessarily havet ospen da relativel ylarg epar to fthei rtim eo n typeB activities .Hence ,i ndeterminin gfamil ylabou r availability,leisur epreferences ,an dth edegre eo ffamil ylabou r exploitation,th etim eneede dfo rindirec tproductiv eactivitie s shouldb eexplicitl yaccounte dfor .

Apartfro mdecision sconcernin g theallocatio no ffamil y controlled resources(land ,labour ,capital )t oth eabov eactivit y fields,othe rmajo reconomi cdecisio nmakin garea so fth e household includeacquisitio no fnon-househol dmean so fproductio n sucha shire dlabour ,credit ,etc .a swel la sth edispositio no f incomet oconsumption ,savings ,an dinvestments.^arm-household s 6— inth ecommunit ystudie dar eno tfull yself-containe d inth esens e thatthe yproduc eal lth enecessitie srequire dfo rth eeconomi c survivalo fth eunit .Dependin go nlan dan dlabou rresources , householdsare ,t ovariou sdegrees ,dependen to nmarkets ,amon g otherst oemplo ythei rlabou rfo rwages ,marke tthei rproduce , purchaseso fconsume ritems ,healt hservices ,far minputs ,etc .T o someexten thousehold sar eforce dt ogenerate(cashythroug hmarke t participation.Fo rexample ,th eculturall ydetermine dstandar do f & livingprescribe smedicatio no rhospitalizatio no fhousehol d membersi ncas esuc hi snecessary ,als oa tth ecos to fheav y borrowing.O nth eothe rhand ,dependin gupo nthei rlan dresources , householdsstil lproduc ea larg eportio no fthei rdietar yneed s throughself-employe d productionactivities .Th especifi c charactero fsuc hsemi-subsistenc e (orsemi-commercial )farm - householdscompare d towestern-typ ecommercia lfarm-enterprise s stemsfro mth efac ttha tproductio nan dconsumptio ndecision sar e highlyinterwove n (Chapter3 an d4) .

Divisiono ftask s Iti sgenerall ydifficul tt odetermin ewh oactuall ydominate sth e decisionmakin gi nth eabov eactivit y fields.Day-to-da y managemento factivitie san dassociate d routinedecisio nmakin gi s usuallyth eresponsibilit y ofindividua lhousehol dmember s carryingou tthos eactivities .Thus ,routin edecision sclosel y followth edivisio no ftask si nth ehousehold .Me nar eresponsibl e forfar masse tmaintenanc eactivitie san dric ecro pproductio nan d cropstha tar egrow ni na patter nwit hric eo nric efields .Apar t fromhom eproductio nactivities ,wome nar emainl yactiv ei n vegetableproductio nan dpi graising ,an dparticipat ei nric e productionactivitie swit hweedin gan dtransplantin ga sdominan t activities.Wag elabou ractivitie sar ecarrie dou tb yme nan d women.Non-agricultura lactivities ,suc ha scarpentry ,baske t weaving,an dcattl etradin gar etypicall ymal eactivities ,wherea s vegetablemarketing ,makin gan dsellin go fdelicacie sar e typically femaleactivities .Although ,generall ya clea rdivisio n oftask sexists ,suc hdivisio ni sno tentirel yrigid .I f 74 necessary,wome n participate in the ploughing of fields and men will do the cooking when women aremarketin g products or do the laundry when women have just delivered a child. Amor e detailedj discussion of time allocation of household memberswil l be given in Section 6.1.1.

The division of decision making tasks is lessarticulate d in the area of planning and strategic decisions.Although , it is | generally accepted (and as such itappear s to the outside observer)tha t planning ricecro p production activities is the domain of the husband,wome n and even children can exercise enough pressure tohav e at least a strong say in strategic farm decisions.Wit h respect to financial management decisions,wome n have at least the same influence asmen .O f course,wh o actually, makes decisionswil l also depend on the character of the persons involved.

5.1 Farm-household resources 5.1.1 Land and water The total land area owned and/or cultivated by villagers is estimated at 1,46ha ,divide d into 10%woodland , 13%uplan d and the remainder rice lowland (bunded fields that allow ponding of j water). Size distribution of all farms in the village in termsO f operational holding is given inFigur e 5.1.1. About half of thej farm holdings are from 1t o 2ha , 17%betwee n 2 to 3ha ,whereas ! 22% issmalle r than 1ha .A small group of farmers (9%)ha s landholdings larger than 3.5 ha (1).Al l sample householdsoperajt e farm holdings below 3 ha,wit h 48%betwee n 1t o 2 ha,24 %belo w1 ha, and 28%abov e 2ha .Th e average landholding size of these

Percentagehousehold s

20 samplefarm-household s

10

Percentagehousehold s

Fig.5.1. 1 Distributiono ffar msize s(ha ) TT"

75 householdsi s1.5 4h ao fwhic h84 %i sric elowlan do naverage . Farmsar eusuall ycompose do fa numbe ro ffield slocate da t variousposition si nth elandscap ewit hdifferen twate rmanagemen t classes.Als olan dtenur econdition sdiffe rbetwee na swel la s withinfarms .

Landqualit y Duet oth etopograph yo fth earea ,difference si nlan dqualit yar e considerable.Variou slandscap eposition sca nb edistinguishe do n thebasi so fthei rgeomorphi clocation ,i.e. ,thei rrelativ e positioni nth elandscap eo rtoposequenc ean dthei rrelativ e proximity tosupplementar y sourceso fwater .Followin gth e toposequenceo fth eare afro mhig ht olo wpositions ,a distinctio n wasmad ebetwee nseve nlandscap eposition s(Figur e5.1.2) .Thi s classificationroughl yfollow sth eclassificatio nmad eb yfarmers . .Hig hhil lsummit s(bacolod) :thes ear ehil lsummit so nth e highestpar to fth etoposequence .The yhav ecoars etexture d soilstha tca nb eclassifie da ssand yloa m(baras-baras) . Cultivationo fcrop so nthes efield soccurre d onlyrecentl y andi slimite d toa numbe ro fuplan dcrop sdurin gth ewe t season (tomatoes,mung ,cowpea) .Acces st othes efield si s difficultan dcrop sar eexpose dt ohig hwinds . .Stee phill-side s (bakili):thes ear eth estee phil lslope s locateddirectl ybelo wth ebacolo darea shavin gth esam esoi l type.The yar ever ypron et oerosio nan dnormall ythe yar e notcontinousl ycultivated .Vegetatio nmainl yconsist so f trees,shrubs ,an dbambo ointersperse d withgrasses .Banana s andcoconut sar eusuall yfoun da tth efoo to fthes ehill ­ sides.Further ,o ncleare d portions,tomatoe sar egrow n duringth ewe tseason . .Knoll s (banglid):field si nthi slandscap epositio nar e locatedeithe ro nth egentl yslopin gfoo tportio no fth e hillso ro nth ehighes tportio no fth erelativel ylo whil l ridgeswhic hpenetrat eth eplai narea .The yhav eyellowish , siltycla ysoil s(buga-buga )whic hbecom emor eclaye ya sth e knolli sfurthe rlocate d towardsth eplai narea .Sinc ethe y areno tbunded ,the yd ono taccumulat ewate ran ddrai n easily.Crop ssuc ha scor nan dtar o(dagmay )ca nb e successfullyplante ddurin gth eearl yrain sfollowe db ymun g orsquash .Wit hfavourabl erainfall ,a secon dplantin go f corni nNovembe ri spossible . .Sideslope s (bantod):the yar eth ehighes tterrace dan dbunde d fieldsi nth elandscap ean dar efoun ddirectl y belowth e knollareas .Field sar enarro wwit hthei rlonge rside s perpendicular toth eslop ean dwit ha substantia lvertica l dropbetwee nadjacen tfields .Soil sca nb egenerall y classified assilt yclay .Bund sar elo wt ofacilitat e drainage.Wate rca nb eaccumulate d afterheav yrainfal lbu t onlyfo rshor tperiod s( 2t o3 days) .Bot huplan dan dric e cropsca nb egrow no nthes efields ,wit hric ecrop slimite d toloca ldrough tresistan tvarieties . 76

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oo 77 .Platea ufield s(pata ghagdan-hagdan) :thes efield sar e transcientbetwee nsideslop ean dplai nareas .Th esoi ltyp e isheavie r (56%t o64 %clay )compare d toth esideslop earea s andth ewate rretentio ncapacit y ishighe r (1t o2 weeks) . Compared toth eplai nareas ,the yhav ea lowe rwate rtabl e andther ei sstil la considerabl evertica ldro pbetwee n fieldswhic hfacilitate sgoo ddrainage .Crop scultivate do n thesefield sconsis to fcor nfollowe d byric efollowe d bya n uplandcro p(e.g. ,mun go rsquash) .Mor erecently ,farmer s started togro wtw osequentia lric ecrop semployin gdr y seedingestablishmen t techniquesfo rth efirs tric ecrop . .Plai n (patag):plai narea sar elocate do nth elowe rpar to f thelandscap ean dhav ever yfin ecla ysoil s(62 %t o75 % clay),locall yknow na snono-o .Th ewate rtabl ei sclose rt o thesurfac ean drecede sles srapidl ywit hth eonse to fth e dryseason .Field squickl yaccumulat ewate rbu tar edifficul t todrain .A smal lelevate dportio no fth eplai nare aha sa distinctlighte rsoi ltyp etha ti slocall yknow na shinis - hinis(silt ycla y loam).Unde rfavourabl erainfal l conditions,tw owe tseede do rtransplante d ricecrop sca nb e successfully grown.Hand-du gwell sca nprovid esufficien t watert oirrigat esmal larea so fuplan dcrop si nth edr y season. .Bottomlan d (danawo rlungasod) :the yar eth elowes tfield si n thetoposequence .Durin gth ewe tseaso nsufficien tdept ho f floodingma yoccu rt orestric tth eus eo fshor tstature d varieties.Soil sar ever yheav ycontainin gu pt o87 %clay . Accumulatedwate rca nb eretaine d forperiod so fove ron e month.

Watermanagemen t Thefloodin gregim eo fric eland si nth evillag ei scharacteristi c of 'Regime2 'a sdescribe db yMoorman nan dva nBreme n (1978): 'shallow,irregula ran dprolonge d floodingi nbot hpluvial - anthraquican di nphreatic-anthraqui cric eland si narea so f higherrainfall' .Rainfal li sponde di nbunde dric efield san d stayso nth elan dfo rlonge rperiods ,althoug hintermitten t droughtperiod sma yoccur .I nadditio nt orainwater ,field s receivewate rb yoverflo wfro mhighe rfield sdurin gan dafte r heavyrainfall .

Wateravailabilit y inric efield san dth epossibilit yt oregulat e waterlevel sdepen do na considerabl enumbe ro ffactors .Amon gth e mostimportan tar eth elocatio no fth efiel di nth etoposequenc e ofth earea ,it selevatio nrelativ et osurroundin g fields,th e additionalsuppl yo fwater ,th esoi ltyp ean dstructure ,levellin g ofth efield ,height/widt han dconditio no fth ebund ssurroundin g thefield ,an dth elevellin gconditio no fth efield .Field so nth e highestpar to fth etoposequenc ehav eth ewors tprovisio no f water.Eve nwit hsufficien trainfal ldurin gth egrowin gseason , thesefield sd ono thol dwate rlon gbecaus eo fhig hsoi l permeabilityan da dee pwate rtable .Th evertica ldro pbetwee n 78 adjacentfield si ssubstantia lcausin ghig hseepag erate swhereai s bundsar elo wt opreven tth eburstin go fbund san derosio no f fields.Th elowe rpadd yfield si nth etoposequenc eusuall yhav ej a betterprovisio no fwate rtha nth ehighe rpositione d fields.Poo r drainageo flowe rfields ,however ,ma ycaus eexcessiv ewate r accumulationan dfloodin gfo rsustaine d periods.Wate rcontro li s besti nthos efield stha tar eclos et owaterways ,bu tallo wth e1 diversiono fwate rflow st oothe rfields .However ,stron gwate r> currentsi nwaterwa y fieldsma ycaus eseriou sdamag et ocrops .

Basedo nth ehydrolog yo fth earea ,a furthe rdistinctio nca nb e madebetwee nthre ewate rmanagemen tclasses : .Rainfe d fields:field stha td ono thav ean ysupplementa l sourceo fwate reithe rthroug hwaterflow so rsprings ,i.e. * forwate raccumulatio nthe ydepen dentirel yo nrainfall . i .Waterwa yfields :the ybelon gt otrack so ffield swit ha relativelo wpositio ncompare d toadjacen tfield sfunctionin g asdrainag eways .Supplementa lwate ri sprovide ddurin ga parto fth e5 t o7 mont hrai nperiod . .Partiall yirrigate d fields:thes efield shav esupplementa l irrigationthroug hspring sbeyon dth e5 t o7 mont hrai n period.

Onth ebasi so fth evariou scombination so flandscap epositio nan d watermanagemen tclass ,1 2differen tlan dtype scoul db e distinguished inth earea .T oavoi dto osmal lsub-classe san dt o facilitatedat aanalysis ,i twa sdecide d togrou pth eorigina l classesint o7 majo rlan dunits : a.upland :compose do fknoll san dsom ever ysmal larea so fhill - summitsan dhill-sides ; b. sideslope:includin gbot hrainfe dan dwaterwa y fields;th e areaunde rwaterwa ysideslope si ssmall ,wherea swate r availabilty isno tmuc hbette rfo rth ewaterwa yfield sdu e theirlo wbun dheigh tan dhig hseepag ean dpercolatio n losses; c.platea urainfed ; d.plai nrainfed :includin grainfe d plainfield san da smal l areao fbottomland ;bot hlan dtype sar ever ysimila r (inthi s particularlocation )i nwate rretentio ncapacit yan dsoi l type; e. plainwaterway ; f.platea uwaterway ; g.irrigated :includin gbot hpartiall y irrigated landtypes .

Figure5.1. 3 showswha torigina lclasse sar ecombine dint oon e landuni ta swel la sth eare ao feac hlan duni ta spercentag eo f thetota lare acultivate d byth esampl ehouseholds .O fth etota l areacultivate d bysampl ehouseholds ,84 %i slowlan do fwhic h10 % ispartiall yirrigated .Th eremainde ri sequall ydivide dint o rainfedan dwaterwa yfields .Th emai nlandscap epositio ni nth e lowlandare ai splai n (45%), followed byplatea ufield s (28%).A 79 Landscapepositio n

y <& v6® A* ->y &

Watermanagmen t class rainfed

waterway

partially irrigated

Fig. 5.1.3 Monitored area by landscape position and mater management class; percentages of total area quantitative assessment of the economic productivity differences between these land units will be made in Section 5.3.1. Land tenure Around90 %o fth elan dcultivate d bysampl ehousehold si s tenanted.Fixe dren t(leasehold )contract s(arkilado )occup yabou t two-thirdso fthi sarea ,wherea sth eremainin gare ai sshar e tenanted.Th enumbe ro fcontract sunde rshar ean dfixe dren t arrangementsi sabou tequal ,indicatin gtha tlan dare ape rshar e contracti so naverag ehal ftha to ffixe dren tcontracts .Lan d undershar etenanc yi smainl yowne db yvillag eresident san dsmal l landlordsi nth enearb ytown .Shar econtract sar emainl yo fth e 'one-third/two-thirds1 type(tresa) :afte rdeductin gth eharves t share(one-sixt ho fth egros sproduction )an dsometime shaulin g costs,th elandlor dreceive sone-thir d ofth eremainin g production.Fifty-fift yshar econtract s(agsa )occu rbu tar eno t common.Unde rthi sarrangemen tth elandlor dusuall ypay shal fo f allth ecro pexpenses .Fo rtw oparcels ,th eol d 'two-fifths/three- fifths'shar earrangemen t(quinta )- commo nbefor eth elan drefor m - stillpersists .

Atenan tnormall yconsider sth elan dh etill sa shi s'own' , especially ifth ehousehol do rth eparent shav ebee ncultivatin g itfo ra lon gtime .I nfact ,th etenant' schildre nclai mth erigh t ofsuccessio nt oth etenanc yshoul dth efathe rsto pfarming . Usually,landowner si nth eare acompl ywit hthi scustomar yrule . Hence,acquisitio no ftenante d landi smainl y throughrelatives . Ofth etota lnumbe ro ftenur econtracts ,hal fwa sobtaine dthroug h firstdegre erelative s(parents ,brother so rsisters )o fwhic h three-quartersthroug hinterna ltransfer .Fo ronl ynin epercen to f thecontract sn okinshi prelatio nbetwee nth epreviou stenan tan d thehousehol dwh oacquire dth elan dcoul db etraced . 80 Fixedlan drent svar yfro m$41-$5 0pe rhectar efo rupland ,$81-$9 4 forrainfe d lowland,u pt o$12 5i npala yfo rpartiall yirrigate d land.Afte rth eintroductio no fdoubl eric ecropping ,lan dren t levelsfo rarea stha tallowe d suchcroppin gpatter nwer eeithe r adjustedupward so ra combinatio no ffixe dren t(firs tcrop )an d shareren t(secon dcrop )wer eestablished .Despit eth enon-ris k sharingnatur eo ffixe drenta larrangements ,a numbe ro ffarmer s favourfixe dren tcontract sove rshar eren tarrangements .First , athighe rinpu tlevels ,i nmos tyear sthi scontrac ti smor e profitabletha nshar econtracts .Fo rth ecro pseaso no f1978-79 , whichaccordin gt ofarmer swa sa norma lproductio nseason ,th e fixedren tlevel sfo rth euplan dan dlowlan d fieldswere ,o n average,abou t 18%an d22% ,respectively ,o fth egros sproductio n minusth eharvestin gcos tcompare dt oth eeffectiv e28 %sharin go f sharecontracts .Second ,farmer sprefe rno tt oshar ewit hth e landlordi nth esometime sver yprofitabl ebu tlabou rintensiv edry - seasoncrop s(e.g .squash ,tomatoes) .Third ,farmer sprefe rno tt o bebothere d byth epaternalisti cattentio no flandlord si nthei t cropchoic edecision san ddurin gth esharin go fth eric eharvest .

Formos thouseholds ,th eonl ywa yt oacquir elan di nownershi pi s throughinheritanc e (panubli).Hence ,i ti sno tsurprisin gtha t ownedlan do fvillag eresident sha sbecom ehighl yfragmente d(2) . Mosto fth elan downe db yvillag ehousehold suse d forcro p productioni sconcentrate d inth eknol lpositio nwit honl y 13%i n theplatea uo rplai narea .Thi sconcentratio no fowne dlan dhel d byvillager si nth elo wproductiv euplan darea san dth efo rric e cultivationmargina lsideslop efield si slikel yth eresul to fa ; selectivelan dgrabbin gproces sb ytow npeopl ethroug hforfeitur e ofmortgage d landb yvillag eresident stha toccurre d fromth e SecondWorl dWa ronwards .

Ownershipright so flan dar eusuall ycarefull yguarde d byth e family.I ncas eon eo fth emember so fa famil ywant st osel lo r mortgage(prenda )a piec eo flan d (i.e.,want st oalienat ei tfro m thefamil ypropert ypoo lo rrun sth eris ko falienatin git )h ei s required toconsul twit hal lhi sbrother san dsister swh ohav et o agreewit hi tan dhav efirs toptio no fbuyin go rmortgagin git . If,afte rth econtrac tperio dth emortgage efail st opa yth e borrowedamount ,th efamil ymember sar eagai nth efirs tt ofurnis h theamount ,i nsom ecase sb ytakin gturns .N oconsultatio nwit h thefamil yi srequire di fth eparent so fa nindividua lhousehol d decidet otransfe rthei rus erigh tt oa piec eo flan dt oon eo f theirchildren .I nsuc hcase ,th ehea do fth ehousehol dremains , thelega lowne ran dchildre nar eno tallowe d tosel lo rmortgage . Generally,parent sals omaintai nan dexcercis eauthorit yove r inheritedus erights .The yar eallowe dt otak ethe mbac kan dthi s threati softe nuse da sa mean so fsocia lcontro love rchildren .

Ownershipright sar etransferre d tochildre nafte rth edeat ho f theparents .Divisio no flan downershi prequire sa famil y gatheringan dth eactua lallocatio no flan di scarrie dou ti nth e presenceo fa fe wbarrio-counci lmen .Inheritanc efollow sa 81 abilatera lsyste man dstric tequa lallocatio no flan dt oth e heirso fa give nestat ewit hrespec tt obot hth esiz eo fth eare a and- a smuc ha sa spossibl e- th elan dquality .Thi softe n impliesdivisio no fpropert y parallelt oth eslop eo fa fiel d whichresult si nextremel ysmall-size d fields.I ncas elan d remainsundivided ,heir sma ydecid et otak eturn si ncultivatin g it(bolos-bolos) .I tals ooccur stha tonl yon eo fth eheir s obtainsth erigh tt ocultivat eth eland ,i nwhic hcas elan dren t ispai dt obrother san dsisters .Individua lpropert ybrough ti nb y eithero fth espouse si nmarriag elegall ybelong st oeithe ro f them,bu ti nactua lpractice ,th ehusban dha susuall yth efina l sayregardin gth eus eo fth ewife' sproperty .

Acquisitiono flan dthroug hmortgag ei sno tcommo namon g villagers.Mortgag ea spractise d inthi sarea ,i sessentiall ya specialtyp eo fsale ,wit hth erigh tt ore-purchase .Th erigh tt o cultivateth elan dan dth edisposa lo fth eproduc ear elocall y considered tob esufficien tfo rpaymen to fth eannua linteres to f theprincipa lsu mborrowed .I nth eeven tth emortgage efail st o payth eamoun tborrowed ,th emortgage rha sth erigh tt otak eove r thepossessio no fth elan dwhic hi sknow na srimat a(forfeitur ei n mortgage).

Fromth eabov ei twil lb eclea rtha tth elan dmarke ti nth e villagei shighl yrestrictive .Acces st olan di sgoverne db y strongpersonalisti ctie sbetwee nlandowner san dtenan tfamilies . Iti svirtuall yimpossibl et oobtai ntenante d landothe rtha nth e land"alread yfarme db yothe rfamil ymembers .Unlik eothe rarea si n thePhilippine s (e.g.Hayami , 1978),sub-rentin g oftenante dlan d isa ver yrar ephenomeno ni nthi svillage .Further ,lan di srarel y offered forsal ei na fre emarke tsituatio nan di nsuc hcas e almostnon eo fth ehousehold sca naffor d landpurchase s(3) .

5.1.2 Familylabou rresource san dwag elabou ravailabilit y Apartfro mdraugh tanimals ,manua llabou ri sth emai nsourc eo f poweri nth eproductio nsystem .Th eleve lo fmechanizatio ni n agriculturalan dnon-agricultura lactivitie si slow .Th eus eo f tractorsi salmos tnon-existent .Sinc e1979 ,machin epowe rha s beenimportan ti nric ethreshin gand ,mor erecently ,mechanica l blowersar euse dfo rric ewinnowing .

Sourceso favailabl elabou ri nth evillag ear ecompose do flabou r suppliedb yth ehousehol ditself ,labou rhire dfro mothe rfar m householdsan da fe wlandles shouseholds ,an dlabou rhire dfro m neighbouringvillage san dth enearb ytown .Th econtributio no f labourfro moutsid eth evillag ei srelativel ymino ran dmainl y employed inric eharvesting .T osom eextent ,non-residen tlabou r isals ouse di nfield stha tar ea tsom edistanc efro mth evillag e andofte nneare rt oneighbourin gvillages .

Familylabou rresource s Familylabou ravailabilit yi sa notoriousl ydifficul tconcep tt o 82 use.Problem stha taris ei nestablishin ga measur eo ffamil y labouravailabilit yar econcerne dwith : a.determinin gwha ttyp eo factivitie sshoul db einclude di nth e labourprocess ; b.assessin gth erat eo f.participatio no fth evariou shousehol d membersi nthes eactivities ;

d.evaluatin g possible_social_resj-rj.c-tionst oth eus eo fcertai n typeso flabou ri ncertai nactivities .

(a)I ndeterminin glabou ravailabilit y itha sbee ncommo npractic e toloo konl ya tlabou rrequire d forproductio nactivitie san dt o excludefro mth eanalysi slabou rrequire d fortask soutsid eth e sphereo fincom eearning .However ,a sdiscusse di nth e introductory sectiono fthi schapter ,i ncorrectl yspecifyin g labouravailabilit y forproductio nactivitie sampl etim eshould !b e allowed foractivitie stha tar enecessar yt osuppor tth ehousehol d asa productio nunit .The yinclud eth eearlie rmentione dhom e productionactivitie st oreproduc eth ehousehol da sa labou runit ; farmasse tmaintenanc eactivitie s- suc ha sgrazin gth eworkin g animal- t oreproduc eth efar ma sa productio nunit ;an dsocia l activitiest osecur eth ehousehold' spositio ni nth esocia l system.Excep tfo rsocia lactivities ,i nth eshort-run ,th elabou r required forthes eactivitie sinvolve sa mor eo rles sfixe ddail y timeexpenditur ewhic hca nb etreate da sa noverhea dcos ti nth e operationo fth efarm-household .

Therelativ eimportanc eo fthes ereproductiv eactivitie si nth e totaltim eexpenditur eo fth ehousehol dwil ldepen do nth elif e cyclestag eo fth ehousehol d (Section6.1 )a si tdetermine sth e freedomo fmovemen to fwome nan dth epotentia lparticipatio no f childreni nth elabou rprocess .Wive so fth eyoun ghousehold swil l oftendevot ea substantia lportio no fthei rtim ecarin gfo r childrenan dwil lgenerall yb eles savailabl efo rnon-househol d activitiesdu et oth ehighe rrat eo fpregnancies .Likewise , husbandso fthes ehousehold swil lals ob emor einvolve d inhom e productionactivitie san dgrazin gth eworkin ganima lbecaus eolde r childrenar eno tye tpresent .I nth emiddle-age d lifecycl estage , wivesan dhusband sar efree dfro ma numbe ro fhousehol dchore s whichar etake ncar eo fb yth echildren ,wherea ssom echildre n willals ob eavailabl epart-tim efo rothe ractivities .I nth elas t lifecycl estage ,almos tn otim ewil lb espen to nchild-care .

Hence,i nvie wo fth epossibl einfluenc eo fth elif ecycl eo n adultlabou ravailability ,instea do fassumin gtha tthes e activitiesar eimplicitl y takencar eo fb ycertai nmember so fth e household (e.g.husban dan dwife) ,the yshoul db eexplicitl y includeda spar to fth elabou rprocess .Furthe rthes eactivitie s shouldno tb etreate da snon-productiv ea sthe yar eessentia lt o thesurviva lo fth ehousehol dunit .The yshoul drathe rb e 83 consideredindirectl yproductiv egive nth estron gcomplementarit y withincome-earnin gactivities .

(b)Th erat eo fparticipatio no fhousehol dmember swil ldepen do n theag elimi ta twhic hhousehol dmember sca nb eexpecte dt o contriFutet olabou ractivities .O fcourse ,thi squestio nclosel y relatest oth eabov eissu eabou tth etyp eo factivitie stha tar e included inth elabou rprocess .Withi nth econtex to fth eabov e broaddefinitio no flabou ractivities ,th eag elimi tuse di nthi s studywa sse ta t1 0years .Mal echildre nabov eth eag eo f1 0ar e ablet otak ecar eo fgrazin gth eworkin ganima lan dcarr you t varioushom ean dfar mproductio nactivitie ssuc ha stransplantin g andweeding .Mal echildre nabov eth eag eo f1 4ca nb econsidere d fullparticipant si nal lfar mactivities ,includin glan d preparation.Similarly ,femal echildre nabov eth eag eo f1 0carr y outvariou shom ean dfar mproductio nactivities .Th e1 0yea rag e limitdoe sno timpl ytha tyounge rchildre nd ono tcontribut e labourt oth ehousehold .I nfac tthes echildre nar eofte n responsiblefo rth eprovisio no fwate rt oth ehousehol dan d8 yea r oldboy ssometime shel pi ngrazin gth eworkin ganimal .However , theircontributio nt otota lhousehol dlabou rus ei slimited .

(c)Th ethir dproble mconcern sth eexten tt owhic hdifferen ttype s oflabou r (sexan dage )ca nsubstitut efo reac hother ,i.e. , whetheradul tan dchild ,o rmal ean dfemal eworkin ghour sar e equivalentan dca nb esumme du pint oon emeasur eo flabou r availability.Base do ndifference si nskill san dphysica l strength";i ti scommo ni nlabou rstudie st oassig ndifferen t productivity coefficientst oth evariou stype so flabour ,e.g. , onecHT3~TioTIr -Tsequivalen tt o0. 5adul thour .Obviously ,suc h coefficientsar eofte narbitrar yan dessentiall yd ono tsolv eth e problemo fth enon-substitutabilit yo fdifferen ttype so flabour . Inthi sstud yw etak eth epositio ntha t- withi nth econtex to f assessingtota lfamil ylabou ravailabilit y- a distinctio nbetwee n differenttype so flabou rhour sbase do nage/se xdifference si st o alarg eexten tmeaningless .Althoug htask san dlabou r productivitiesma ydiffe rbetwee nindividua lhousehol dmember san d strictsubstitutabilit y oftype so flabou rma yno talway sb e possible,th estron gcomplementarit y ofth evariou shousehol d activitiesrender sassessmen to findividua llabou rproductivitie s impossible.Fo rinstance ,i nric ecro pproductio ntask ssuc ha s weeding,althoug hgenerall yconsidere d tob elo wproductive ,hav e tob ecarrie dou tt osustai nth eoveral lric eproductio nactivity . Similarly,grazin gth eworkin ganima lma yb econsidere da low - productivetas kcarrie dou tb yschoo lboys ,bu tsuc hlabou ri sa prerequisitefo rattainin ghig hlabou rproductivit y ofmal e adultsi nlan dpreparation .Sinc etim eallocate dt othes e activitiescome sou to fth ecommo nfamil ylabou rpool , participationo fchildre ni nthes e 'lowproductive 'activitie s allowsadult st oemplo ythei rlabou ri na mor eproductiv emanner . Further,i ncertai ntask schildre nar ea scompeten ta sadult san d receivesimila rwage so nth elabou rmarket .Also ,n odistinctio n ismad ebetwee nadul tmal ean dfemal elabour .Again ,althoug h 84 therear etypicall ymal ean dfemal eactivitie s(e.g .lan d preparationi sa typicall ymal eactivit yan dweedin gi softe ndon e bywomen) ,i fnecessar ybot htype so flabou rar elargel y interchangeable.

(d)Th eexten tt owhic hsocia lnorm sar erestrictiv et oth eus ejo f certaintype so flabou ri nparticula ractivitie si so fmino r , importancei nthi svillage .

Basedo nth eabov econsiderations ,i nassessin gth etota l householdlabou rresource sneithe rdistinctio ni smad ebetwee n malean dfemal elabour ,no rbetwee nlabou ro fadult san dchildre n aboveth eag eo f10 .Th ecalculatio no fth efamil ylabou rforce ' (aboveth etim erequire d forsocia lactivities) ,i sbase do nth e followingassumptions : .O naverage ,bot hmal ean dfemal efull-tim eparticipant sar e considered tob epotentiall yavailabl efo r1 0hour sdail yfo r 6 dayspe rweek ; .Elementar yschoo lchildre nabov eth eag eo f 10an dhig h schoolattendant sar eassume d tob eb eavailabl e2 hour s dailyan dfull-tim eavailabl edurin gschoo lholidays ; .Non-workin gcolleg estudent sar efull-tim eavailabl edurin g schoolholidays .

Giventhes eassumptions ,th etota lfamil ylabou rforc ewil ldepen d on: thesiz eo fth ehousehold ;th eag ecompositio no fth e , houshold;th eschoolin grat eo fchildren ;an dth ehealt han d nutritionalstatu so fth ehousehol dmembers .

Theaverag etota lfamil ylabou rforc efo rth esampl ehousehold s expressedi nterm so fworkda yequivalent so f1 0hour si s87 8days , ofwhic hchildre ncontribut e36% ,an dth eremainde ri sequall y dividedamon ghusband san dwives .Tabl e5.1. 1 showsth eeffec to f thelif ecycl estag eo nfamil ylabou rresources .Th eyoun glif e cyclehousehold shav ea labou rforc ewhic hi sabou t60 %o fth e middle-agedhouseholds ,wherea sth elabou rforc eo fth eol d householdcategor yi sabou tsimila rt oth emiddle-age dhouseholds . Theeffec to fth efixe ddail ylabou rrequirement sfo rhom e productionan dcaraba ograzin go nfamil ylabou ravailabilit yfo r

Table 5.1.1 Family labour availability bylif e cycle group, 1979-80 (hours '000)

Life House Childrenabov e1 0year s Labouravai l Farm Layout cycle -hold Non-school Schooling Household labourforc e abovefixe d size avail stage size Male Female Male Female Husband Wife Child Total dailyus e1 ) (ha) peih a

1 5.2 0.30 2.88 2.88 0.65 5.41 2.87 1.28 2.09 2 7.6 0.82 0.46 1.27 1.27 2.74 2.62 5.47 10.83 6.76 1.55 4.36 3 5.0 1.00 0.75 0.50 0.25 2.88 2.88 4.08 9.84 5.13 2.18 2k3 5

Wean 6.2 0.52 0.32 1.05 0.60 2.82 2.77 3.19 8.78 4.86 1.54 3.16 1)Fixe d daily labour requirementsinclud e thetim e spendo nhom eproductio nan dgrazin g the working animal.Base do nactua ldat acro p seasono f1979-8 0an d1980-81 . 85

Weekly labourus e(blac k areasrepresen t theus eo fhire d labour)

(hrs)

Household labour availability 200

100

APR JUN AUG OCT DEC FEB Month Fig.5.1. 4 Weekly labour utilizationo fhousehold san dfamil y labour availability; averagesfo rsampl e households (1979-81) ottiejractivitie sbecome sapparen twhe nthe yar esubtracte dfro m thetota llabou rforce .Th elabou ravailabilit y fordirec t productiveactivitie so fth eyoun ghousehold sdecline sfro m60 %t o only40 %o fth emiddle-age dhouseholds .Labou ravailabilit ype r hectareo fth emiddle-age dhousehold si smor etha ntwic ea shig h astha to fth eyoun ghouseholds ,an droughl y85 %highe rtha ntha t ofth eolde rhouseholds .

Duet oth epart-tim eparticipatio no fschoo lchildre nan d students,famil ylabou ravailabilit y fluctuatesseasonall ywit h peaksdurin gth esumme rholida y (April-May)an dth elas ttw oweek s ofDecember .A si sshow ni nFigur e5.1.4 ,th esumme rholida y coincideswit ha slac kperio di nlabou rutilization . Thesam efigur eshow stha tweekl ytota lfamil ylabou rus ei s alwaysbelo wth ecalculate dweekl ylabou ravailability ,als o duringpea klabou rdeman dperiods .A swil lb eindicate dlater , thisi sprimaril ydu et oa lowe rparticipatio no fchildre na s indicated bythei rlabou ravailability .

Wagelabou ravailabilit y Duringpea kdeman d periods,famil ylabou ri ssupplemente dwit h wagelabou rhire dfro mwithi nan doutsid eth evillage .Give nth e limitednumbe ro flandles shouseholds ,th emai nsourc eo fnon - familylabou ruse di nagricultura lproductio ni sfro mothe rfarm - households-withi nth evillage .Thes ear eusuall yhousehold s cultivating relativelysmal lfar marea swit ha nexces so ffamil y labour.The yrequir eth eextr aearning sfro mwag elabou r activitiest oaugmen tthei rincom ederive d fromthei row nfarm . Thevillag elabou rforc ei soccasionall y supplemented byworker s 86 fromneighbourin gvillage s(ploughing /harvesting )an dth etow n (harvesting).Sinc eth eintroductio no fth eshort-maturin g varieties,migrator ylabou rfro mothe rpart so fPana yIslan d(bot h froman dt oth evillage )ha scease dt oexis t(Chapte r 4).Th e variouslabou rarrangement sfo rhirin glabou ra swel la sth e earnings(cost )pe rworkda ywil lb ediscusse d inSectio n5.2.5 .

Iti sdifficul tt oarriv ea ta nassessmen to fwag elabou r availability inth evillage .Thi si smainl ydu et oth epart-tim e participationo ffarm-household si nth ewag elabou rmarket .Th e supplyo flabou rfro mthes ehousehold sis ,t osom eextent , uncertainsinc ethe yals ohav et operfor mactivitie so nthei row n farm.Althoug hthes ehousehold sattemp tt opla nthei rfar m operationsi nsuc ha wa ys oa st ob efre efro mow nfar mactivitie s duringperiod so fwag elabou rdeman d (Chapter 7), suchstrateg yi s notalway sfeasibl edu et oth euncertai ninfluenc eo frainfall . Thisparticularl yaffect swag elabou ravailabilit ya tth estar to f thecro pseaso nfo roperation stha trequir eanima lpowe rsuc ha s ploughingan dharrowing .

Moreover,th elabou rutilizatio npatter ni nagricultur eunderwen t aprofoun dchang ei nrecen tyear san dwa sstil li na stat eo f transitiondurin gth estud yperio d (Chapter 4). Inparticular ,th e introductiono fdirec tseedin gtechnique so fric ecro p establishmentan dth edisappearanc eo fth elaboriou sfoo t threshingo frice ,resulte di na shar pdeclin ei nth eus eo fnon - familylabou rpe rhectar eo frice .However ,tota llabou rdeman d forric eproductio ndecline dmuc hles sdu et oth eincreas ei nth « areaunde rdoubl eric ecropping .Thi schang ei nlabou rutilizatio n patterncause dth eoccurrenc eo fa ne wlabou rdeman dpea kdurin g theharvestin g ofth efirs tric ecro pan destablishmen to fth e secondric ecrop .Especiall yi n198 0an d1981 ,sever elabou r shortagesoccurre d inthi sperio dwhic haffecte d landpreparatio n forth esecon dric ecrop .

Duet odifference si nearning spe rda ybetwee nth evariou swag e labouractivitie s (Section5.2.5) ,temporar ylabou rshortage s particularlyoccu rfo rcertai noperation sdurin gcertai nperiod sj ofth eyear .Especiall ydurin gth eharvestin gperiod so fric ean 4 dagmay,i ti softe ndifficul tt ofin dlabou rfo rth eles s remunerativeweedin gan dtransplantin goperations .Suc htemporar y labourshortage sca nb esever efo rfield stha tar elocate da tsoifl e distancefro mth evillage .Also ,fo rpoo ro rsmal lric efield si t isofte ndifficul tt ofin dlabou rfo rth eharvestin goperatio ni n themids to fth eharvestin gseason .

5.1.3 Capital Indeterminin g theleve lo fcapita lus ean dcapita lformation ,a distinctionshoul db emad ebetwee nthre etype so fasse tclasses : .fixe dcapita lasset sincludin gland ,far mequipment , livestock (cattle,workin ganimals ,breedin g pigs),an d houses; 87 .financia lasset stha tinclud ebot hpositiv easset ssuc ha s cashan dric elen tt oothe rhousehold san dnegativ easset s consistingo fborrowe dfunds ; •inventor yasset stha tinclud eric ei nstoc kan dcas ho nhand .

Ina mor edetaile d discussiono nchange si nasse tholding san dth e roleo fasset si nreserv emanagemen to fhouseholds ,i nSectio n 6.3 humancapita lasset si nth efor mo finvestment si neducatio nwil l alsob econsidered .

Assetholding s Figure5.1. 5 showsth eleve lan dcompositio no fasse tholding sfo r twocategorie so fhousehold sa so fApri l 1979an dMarc h1982 ,viz . householdstha thav esufficien tlan dt oprovid efo rminimu mincom e requirementsan dhousehold stha thav enot .Thes ehousehol d categoriesar elabelle d 'surplus'an d 'non-surplus'household s (Section 5.3). Foral lasse tclasse san dtype so fasset swithi n classes,surplu shousehold shav elarge rholding scompare dt onon - surplushouseholds .A so fMarc h 1979,tota lasse tholding s amountedt o$47 2an d$141 3pe rhousehol d forth enon-surplu san d surplushousehol d category,respectively .Fo rth enon-surplu s households,roughl y90 %o fth easse tholdin gconsist so ffixe d assetso fwhic h50 %ca nb eutilize d indirec tproductiv e activities (e.g.land ,far mequipment ,livestock ,etc.) .Fo rth e surplushouseholds ,85 %o fth easset sar efixe do fwhic h75 %i s directproductive .Fo rbot hcategories ,th eleve lo fpositiv e financialasset s(cas ho nhan dan doutstandin g loans)i slow .Th e levelo foutstandin gdebt si sabou tequa lfo rbot hcategorie so f households.

Surplus households ($) LKSJD )//A rice stock +cas h onhan d I I outstanding loans ^^B consumer durables 1600 b*».*?l housing 1111111 farmasset s •VW1 livestock 1X^1 land ^^H outstanding debts 1200

800 Non-surplushousehold s

level composition

400 net worth W Si 1 m April '79 torch '82 April '79 March '82

Fig. 5.1.5 Level and composition of asset holdings 88 Householdcategorie sdiffe rsubstantiall y inth eownershi po f land.Lan dasset sconsis to ffarmlan dan dresidentia llots .Onl y surplushousehold sow nfarmland ,bu ta substantia lnumbe ro f householdso fbot hcategorie shav ethei row nresidentia llot .Lan d valuesar ebase do nfarmers 'estimates ,checke dagains tth e estimateso fothe rknowledgeabl eperson san dactua lsal eprice s forth efe wtransaction stha toccurre ddurin gth estud yperiod .N o valuei sattache d torente dland .I ncontras twit hothe rarea si n thePhilippines ,tenanc ytitle shav en orea lvalu ea sth epractic e ofsub-leasin g lando rsellin go fa tenanc ytitl ei suncommon .Fo r theLagun aare ai nth ePhilippines ,Hayam i(1978 )estimate dth e valueo ftenanc ytitle sa t35 %o fth elan dvalu ei fi twa s leaseholdan d25 %i fi twa sshar etenancy .

Thevalu eo fhouse san dothe rbuilding s(e.g .far mhouses )i s estimateda tthei rresal evalue sa tth estar to fth estud yperio d alsobase do nfarmers 'estimates .Depreciatio ni scalculate db y dividingth epresen tvalu eb yth enumbe ro fyear so fremainin g usablelife .Far mequipmen tcounte da sasset sinclud eonl ymajo r itemssuc ha sploughs ,harrows ,carabao-sledges ,an dknapsac k sprayers.Non eo fth ehousehold si nth esampl eow nmachine ssuc h astractor so rric ethreshers .Als oth evalu eo ffar mequipmen ti s estimatedo nth ebasi so fth epresen tvalue .The yar eestimate d,b y subtracting pastdepreciatio nfro mthei rne wacquisitio nprice sa t localdealer sassumin glinea rdepreciatio nan dzer osalvag evalu e atth een do fusabl elife .Livestoc kasset smainl ycompris e carabaos,bu tals oinclud esom ecow san dsows .Th edifferenc e betweenhousehol dcategorie si nlivestoc kasset si sdu et oth e facttha ta numbe ro fnon-surplu shousehold sd ono thav ethei row n workinganimal ,bu tren tthe mfro mothe rpersons .Hog sar eno t includeda sthe yar eusuall ybough tan dsol dwithi na perio do f oneyear .Consume rdurable scounte da sfixe dasset sar esewin g machines,majo ritem so ffurniture ,radios ,an dbicycles .Thes e assetsar evalue di nth esam ewa ya sfar mequipment .

Positivefinancia lasset sconsis to fcas hsavings ,sale si n credit,an dlen tamount si ncas han dkind .Outstandin gdebt si n cashan dkin dar eenumerate da snegativ efinancia lassets . Inventoryasset sonl yconsis to fstore dpalay .Inventorie so f othercrop s(e.g .cor nan dmungbeans )ar eusuall y small,wherea s inventoriesi nfertilize ran dchemical sar evirtuall ynon - existing.

Workingcapita l Productionactivitie srequir ea substantia lamoun to fworkin g capitalfo rth epurchasin go fcas hinput ssuc ha sfertilizer san d pesticideso rth ehirin go fcasua lwag elabour .Annua linvestment s incurren tinput sfo rcro pproductio nactivitie sdurin gtheTwo^ * yearperio do f1979-198 1- excludin glan dren tpayment san d productshare so fharvester s- wer e$7 0pe rhousehol d forth enon - surplushousehold san d$21 9fo rth esurplu shousehold so naverage . Giventh eleve lo fcurren tcapita lasset s(cas ho nhan dan dric e stocks)a tth estar to f1979 ,i twil lb eclea rtha tth emajorit y 89 of households in the village isunabl e to finance the entire amount of current capital out of own reserves.Fo r the non-surplus households current assets amounted to $59,whic h is far below the average minimum income requirement for subsistence until the next harvest of $197.Th e surplus households are ina much better position, however,als o in their case,th eaverag e level of current assets ($227)i s below the requirements for minimum subsistence needs ($185)an d current production inputs.Hence , the majority of households hast o borrowcas h or palay on the credit market in order to sustain consumption and production activities. The role of credit in the financial management of households will be discussed in detail in Section 6.3.

5.2 Main economic activities and sources of income For most households,agricultur e is themai n source of income.Fo r the three year period of April 1979unti lMarc h 1982,incom e from this source contributed about 78%t o the total annual income of the sample households on average (Table 5.2.1).

Table5.2. 1 Mainsource so fincom eb ycro pseaso n ($);al lsampl ehousehold s

Average 1979-80 1980-81 1981-82 Imputedincom eo ffamil yfactor s inagricultura lproductio n 543 (71)D 461 (72) 625 (74) 546(67 ) Cropproductio n 494 (85) 397 (62) 576 (68) 512(63 ) Ricecrop s 356 (47) 201 (31) 436 (52) 431 (53) Otherseasona lcrop s 121 (16) 177 (28) 119 (14) 68( 8 ) Perennialcrop s 17 ( 2) 19 ( 3) 21 ( 2) 12( 2 ) Livestock production 49 (6 ) 64 (10) 49 (6 ) 35( 4 )

Earningsfro mwag elabou ractivitie s 49 ( 6) 41 ( 6) 46 ( 5) 59( 7 ) Imputedincom eo ffamil yfactor s fromnon-agricultura lactivitie s 53 ( ?) 55 ( 9) 63 ( 8) 40( 5 ) Grantt oth ehousehol d 104 (14) 76 (12) 91 (11) 144(18 ) Receipto fren t 2 2 3 Receipto finteres t 7 (D 1 6 (D 15( 2 ) Otherincom e B (D 5 (D 11 (D 8( D Totalhousehol d income 766 639 845 815 Incomepe rconsume runi t 168 140 186 178 1) Figuresi nparenthese sar epercentage so ftota lhousehol dincome .

This income ismainl y derived from self-employed agricultural activities (91%), whereas the remainder comes from agricultural wage labour activities.Annua l crop production constitutes by far themos t important source of income,contributin g 80%t o agricultural income and 62%t o total household income.O f the total income from crop production perennial crops only constitute a small portion (3%).Pi g fattening and breeding aswel l as poultry production are themai n livestock activities.Th e income from cattle production ismino r (4).Incom e from agricultural wage labour activities,6 % of the total household income,mainl y comes from rice harvesting. Table 5.2.1 also shows that the income from 90 annualcrop si nth e1979-8 0cro pseaso nwa ssubstantiall ybelo w thato fth eothe rtw ocro pseasons .Th e1980-8 1an d1981-8 2 seasonswer eparticularl y favourablefo rric ecro pproduction .Th e cropseaso n1978-7 9(no tpresente d inTabl e5.2.1 )wa smor eo fa n intermediatetype .

Themos timportan tsourc eo fnon-agricultura lincom ei s 'grantst o households',contributin g 14%t oth etota lhousehol dincome .Thi s incomemainl yconsist so fremittance so fchildre nno tpermanentl y stayingi nth ehousehold .Incom ederive d fromself-employe doff - farmactivitie scontribute sabou t5 %t oth etota lhousehol d income.Othe rsource so fincom einclud ereceip to flan drental s andinteres t paymentsfro mric ean dcas hlending .

5.2.1 Annualcro pproductio nactivitie s Thedominan tcroppin gpattern si nth eare afo rbot huplan dfield s andrainfe dan dpartiall y irrigated lowland fields,togethe rwit h cumulativerainfal lprobabilitie sar eshow ni nFigur e5.2.1 . Cumulative rainfall probability

Cumulativeprobabilitie so fhavin g receiveda give n amounto frai no na certai ndat e (start)an do fstil lreceivin ga certai n amounto frai n aftera give ndat e (end). Source:Morri san dZandstra ,1978 .

Upland)

Lowland rainfedt

Lowland partially irrigated) lUSft Ift-361

-| 1 1 1 1 1 1 1 1 I r T—r RPR WAY 3UN ]UL AUG SEP XT NOV DEC JAN FEB P1AR Wonth Fig. 5.2.1 Cumulative rainfallprobabilitie san ddominan tcroppin gpatterns ; WSR:we t seeded rice,OSR idr yseede d rice,TPR :transplante d rice 91 Thegrowin gseaso nca nb esubdivide dint ofour ,broadl ydefine d parts:pre-monsoon ,monsoo n (early,mid ,late) ,post-monsoon ,an d thedr yseason .Th epre-monsoo nseaso nstart si nApri lan d continuesunti lth een do fMay .Rainfal ldurin gthi sperio di s highlyirregula ran dconsist so fa numbe ro fscattere dshowers , someo fwhic hca nb eo fsubstantia lintensit y facilitatingearl y landpreparatio ni nlowlan dan duplan d fieldsan dplantin go f cropssuc ha scor nan ddagma ya swel la sdr yseedin go frice . Pondingo fwate ri nlowlan d fieldsdoe sno toccu rdurin gthi s period.I nth emont ho fJune ,earl ymonsoo nrainfal lma yb e sufficientt oallo wpondin go fwater ,an dplantin go fric ei n puddledsoils ,especiall yi nth ehighe rpositione dwaterwa y fields.Th eperio do fintensiv emonsoo nrainfal lusuall y startsi n Julyan dcontinue sunti lOctober .Cro pplantin gdurin g thisseaso n isalmos tentirel yrestricte d toric ei nlowlan dareas ,a ssoi l moisturecondition si nth euplan darea sd ono tallo wth eplantin g ofuplan dcrops .Th eintensit yan dduratio no frainfal lstart st o declinei nNovembe rfacilitatin g theestablishmen to fuplan dcrop s inuplan dan dsideslop efields .I nDecember ,post-monsoo nrainfal l andresidua lmoistur eusuall yallo wseedin go fpuls ecrop ssuc ha s cowpeaan dmungbean si nlowlan dareas .Th edr yseaso nstart si n January.

Table5.2. 2 presentsdat ao nth eimportanc eo fth emai ncrop si n termso fare acultivate d andcontributio nt ocro pincom efo rth e periodo f1978-1981 .Thes ecrop sar ebriefl ydiscusse dbelow .A moreelaborat eanalysi so fric ecro pcultivatio ni sgive ni n

Table 5.2.2 Areaso fmajo r crops (ha)an dreturn spe rhectar e above variable costan dpe rlabou r hour ($);1978-8 0

Percent Gross margin Gross margin No of dean plot Percent contr. to above varable per labour plots size area crop income 1) cost 2) hour 3) (ha) (*) (*) ($/ha) ($/hr) rice 449 0.276 50.8 77.4 218.8 0.62 maize 223 0.215 19.6 2.7 19.6 0.23 mungbeans 129 0.275 14.5 4.1 40.9 0.53 squash 104 0.134 5.7 6.3 159.8 1.66 taro (dagmay) 73 0.074 2.2 6.2 405.4 0.81 tomato 88 0.061 2.2' 1.0 67.0 0.27 coupea 23 0.138 1.3 0.3 36.8 0.46 uatermellon 19 0.131 1.0 0.1 13.6 0.20 eggplant 35 0.026 0.4 0.5 198.7 0.34 cassava 20 0.044 0.4 0.3 115.2 0.36 bitter gourd 15 0.055 0.3 0.2 61.9 0.53 aloqbate 4) 41 0.012 0.2 0.5 351.6 0.39 other crops 5) 31 0.105 1.3 0.4 37.7 0.34

TOTAL 1256 0.195 100.0 100.0 143.6 0.57 1) Income above variable cost. Variable costscompris e labour inputs (including theimpute d costo ffamil y labour),materia l costs (seeds,fertilizer san dpesticides) ,an dpowe r cost (draught animalsan dmachin e threshers). 2) Gross returns minusvariabl e costa sdefine d under (1),thu s paymentst olan dar eno t subtracted. 3) Gross returns minusmateria lan dpowe r cost dividedb yth etota l labour input inhours . 4) Aloca l spinach-like vegetable. 5) Other crops include sueet mellon,swee t potato,pigeo n pea,swee t pepper,mixe d croppings. 92 Chapter7 .Althoug hth evariou scro pproductio nactivitie sar e discussed separately,the yare ,o fcourse ,al lrelate d toon e anotherb yth ecompetitiv eus eo fth ehousehold' sresource s includingth ejoin tus eo fth ehousehold' smanagemen tcapability . Whensimultaneousl ygrow no nth esam efiel d (intercropping),cro p activitiesar efurthe rrelate d toeac hothe rb ycompetitio nfo r light,water ,nutrients ,etc ,bu tma yals osho w complementary relationships(wee dan ddiseas econtrol ,symbioti c effects,etc.) - Whengrow no nth esam efiel da tdifferen ttimes , cropsar erelate d throughthei rresidua leffec to nsoi l fertilizer,wee dgrowth ,plan tdiseases ,an dwhe ngrow n sequentiallyinfluenc eeac hothe rthroug hth etimin go fplantin g andharvestin g dates.Cro pactivitie sar eals orelate dthroug h financialinterdependences .Th efinancia lpositio no fhousehold s isofte ns otigh ttha tth eproceed so fth esal eo fproduct so fon e cropar eneede d forth efinancin go finput so fothe rcro p activities.

Rice Ricei sb yfa rth emos timportan tcro pi nth earea ,bot hi nterm s ofare acultivate d andcontributio nt otota lcro pincome .Roughl y halfo fth etota lcultivate d areai splante d toric eo fwhic h2$ % isplante dt osecon d ricecrops ,wherea si tcontribute s77 %t oth e totalcro pincom eabov evariabl ecost .Thi sindicate stha tric e productionha sa substantiall yhighe rprofitabilit ycompare dt o theaverag eprofitabilit y ofal lcrop stake ntogether .

Abouttwo-third so fth eric eare aar eoccupie db yIR-varieties .I n 1978,a numbe ro fdifferen tIR-varietie swer estil lgrow n(IR26 , IR30,IR1561 ,IR29 ,IR36 )a swel la stw oothe rimprove dvarietie s releasedb yth eColleg eo fAgricultur ea tLo sBano s(C-l , C-4). However,i nth efollowin gyear sIR3 6almos tentirel yreplace dth e othervarieties ,excep tfo rth etaller ,photo-sensitiv eBE- 3 variety.Durin gth esurve yperiod ,th eare aplante d toBE- 3 remainedmor eo rles sstabl ea ta leve lo f29 %o fth etota lric e area.A smal lportio n(3% )i sstil lcultivate dwit hsomewha tolde r varieties.The yinclud eCamoro s- a tasty ,reddis hgrai nvariet y- thati suse dfo row nconsumptio no nspecia loccasion san dPili t- aglutinou sric evariet y-whic hi suse da sa ningredien tfo rloca l delicacies.

TheIR-varietie sar eeithe rgrow na ssingl ecrop so ri na doubl e ricecro ppattern .A ssingl ecrop sthe yma yb eprecede d bypre - monsooncor no ra dr yseaso ncro psuc ha ssquas ho rtomat oan dn^a y befollowe db ypost-monsoo ncrop ssuc ha smungbea no rcowpea .Th e dominantwa yo festablishin gric ecrop si sdirec tseedin gunt odr y orpuddle dsoils .Th eforme rmetho d isuse di nestablishin gfirs t ricecrop si ndoubl eric ecro ppattern san di nestablishin gearl y seedingso fBE-3 .Transplantin g ofIR-varietie sstil loccurre di n 1978,bu tbecam elimite d toBE- 3crop si nsubsequen tyears .

Corn Corni sa nimportan tcro pi nterm so fare acultivated ,bu ti n 93 termso fth evalu eo fgrai nyiel di tha sabou tth elowes treturn s perhectar ea swel la spe rlabou rhou ro fal lcrop sgrow ni nth e area.Althoug hi toccupie sabou t20 %o fth etota lcultivate darea , itstota lcontributio nt oth etota lcro pincom eabov evariabl e costi sles stha n3% .Farmer sgenerall yconside rcor na sa lo w management 'catch-crop'.However ,a scor nplanting san dyield s are,t osom eextent ,covarian twit hric eplanting san dyields ,i n poorric eproductio nyears ,cor nma yserv ea sa nimportan t substitutefo rrice .I ncas eo flo wric esupplies ,cor ni smixe d withric e(linamudan )fo rconsumption ,bartere dfo rric eo rsol d atth emarket .Further ,i ncalculatin g theeconomi creturn so f cornn ovalu ewa simpute d forth ecro presidue .Cor nstal kis , however,a nimportan tside-produc to fcorn .I ti suse da scaraba o fodderdurin ga perio do fth eyea rwhe nfodde rsupplie sar elo w andmuc hwor ki srequeste d fromcarabaos .Sometime scor ni s specifically growna scattl efodde ri nwhic hcas ei ti sseede da t ahig hdensity .Further ,i ti scommo nt ocu tth eto pportio no f theplan t 1-2week sbefor ei treache sful lmaturity .Thes eto p portionsar eals ouse da scaraba ofodder .

Therear econsiderabl ebetween-yea rdifference si nth eare a planted tocor nbecaus eth efeasibilit yo fcor nplanting si s stronglydependen to nth evariabl eearl yan ddr yseaso nrainfall . Abouttwo-third so fth etota lare agrow nt ocor ni nth eperio d 1978-1980wa splante di nApril-Ma y 1979an dDecember-Februar y 1980.Th ecro pi sgrow ni nbot huplan dan dlowlan d fields.I n upland fields,cor ni splante dafte rfield shav ebee nploughed , whereasth elarge rlowlan d fieldsar eusuall yonl yfurrowe dafte r whichth ecor ni sseede di nthes efurrows .Whe nth ecro plook s promising,th efiel di sploughe d inbetwee nth erow so fcor n (hilling-up).Intercroppin go fcor nwit hth eloca lric evariet y Camorosi scommo npractic ei nth earea .Farmers 'attempt st o followth esam epractic ewit hth eIR3 6variet ywer eno t successful.

Apartfro mth eearl yseaso nplantings ,cor ni ssometime sgrow na s a thirdcro po nuplan dfield susuall yfollowin gmungbean ,an dals o asa las tcro pi nlowlan d fieldsfollowin grice .I nlowlan d fields,cor ni ssometime sintercroppe dwit hsquash ,bitte rgour d (Momordicacharantia) ,mungbean ,an dtomato .I n1980 ,whic hwa sa n exceptionalgoo dyea rfo rdr yseaso ncorn ,a secon dan dthir d relayplantin go fcor noccurred :th esecon dplantin gi nbetwee n therow so fth estandin gcor ncro pan dth ethir dplantin go nth e rowsi nbetwee nth ematur eplant so fth efirs tcor ncrop .Farmer s mainlyus eloca lflin tcor nvarieties .Th ecro pi susuall yno t fertilized becausefertilize rtend st oincreas eth edamag ecause d byth eAsia ncor nborer ,whil epesticide sar erarel yapplie d becauseo fth edange ro flingerin gresidue so ncor nstalk sfe dt o animals.

Pulsecrop s Pulsecrop sgrow ni nth eare ainclud emungbean ,cowpea ,an dpigeo n pea(Cajanu scajan) .The yar emarkete dan duse dfo row n 94 consumption.Mungbea ni sb yfa rth emos timportan tpuls ecro pbot h interm so fare aplante dan dincome .O fth etota lare aplante dt o non-ricecrops ,30 %i sgrow nt omungbea nth elarges tpar to fwhic h isgrow ni nlowlan dareas .It scontributio nt otota lnon-ric ecro p incomei s18% .Simila rt ocorn ,mungbea ni sconsidere d a'catch - crop'. However ,fo rth eperio d 1978-81,return spe rhectar eand : perlabou rhou rwer esubstantiall yabov ethos eo fcorn .Cowpe a occupiesa muc hsmalle rarea ,abou tone-tent ho fth eare ao f mungbean.I tha sabou tsimila rreturn st ovariabl ecos tan dlabou r asmungbean .Th eare aplante d topigeo npe ai sminor .

Anumbe ro fdifferen tmungbea nan dcowpe avarietie sar egrow n whichar elocall ydistinguishe d byth ecolour ,siz ean dshap eo f thegrain .Th elarge rgrai nvarietie swer eintroduce d inth e1960 s andar elocall ycalle d 'miraclemungo' .Mungbea ni splante di n uplandarea swher ei tfollow scorn .Du et oit slonge rgrowt h duration,cowpe ai sles ssuitabl efo rcultivatio ni nuplan dareas . Inlowlan dareas ,cowpe aan dmungbea nfollo wric ean dar ecommonl y relayedint oth eric estubble .Thi splantin gmetho dallow sfarmer s toquickl yestablis hth ecro peithe rafte ro rjus tbefor eth e harvestingo fric ei norde rt otak eful ladvantag eo fth eresidua l moisture.

Incontras twit hcowpea ,mungbea ni sconsidere da nexcellen tcro p tob eplante d inarea swher edr yseede dric ecrop sar eplanne dt o begrow ni nth enex tseason .I teffectivel yprevent sth egrazin g ofanimal sdurin gth edr yseaso nan d- accordin g tofarmer s- i t hasa beneficia leffec to nth esoi lstructur ewhic hfaciliate s easiertillage .Further ,th eharvestin go fmungbea ndoe sno t interferewit hth eestablismen to fth eearl yric ecrops .Th e harvestingo fcowpe aofte nextend swel lint oth ebeginnin go fth e wetseaso nbecaus ethi scro pi sabl et osurviv edr yseaso n conditions.Moreover ,du et oit screepin ggrowt hcharacter ,th e cleaningan dploughin go fa cowpe afiel di sdifficult .Mungbea ni s sometimesgrow ni nmixe dcroppin gwit hcowpe aan dcorn .Cowpe ai s lesssuite da sa nintercro pwit htal lcrop ssuc ha scor nbecaus e thecro pyield sles sunde rcondition so flo wligh tintensity . Moreover,cowpe aha sa detrimenta leffec to ncor ndu et oit s climbimgnature .

Dagmay Dagmayi son eo fth emajo rcas hcrop so fth evillage .I nterm so f grossmargi npe rhectar ei ti sth emos tprofitabl ecrop ,wherea s returnst olabou rar eabov eaverage .Becaus eit scultivatio ni s bothlabou ran dcas hintensive ,i ti sgenerall ygrow ni nsmal l areas.I toccupie s4.5 %o fth enon-ric eare aan dcontribute smor e than27 %(! ) toth etota lnon-ric ecro pincome .Dagma yi sa particulartyp eo ftar oknow na sdasheen .I ti sgrow ni nuplan d and sideslopefields .I ncontras twit hothe rtar ovarieties ,i t cannotwithstan dwaterloggin gan dcrop splante d onth elowe r sideslopefield srequir eprope rdrainag eo ffields .

Thecro pi snormall y plantedafte rth efirs train si nApri lo r 95 May,bu tca nb eplante d indr ysoi lcondition si nMarch .Earl y plantingsunde rirrigate dcondition so rusin gwaterin gb yhan di s practised.Althoug hthi srequire sa substantia lamoun to flabour , thesecrop sar eharveste d earlyan dfetc hhig hprice so nth e market.Th eplanting ,harvestin gan dpost-harves toperatio n requiresubstantia lamount so flabour .Moreover ,th efiel dshoul d bekep tmor eo rles sweedfree ,particularl y duringth eearl y growthstage ,wherea sth eapplicatio no ffertilize ri sessentia l forprope r plantdevelopmen tan dt oobtai na cro pqualit ywhic h allowsmarketing .Limite d seedavailability ,hig hsee dcost , togetherwit hhig hlabou rrequirement san dfertilize rcost ,ar e majorconstraint st oth ecultivatio no fthi scro pb yresource-poo r farmers.

Thecro pmature si nfiv et osi xmonths .However ,harvestin g usuallystart s17-1 9week safte rgerminatio nwhe nth emai ncor m hasdevelope d twosid etuber san dma ycontinu efo rabou tfou r months.Bot htuber san dleave sar eedibl ean dmarketed .A sth e cropreache smaturit y therati otubers/leave sincreases .A tth e endo fth eharvestin g periodonl yside-tuber sar esold .Th e villagei salmos tth esol esupplie ro fthi scro pt onearb yurba n centres.

Squash Anotherimportan tcas hcro pi nth evillag ei ssquash .I toccupie s about1-2 %o fth eare aplante d tonon-ric ecrop san dcontribute s around 28%t oth etota lnon-ric ecro pincome .Althoug hi tha sa substantiallylowe rprofi tleve lpe rhectar ecompare d todagmay , iti sabou ttwic ea sprofitabl epe rlabou rhour .I ti sgrow ni n bothuplan darea swher ei tfollow sdagma yo rmungbeans ,an di n lowlandfield sfollowin grice .I ti sals ogrow nunde rirrigate d conditionsi nth edr yseaso nan dca nfurthe rb efoun do nborder s andbund ssurroundin g lowland fields.Farmer sonl ygro wloca l varietieswhic har edistinguishe d byth eshap ean dcolou ro fth e fruit.

Squashi seithe rseede di nhole so rraise do nseedbed san d transplanted.Transplantin g ispreferre d forearl ycrop st o preventsee ddamag edu et oexcessiv emoisture ,wherea sseedin gi n holesi susuall ycarrie dou twit hlat ecrop sa si tpromote sa deeperroo tdevelopment .Although ,squas hi sabl et owithstan d periodso fheav yrain san deve nshor tperiod so fstandin gwater , excessivemoistur ei sa commo ncaus efo rcro pfailur eo fearl y plantedcrops ,particularl y inth euplan dan dsideslop efields . Forth edry-seaso nsquash ,farmer susuall yconstruc ta simpl ewel l toallo winitia lirrigatio nb yhand .Unlik eothe rcucurbitacea e growni nth evillag e (seebelow) ,squas hha sth eabilit yt o recoverafte ra lon gdr yperio dan dfarmer softe nleav egoo d lookingsquas hcrop si nth efiel dunti lth epondin go fwate r destroysth ecrop .Suc hcrop sma ygro wwel li nth eearl yseaso n rainfallan dproduc ea goo dyiel dprio rt oth eestablishmen to f thefirs tric ecrop .I nlowlan dareas ,th ecro pmake sa nexcellen t intercropwit hcorn .I ti scommo nt oappl yfertilizer .Squas h 96 fruitsca nb eretaine d forlon gperiod sbot hi nth efiel dan d harvested.I nth ecas eo flo wmarke tprices ,squas hca nserv ea 3 excellentpi gfood .

Othercucurbitacea egrow ni nth evillag einclud eswee tmellon , watermellon(Citrillu slanatus) ,an dbitte rgourd .Th eare a planted tothes ecrop si ssmall .Cultivatio npractice sar esimila r tosquash .Swee tmelo ni smainl ygrow nfo rhom econsumption . Unlikei nnearb yvillage swher ewatermello ni sa nimportan tcas h crop,farmers 'attempt st ogro wa nimprove d varietyo fwatermello n wereno tsuccessfu ldu et oseriou spes tinfestatio nwit hroot-kno t nematodes.Bitte rgour di sprimaril ygrow nfo rth emarket . However,th eprofitabilit yo fthi scro pi ssubstantiall ybelo w thato fsquash .Unlik esquash ,bitte rgour dcanno tb estore dan< | timelyharvestin g isrequired .

Tomatoes Apartfro msquash ,tomat oi sanothe rcommo ndr yseaso ncro pgrow n byalmos tal lhousehold si nth evillage .I ti sprimaril ygrow nfo r themarket ,bu ti sals oa nimportan tingredien ti nmeals .I t occupies4.5 %o fth eare aplante d tonon-ric ecrop san dha sa similarcontributio nt ocro pincome .Although ,tomatoe sstil lhav e acomparativel yhig hprofi tleve lo na pe rhectar ebasis ,return s tolabou rfro mthi slabou rintensiv ecro par elo wdu et oth elarg e numbero fcro pfailure smainl ycause db ydrough tan ddiseases . Moreover,fo rcertai nperiod so fth eyea rth epric eo ftomatoe si s highlyvariabl ean dunpredictabl e (seeFigur e5.2.3) .Tomatoe sar e planted throughoutth edr yseason .Earl yplanting scommenc ei nth e upland fields,wherea slat eseaso nplanting soccu ri nlowlan d fields.Thes elat eplanting srequir eirrigatio nb yhan dan dma y fetchhig hprice sdurin gth eonse to fth ewe tseason .

Theremainin gcultivate dare ai soccupie d bya numbe ro fmino r crops.O fthes ecrop seggplan t (Solanummelongena) ,cassav a (Manihotesculenta ,an dIndia nSpinac h (Bassellarubra )(locall y knowna salogbate) ,hav ehig hgros smargin so na pe rhectar e basis.Cassav ai sgrow nb ya numbe ro fhousehold sprimaril yfo r theproductio no fa loca ldelicac ycalle dbut'on gwhic hconsist s ofcassav aflou rwit hsugar .I ti sals ouse dfo rhom econsumption . Themarke tfo rcassav ai slimited .Hence ,i nth ecomputatio no f theeconomi creturn sth eprocessin go fcassav aint obut'on gwa s includedwhic hexplain sth erelativ ehig hreturn spe rhectar ean d highlabou rrequirements .Alogbat ean deggplan tar emainl ygrow n bywomen ,usuall yi nver ysmal lquantities .Especiall yalogbate ;i s ahig hvalued ,labou rintensiv ecrop .Als oth emarketin go fthes e cropsi susuall ycarrie dou tb ywomen .Othe rmino rcrop sinclud e sweetpotat o(Ipomoe abatatas )an dswee tpeppe r (Capsicumannuum) .

Farminpu tsuppl yan dmarketin go fagricultura lproduct s Chemicalinput sar ewidel yuse di nmos to fth eabov ecro p productionactivities .A larg evariet yo ffar minput si ssupplie d bya numbe ro fretai lpoint si nth etw onearb ytown sa swel las ,i n thecity .Far minput sca nb eobtaine d fromstore si nth enearb y 97 townan da tsomewha t lower pricesi nIloil oCity .I ti scommo n that farmersbu ypesticide san dherbicide si nth etow na ttime s thatwee d andpes t infestations require spraying.Th enumbe ro f brandsan dtype so fpesticide san dherbicide s availablei s staggering andinclud e both contactan dsystemati c chemicals.Th e salean dus eo fa numbe ro fthes e chemicals isprohibite di n Western countries.Fertilizer sar eusuall y bought inth ecit yan d transported byjeepney .I ti sals o common thatfo ra smal l provision thejeepne y driver himself buysth efertilize ra tth e requesto ffarmers .Mor e recently,i tha sbecom e possible tobu y fertilizer oncredi t from private lenders.A numbe ro fdifferen t typesan dbrand so ffertilize r available including urea,ammoniu m phosphate,ammoniu m sulphate,an dcompoun d fertilizers sucha s14 - 14-14.However ,certai n fertilizersar eno tavailabl e sucha spur e phosphate-based fertilizers.Fertilize r isonl y sold inbag so f 50kg .

Fertilizer priceshav e increased substantially inth eperio do f 1978unti l 1982.Th emai n reasonfo rthi s price increasewa sth e abolition ofth esubsid y onfertilize r provided byth eGovernment . Also rice prices increased substantially during this period (Table 5.2.3).O fcourse ,thi s price increase only favours farmers able to sell surplus rice production.

Table5.2. 3 Nominalan d real priceso ffertilizer s($/50kg )

Typeo f Percentchang e fertilizer 1978 1979 1980 1981 1978t o198 1

urea 10.1 12.5(11.8 ) 1)13. 5(11.0 ) 16.6(12.5 ) 64(24 ) ammonium sulphate 7.0 9.3 (8.8 ) 11.2( 8.2 ) 12.9( 9.7 ) 84(39 ) ammoniumphosphat e 9.3 12.3(11.7 ) 13.0(10.6 ) 15.5(11.7 ) 67(26 ) 14-14-14 8.7 11.0(10.4 ) 12.0( 9.8 ) 14.8(11.1 ) 70(28 ) VillagePala y Price(VPP )($cts/kg ) 13.9 14.7 17.0 18.5 33 1)Figure si nparenthese sar edeflate d pricesbase do nth eVPP-index .

Themarketin g system foragricultura l productsi swel l organized and,t oa larg e extent,competitive .Excep t forric ean dcorn ,a largenumbe r ofbuyer san dseller soperat eo nthes emarkets .Th e roleo fgovernmen t marketing organizations isnegligible .

The ricean dcor nmarketin g ishandle d bya limite d numbero ftown - based tradersan da fe wlarg e farmerso fth evillag ean d neigbouring villages.Th etown-base d merchantsar econtacte d by farmersan dth emerchan t provides transportation.Th efarmer - merchantsusuall y tieric emarketin g tomone y andric e lending, anda numbe rar eals o involved inrice-milling .Onl yon efarme ri n thevillag eha sacces st oth egovernmen t marketing organization NGA (NationalGrain s Authority)an dfill shi sexces s sales quotum with locally purchased rice.

Duet oth evirtua l absenceo fa governmen t marketing channel,th e 98 pricesuppor tsyste mfo rric ei sineffective .Hence ,farmgat e priceso fpala ysho wth eusua lseasona lpatter no fvariatio n (Figure5.2.2) .I nth eperio do f197 8unti l198 2ric eprice shav e increased substantially,mainl ya sa resul to fth eincreas ei n ricepurchase scause d byth eestablishmen to fa larg eprivat erice - milllocate d some1 2k mfro mth evillage .

Rice

1979-80 1980-81 1981-82 ' ' ' • ' ' ' I I L. 18 2226303438 42 4650 2 6 10

Fig. 5.2.2 Seasonal pattern ofpala y farmgate prices (indices); Week no. 1=1-7 Jan.

Themarketin go fnon-ric ecrop si shandle d bypett ymerchant s(i n particularmiddlewomen) ,farmer san dthei rwives .Marke toutlet s consisto ftw otow nmarket slocate dsom e3 an d4 k mfro mth e villagehavin gtw omarke tday sa tdifferen ttime so fth eweek , everyweek .Tw olarg ecentra lmarket sar ei ndail yoperatio ni n IloiloCity .Th etow nmarket smainl yserv ea retailin gfunction , whereasth ecit ymarket sar euse dfo rbot hretai lan dwholesal e marketing.

Asmal lgrou po fmiddle-wome nprovide sth emai nmarketin gchanne l forvegetable sothe rtha ndagmay .Durin gth emarketin gseaso nthe y payfrequen tvisit st ofarmer san dofte nhav ea specia l arrangement (suki)wit hfarmer sregardin gth eoptio nt osel lthei r products.The yeithe rretai lo rwholesal eth eproduct so nth etw o centralmarket so fIloil oCity .Sal eprice sar efixe di nadvanc e butactua lpaymen toccur safte rth eproduct sar esold .Product s aretransporte d byjeepney ,usuall yleavin gth evillag ea ttw o o'clocka tnigh tan dreturnin ga ttw oo'cloc ki nth eafternoon .

Smallquantitie so fvegetable slik ealogbate ,tomato ,an deggplan t areretaile do nth etw otow nmarket sb yth efarmers 'wives .The y useth eproceed st obu yconsume rgood ssuc ha soil ,fish ,soap , 99 etc.I ti sa typicall y femalecircui tsinc ethes eproduct sar e alsoofte ngrow nb ywomen .Thi ssmall-scal e 'subsistence- marketing'i sdescribe dan danalyze d indetai lb ySzanto n (1972). Morerecently ,i tha sbecom epopula rtha tfarmer sthemselve s wholesalelarge rquantitie so fnon-ric ecrops ,notabl ydagma yan d squash,o nth ecentra lmarket so fIloil oCity .The yar eyoung , relativelywell-of ffarmer swh olik evisitin gth ecit yan d considermarketin ga nattractiv eopportunit yt oear nextr acash .

Productprice so fstorabl ecrop ssuc ha scorn ,mungbeans ,an d cowpeaar efairl ystable .Bot hcor nan dcowpe aar eunimportan t commercialcrops .The yar eusuall yhom econsumed ,wherea scor ni s alsouse da sfodde rfo ranimals .Becaus eo fth edifferenc ei n growingseason ,mungbea nprice ssho wa pric epatter nopposit et o thato fric e (Figure5.2.3) .Th eseasona lpric epatter no fdagma y isver ysimila rbetwee nyears .Becaus eth evillag ei sth emai n suppliero fthi scro pt oIloil oCity ,initia lcro pprice sar ehig h butdro pquickl ywhe nmor efarmer s- eage rt ofetc hhig hprices , butals oforce dt osel ldagma ydu et ocas hneed sfo rth e purchasingo ffertilize r- star tt oharves tth ecrop .Afte rth e initialhig hpric eperio dha spassed ,price sten d tostabiliz ea s thepressur et osel ldagma ydecreases .Farmer scontinu et o graduallyharves tth ecrop ,thereb ytakin gint oaccoun tth etota l amounto fdagma yenterin gth emarket .Als osquas han dtomatoe s showa stron gseasona lpric epattern .Compare dt oothe rcrops , variationsi nthi spatter nar emuc hmor epronounce dan dthu sles s predictable.Moreover ,unlik eothe rcrops ,squas han dtomatoe sma y reachsuc hlo wpric elevel stha tfarmer sd ono ttak eth eeffor to f harvestingth ecro pan dtransportin gi tt oth emarket .Whethe r farmersdecid et oleav eth ecro pi nth efiel ddepend so nth e wealthstatu so fth ehousehold san dth eimmediat enee dfo rcash .

5.2.2 Perennialcrop s Thecas hincom ederive d fromperennia lcrop si smino r ($18pe r household)an dmainl ycome sfro mbananas ,mangoes ,an dfirewood . Thisfigure ,however ,underestimate sth etota lincom efro m perennialcrop sa shom econsumptio no fthes eproduct si sno t accounted for(5) .

Almostever yhousehol dha sit sow nsuppl yo fbananas .Thes eplant s arefoun daroun dth ehouse ,o nth ehighe rpar to fuplan dfields , onth ehillsides ,an do nth ebund so flowlan dric efields .Variou s localvarietie sar egrow no fwhic hsom ear esuitabl efo rdirec t consumption (tundal),wherea sothe rtype s(plantain )hav et ob e boiledbefor econsumptio n (sab'a).Apar tfro mow nconsumption , smallquantitie sar esometime ssol da tth etow nmarkets .

Althoughth econtributio nfro mmang oproductio nt oth etota l villageincom ei slow ,i ti sa nimportan tsourc eo fincom efo ra fewhouseholds .Mang otree sar escattere d inth ehill yare ao fth e village.Productio ni sbot hfo rth eloca lmarke tan dfo rexpor tt o othercountries .I nth elatte rcase ,qualit yrequirement sar ehig h 100 101

c i-ra> en i (0 »- •cH 0) •P •8 U II en 0) ID •rHt T- D. » o i (0 II a. 0) u i-H TH 10 M C 1 o• ^1 : o c c in o CO c J£ o CM CD 0) CO CO CO en u a) o o 3 m o **^ <4- CO CO - n >. CO CM 01 00 • 0! % in o (0 •H •H •D a. • T3 O. en c (-1 •H -H O C_J u_ ^ U- 1*N 1 " i

8 8 102 andfrequen tsprayin gwit hpesticide si srequire d topreven t damageb yinsects .I ti scommo npractic etha ta grou po fme nren t anumbe ro fmang otree sfo ron eproductio ncycle .T oinduc e flowering,tree sar espraye dwit hchemicals .

Coconuttree sprovid ea numbe ro fvaluabl eproducts .Th efruit s areuse di nmea lpreparatio nan dfor ma ningredien tfo rloca l delicacieswhic har esol do nth emarket .Th eproductio no fcopr a iso fmino rimportance .However ,a larg enumbe ro fcoconut si sno t usedfo rnu tproductio nbu ti sutilize d inth eproductio no fpal m wine (tuba).Thi smil dalcoholi cbeverag ei sobtaine d fromth e drippingso fyoun gflowe rpod so fwhic ha tin yslic ei scu ttwic e aday .Th etub ai scollecte d dailyb ya numbe ro fprofessiona l tuba-gatherers.Thes epeopl ehav e10-2 0tree si nproductio nan d usuallyren ta numbe ro fcoconu ttree sfro mothe rhouseholds . Further,coconut sprovid evaluabl econstructio nmaterials .Fro m thetrunk sexcellen ttimbe ran dpole sca nb eobtained ,wherea sth e leavesar euse da sroofin gmaterial .Th elarg emid-rib so fcoconu t leavesca nb euse dfo rfuel .

Bambooi sth emos timportan tsourc eo fbuildin gmaterials .Excep t forth eroofin gan dth ecorne rpoles ,mos thouse si nth evillag e arefull yconstructe do fbamboo .I ti sals ouse d inth e manufacturingo ffurniture ,constructio no fpi gpens ,etc .A fe w familieshav elarg eenoug harea so fbambo ot osel la par to fi to n themarket .However ,mos thousehold shav ea smal lbambo oare ai n commonpropert ywit hothe rmember so fa family .

Similart oth ebambo oareas ,a larg enumbe ro fhousehold shav e firewood lotsi ncommo npropert ywit hothe rfamil ymembers . Firewoodi smainl yuse dfo row npurposes ,i.e. ,cookin gan dfee d preparationfo rpigs .A fe whousehold shav elarg eenoug harea st o sellfirewoo dt oothe rhousehold si nth evillag eo rt omarke ti t inth etown so rth ecity .I ti sals ocommo nt osel la standin g cropo ffirewoo d inwhic hcas eth ebuye rcut sit .I nth evillage , householdswithou tthei row nfirewoo d lotar ecomplainin gabou t theworsenin gfirewoo d situationan dincreasin gprices .Durin gth e surveyperiod ,a numbe ro ffarmer swer eplantin ga par to fthei r uplandfield st oth efas tgrowin gipil-ipi ltree s(Leucaen a glauca).

5.2.3 Livestockactivitie s Livestockproductio nform sa nimportan tsupplementar y sourceo f incomet ocro pproductio nan dwag elabou ractivities .Ho g fatteningi sth emajo rlivestoc kactivit yi nth evillage .Nearl y three-quarterso fth esampl ehousehold shav ethei row nhog , whereas30 %o fth ehousehold shav ea ho gunde ra so-calle dsago d arrangement.Sago dliterall ymean s 'takingcare' .I nsuc h arrangementsth e 'sagod-taker'agree st ofee da pigle towne db y anotherperso ni nretur nfo ra 50:5 0sharin go fth eproceed safte r sale.Onl ya fe whousehold shav emor etha non epig .Thes epig sar e usuallykep ti na shade dpig-pe ni nth ebackyard .Ho gfattenin gi s 103 atypicall y femaleactivity .Th eloca lbree dpig sar emainl yfe d withhousehol drefuse ,ric ebra n (upa),th einne rportio no f bananastalk san dkangkon g(Ipomoe aaquatica) ,a commo nwee di n well-watered lowlandric efields .Wome nspen dconsiderabl etim eo n collecting thesematerials .Additiona ltim ei srequire d toprepar e thesefee dmaterial sbefor ethe yca nb efe dt oth epi g(cuttin g andcooking) .Occasionally ,thi sdie ti ssupplemente dwit h coarsely groundcor nan dipil-ipi lleaves .I favailable ,squas hi s alsoa nexcellen tpi gfeed .

Recently,unde rth eauspice so fa ne wgovernmen tdevelopmen t programme (Kabsaka),i tbecam epossibl et oacquir ehybri dpig so n creditincludin gcas hfo rfeed san dvaccinations .Initia lresult s lookpromisin gbu tfeedin gan dvaccinatio nexpense sar ehigh .S o far,onl ytw ohousehold shav emad eus eo fthi sarrangement .

Afe whousehold sar eals oactiv ei npi gbreeding ,a nactivit y mainlycarrie dou tb ywome no fth eolder ,somewha twealthie r households.Th eincidenc eo fpigle tmortalit ymake sthi sactivit y morerisk ytha npi gfattening .Als oth ecapita linvestmen t(sow ) andcurren tinpu tcos t(feedin gdurin gpregnanc yan dsucklin g period)i ssubstantiall yhighe ran dpiglet snee dt ob evaccinated .

Cowraisin gan dfattenin gi so fmino rimportanc ei nth evillage . Cowsar eno tkep tfo rmil kproductio nbu tar eprimaril yreare dfo r beefproduction .The yar eno tpermanentl ystalled .Grazin gi sdon e ina simila rwa ya swit hcarabaos ,usuall yb ywome nan dchildren . Duet oth ehig hlabou rrequirement sfo rgrazin gth eanimals , returnst olabou ro fthi sactivit yar egenerall ylow .I ti sa n activitytypicall yundertake nb yth epoore rhousehold swh o commonlyhav ecow si nsago dfro mothe rowners .A numbe ro fthes e householdsd ono thav ea carabao .I nuplan d fieldscow sar euse d forlan dpreparatio nactivities .

Virtuallyal lhousehold shav echicke ntha tar elef tfre et oroa m around thehouse .The yar emainl yraise dfo row nconsumptio no n specialoccasions .Productivit y islo wdu et oth ever ycontagiou s fowlpest ,a devastatin gdiseas ewhic hsometime sdecimate sth e villagechicke npopulatio ndurin gth esumme rmonth so fMarch - April.A numbe ro ffarmer shav eattempte d torais echicke no na morecommercia lscal ei nshed slocate da tsom edistanc efro mth e centreo fth evillag ei norde rt oreduc eth eincidenc eo ffow l pest.However ,thes eattempt shav egenerall yno tbee nver y successful.On eo fth eproblem sinvolve sprotectin gchicke nfro m theft.I ncontras twit hothe rarea si nth ePhilippines ,duc k raisingi so fmino rimportance .Als ogoat sar erarel yfound .

Ane wactivit yi nth evillag ei sth erice-fis hculture .I n1980 ,a wealthy farmerstarte dt oexperimen twit hthi styp eo fintercro p whichi nothe rpart so fIloil owa sintroduce dsinc e1978 .Althoug h somefis hi salway spresen ti nric efield sdurin gth ewe tseaso n (e.g.mudfish) ,thi swa sth efirs tattemp tt ocontrolle dfis h productionwit hth efas tgrowin gtilapi a(Tilapi amossambica) . 104 Fromth efirs tresult si tappear stha ti ti sa ver yprofitabl e activity.However ,conflict sbetwee nfis han dric eproductio ndi d notaris eyet .I ti sno tclea rwha tshoul db edon ewhe nth eric e cropi spes tinfeste dan drequire schemica ltreatment .Further , sincethi sproductio nsyste mrequire ssufficien twate rfo rstoriti g theyoun gfis hdurin gth edr yseason ,fe whousehold sca nmak eus e ofthi stechnology .

Themai nchanne lfo rlivestoc kmarketin g (exceptpoultry) ,i s controlled bya fe wvillag efarmers .The yusuall yoperat ei n groupso ftw ot othre eperson so fwhic hon efinance sth e operation.Livestoc ktradin gi sdon ethroug ha networ ko fweekl y rotatingmarket si nth ewester npar to fIloil oProvince .A tthes e markets,th etrader sar erepresente d bycommissioner swh oprovid e themwit hmarke tinformatio nan dfurthe rassis ti nth e transportationo fcattle ,usuall yo nfoot .Thes elivestoc ktradekr s alsoprovid eassistanc ei ncas ea farme rwant st ochang ehi s workinganima lfo ra ne wone .Befor eth eactua lpurchas ei smade , thetrade rallow sth efarme rt otes tth eworkin ganima lfo ra wee k ors oan dwil ltak ei tbac ki ncas ei tdoe sno tmee tth efarmer s requirement.

Pigsar emainl y soldo rbartere dwithi nth evillag eitself .A largequantit yo fpor ki sconsume ddurin gth eannua lfiest ao fth e villagei nMay .Fo rthi scelebration ,i ti scommo ntha ta numbe r ofhousehold sslaughte rthei rpi gan dbarte rth epor kfo rric et o bepai dafte rth e(BE-3 )harves ti nDecember .

5.2.4 Self-employed non-agriculturalactivitie s Incomederive d fromself-employe dnon-agricultura lactivitie s amountst oa lo w5 %o fth etota lhousehol d income.Mai nsource s6 f incomeinclud ebaske tweaving ,petty-trad eo fcrops ,livestoc k I trading,sellin go fow nmad edelicacies ,an dsellin gbrea do r mealsdurin gth emai nric eharvestin g season.Basket sar emainl y soldi nth evillage .Baske tweavin grequire sa certai nskil lwhi^ h seemst odisappea rwit hth eyoun ggeneration .Preparatio nan d sellingo fdelicacie sinvolve sth ecassava-base d candybut'on g earliermentioned .

5.2.5 Wagelabou ractivitie s Hiringlabou ro na dail ywag ebasi si sth emos tcommo nlabou r arrangementfo rcro poperation sothe rtha nharvesting .Depending ! onth etyp eo foperatio nusuall y1 t o3 meal sar eprovide d in i additiont oth ewag epayment .Fo rth elan dpreparatio nactivities , thewag epaymen ti sabou tdoubl eth erat eo factivitie sonl y i requiringmanua llabou rsuc ha stransplantin gan dweedin g(Tabl e 5.2.4).Wag epayment sar emor eo rles sconstan tdurin gth ecro p season.The yar erarel yincrease d inrespons et oa tigh tlabou r; marketsituation .Th eusua lwa yt oattrac tlabou rdurin gsuc h periodsi st ooffe rmor ean dbette rmeal st oth elabourers .I nth e fouryea rstud yperiod ,wag erate sincrease dtwice ,i n197 9an d 1981(Tabl e5.2.5) .Accordin gt ofarmers ,wag erat eincrease si n 105

Table5.2. 4 Hired labourcost/wag elabou iearning spe lworkda y ($); 1979price s Product Wage Reals provided Food Total Activity share rate Breakfast Lunch Supper expenses cost/earnings Land preparation 1.35-1.62 * * 0.96 2.29-2.58 - without meals 2.70 - no meals - 2.70 Transplanting/ weeding 0.67-0.81 * 0.51 1.18-1.32 Rice harvesting (contract) mechanical threshing 1/9 of gross product * * * 0.90 1.95-3.88 foot threshing 1/6 of gross product * * * 0.90 1.47-2.94 Rice hauling 0.14-0.34/bag palay * 0.7B 2.45 Carpentry 1.35-2.00 * * * 0.64 2.23-2.88 - without meals 2.70 - no meals - 2.70 this village primarily occur in response toa n increase in rice prices. Thedevelopmen t ofth erea l wage rate tends to confirm this. When thewag e rate isdeflate d by thepric e of palay onth e local market (VPP-Index), iti s surprisingly stable. When the wage rate is deflated with theofficia l consumer price index for Iloilo Province, thewag e rate pattern iseve n more stable. It should be noted, however, that in both cases wage rate increases occurred in a tight labour market situation, i.e.,durin g theperio d ofth e establishment ofth esecon d rice crop.

The predominant arrangement forharvestin g crops involves product sharing. Labour forharvestin g caneithe r be obtained onth e basis of 'open' participation (pasapar), i.e.,anyon e isallowe d to join the harvesting operation ori nth efor m of contract groups consisting of6 to 12person s (pakyaw). The former arrangement is common atth estar t ofth eric e harvesting season, whereasth e latter is common during themai n harvesting periods.Th e product share differs forth evariou s crops andwhethe r harvesting Table5.2. 5 Developmento frea lagricultura lwag erate s(Pesos )

* change 1978 1979 1980 1981 1978-81 Nominal Land preparation 10.0 (17.1) 1) 12.0 12.0 15.0 (24.7) +50* (+44*) Weeding/transplanting 5.0 ( 8.8) 6.0 6.0 7.0 (12.2) +40* (+39*) Average 7.5 (13.0) 9.0 9.0 11.0 (18.5) +47* (+42*) Deflated by VPP-index 05) (100) (116) (126) Land preparation 10.5 (18.0) 12.0 10.3 11.9 (19.6) +13* (+ 9*) Weeding/transplanting 5.3 ( 9.3) 6.0 5.2 5.6 ( 9.7) + 6* (+ 4*) Average 7.9 (13.7) 9.0 7.8 8.7 (14.7) +10* (+ 7*) Deflated by consumer price index 2) (80) (100) (106) (118) Land preparation 12.5 (21.4) 12.0 11.3 12.7 (20.9) + 2* (- 2*) Weeding/transplanting 6.3 (11.0) 6.0 5.7 5.9 (10.3) - 4* (- 4*) Average 9.4 (16.3) 9.0 6.5 9.3 (15.7) - 1* (- 3*) 1) Figuresi nparenthese sar ewag erate sincludin gth ecos to fprovide dmeals . 2) Officialconsume rpric epric einde xfo rth eWester nVisayas . 106 includescuttin go rthreshin go rboth .A smentione dearlier ,a contractharvestin garrangemen tals ooccur si nth eharvestin go f taro(porcentuan) .

Contractgrou parrangemen tfurthe roccu ri nnon-harvestin g activitiessuc ha sploughing .Th egrou pa sa whol ei spai da fiie d amountfo rploughin ga certai npiec eo fland .Previously ,suc h contractgroup swer eals oactiv ei ntransplantin g rice.I ti s commontha tthes egroup sar eals oactiv ei nexchang elabou r activities(dagyaw ,se eAppendi x II.2).

Incontras twit hothe rpart so fth eprovince ,i nthi svillag eth e sagodarrangemen ti slimite dt oho gfattening .Particularl yi n irrigated ricearea swher ea substantia lpar to fth ehousehold si s landless,sago dlabou rals ooccur si nric eproduction .Labourer s agreet owee dric efield swithou treceivin gan ypaymen ti nretur n forth eoptio ntha tthe ywil lb eth esol eharvester so fth efiel d (Ledesma, 1982).

Thearat-lauwa narrangemen ti so fmino rimportance .I tinvolve sa n advancepaymen to flabou rtha tma yb erequeste d inth ecours eo f thecro pseason .Fo rth efarme rgivin gth earat-lauwa ni tha sth e advantagetha th eca nclai mpriorit yfo rth elabourer' stim ei n periodso fhig hlabou rdemand .I nsuc hperiod si ti softe n difficultt oacquir elabou rfo rrelativel ylo wpaying-lo wstatu s activitiessuc ha sweeding .Th earrangemen tusuall yoccur sbetwee n thesomewha twealthie rfarmer san dyoun gmal eperson swh oar e anxioust ohav emone yt o 'properly'celebrat eth efiest ai nMay .

-^-Wag elabou ropportunitie sdurin gcertai nperiod so fth eyea rar e scarcean dacces st osuc hactivitie srequire sa goo dpersona l relationshipbetwee nth ewag elaboure ran dfarmer susuall y requestingwag elabour .Thi sapplie sparticularl yt oth e relativelyhig hpayin gearl yseaso nwag elabou ractivitie ssuch ;a s landpreparatio na swel la sprofitabl eharvestin gactivitie ssuc h asdagma yharvesting .Thi sma yappea rt ocontradic tth eremar k madeearlie rtha ti ti ssometime sdifficul tt ofin dsufficien t wagelabou rt ocarr you tagricultura loperations .I tshoul db e realized,however ,tha tdu et oth einfluenc eo fa highl yvariabl e onseto fth egrowin gseason ,th edeman d forwag elabou rdurin g certainperiod so fth eseaso nno tonl ystrongl yvarie swithi nah y oneyea rbu tals obetwee nyears .Thus ,imbalance sbetwee ndeman d andsuppl yo fwag elabou ractivitie soccu rquit efrequently .

^(- Apartfro mth ewag elabou ropportunitie si nagriculture ,othe r activitiestha tar epai do na dail ywag ebasi so rinvolv ea lum p sumpaymen tar eservice srendere d bycarpenters ,needl eworkers; , midwives,hilot s(masseur) ,an dherbolario s(traditiona ldoctor ;o r herbalist).Clearly ,acces st osuc hemploymen topportunitie si s restricteda sthe yrequir especifi cskill so rsupernatura lpower . Thesampl ehousehold sinclude d twoprofessiona lcarpenter san don e herbolario.

> • 107 Table5.2. 6 Dailylabou rearning sfo rselecte d income-earningactivitie s($ ) Activity Average Range Self-employed agriculturalactivities ; Cropactivities : 1) rice 4.30 1.82 - 5.81 non-rice 2.06 0.93 - 4.41 Livestockactivities : hogfattenin g 1.01 0.68 - 1.51 hogfattenin g (saqod) 0.57 0.34 - 0.68 pigbreedin g 1.34 0.86 - 1.82 Self-employed non-agriculturalactivities :

But'ongactivit y 0.92 0.80 - 1.24 Petty-trade agriculturalproduct s 1.65 0.03 - 3.32 Wagelabou ractivities :2 ) Landpreparatio n 2.44 2.29 - 2.58 Transplanting/weeding 1.25 1.18 - 1.32 Riceharvestin g (footthreshing ) 2.45 1.47 - 2.94 Riceharvestin g (mech.threshing ) 3.23 1.95 - 3.88 Dagmayharvestin g (porcentuan) 5.88 4.63 - 8.23 Haulingpala y 2.45 Carpentry 2.56 2.23 - 2.88 Sewing 0.64 0.53 - 0.88 1) Basedo nth eaverag eannua lne tretur npe rfamil ylabou rhou rrealize db y householdsfo rth eoveral lric ecro pactivit ydurin gth etwo-yea rperio do f 1979-81.Th esam eapplie st oth enon-ric eactivities . 2) Earningsinclud eimpute d costo fprovide dmeals .

A summary of daily earnings of the above discussed income-earning opportunities is given in Table 5.2.6. Of the self-employed agricultural activities, rice crop production is clearly the most remunerative activity. Daily earnings in livestock activities are comparatively low. A number of wage labour activities (land preparation, rice harvesting combined with foot threshing, hauling rice, and carpentry) have daily earnings comparable to self- employed non-rice crop production. Dagmay harvesting shows the highest level of daily earnings. Of course, the availability of most high pay-off wage labour opportunities is limited to certain periods of the year. This applies especially to dagmay harvesting. Daily earnings in hog fattening and wage labour activities such as transplanting and weeding are relatively low. The worst paying employment opportunities are sewing and hog fattening under the sagod arrangement.

5.3 A typology of farm-households: Surplus production capacity and the family life cycle In the previous two sections, the type of resources at the disposal of households were discussed as well as the wide range of 108 incomeearnin gopportunitie sthroug hwhic hthes eresource sca nb e madeproductive .Befor ei twil lb eanalyze dho windividua l householdsmak eus eo fthes eresource san dopportunitie s(Chapte r 6), inthi ssectio na nattemp twil lb emad ea ta classificatio no f farm-households.Th eide aunderlyin gth ehousehol d classification ist oallo wa nassessmen to fdifference si nmanagemen tstrategie s betweenhousehold stha tdiffe rwit hrespec tt othei rsensitivit y toincom erisks .

Generally,th ehousehold' sris ksensitivit ydepend so nth e household'sabilit yt oovercom epossibl eshortfall si nincom e withoutendangerin g thefutur eincom eearnin gcapacit yo fth e productionunit .Th elatte rimplie stha thousehold sshoul dno t[b e forcedt osel lnon-liqui d productiveasset st ofinanc enecessar y [householdexpenses .A lo wleve lo fris ksensitivit ythu srequirte s theexistenc eo freserve seithe ri nth efor mo fow nfinancia l meanso rfoo dreserve so rdependabl ecredi treserve swit hexterna l \sourcesand/o rth eanticipatio no fsurplu sincom ei nth enea r (futurefro mdependabl eincom esources .Th eaccumulatio no f reservesrequire sa sufficien tincom egeneratin gcapacit yt o providei nnorma lyear sfo ra nincom ewel labov enorma loperatin g expenseso fth ehousehold .Norma loperatin gexpense sinclud eth e usualcos to fproductio nconsxstin go ffar minput sacquire dfro m externalsource sa swel la sth eessentia lsubsistenc erequirement s ofth ehousehol da sa whole ,includin gbot hworker san dnon - workers.A sdiscusse dearlier ,th eexpense sattache d toth e provisiono fdail ysubsistenc eneed s- includin gbot hcas h expendituresfo rhousehol dneed san dconsumptio nrequirement si n kind- mus tb etreate da sa noverhea dcos tassociate dwit hth e generationo fth etota lgros shousehol d income.Household sd ono t havea choic ebu tt omee tthes eexpense so na day-to-da ybasis .

Ofcourse ,th eexistenc eo fa surplu sincom eearnin gcapacit ydoe s notnecessaril yimpl ytha tfo rindividua lyear sreserve sar e present.Du et oth eoccurrenc eo fpoo rproductio nyears ,hig h expendituresdu et osuc hincidence sa sillness ,o rsimpl ybecaus e ofoverspendin g reservesma yb etimel ydepleted .Th ehousehold' s risksensitivit yi sthu sno ta constan tentity ,bu tma ychang e fromyea rt oyea ra swel la s.withi nyears .Th ehousehol dwil ll> e moresensitiv et oincom erisks : .th eclose rth eexpecte dincom eflo wi st oessentia ldail y householdexpenditures ; .th eweake rth epresen tne tfinancia lpositio no fth e householdincludin grequirement sfo rshor tter mdeb t repayment; .th emor elimite dacces si st oreliabl ecredi tsource sa t timeso fa lo wrepaymen tcapacity .

Giventh elimite dimportanc eo fregula rincom ederive dfro m capitalan dlivestoc kasset s(Chapte r 6), thehousehold' sincom e flowi sprimaril ydetermine db yth eavailabilit yo flan dan d 109 labour resources.Further ,wit h scarce opportunities for self- employed non-agricultural activities,th e income earning capacity of householdsmainl y dependso n self-employed crop production factivities and income derived fromwag e labour activities.O f [these two activities,cro p production provides themai n sourceo f surplus income.A searlie r indicated, returns to regular wage Jlabouractivitie s are substantially below the returns of themai n crop production activities.I n fact,give n thewag e rate for casual labour and the restricted market forwag e labour activities, income fromwag e labour hardly qualifiesa sa source of surplus income.I t takes an adult person 85 days of full-time wage labour (assuming 25%hig h paying activities such as rice harvesting ($1.55/day)an d 75%lo wpayin g activities like weeding or transplanting ($0.74/day))t o earn enough income tocove r his ^personalannua l minimum income requirement,excludin g themeal s he jpbtainsa sa wag e labourer.Fo r this reason,non e of the households in the village depend on agricultural wage labour Activitiesa s theonl y source of income.Moreover ,wag e labour activities areno t a dependable source of income.Thi saspec t is important within thecontex t of determining the risk sensitivity of households.I n case households have limited reserves, anticipated surplus income from planned income earning activities may still be sufficient to provide enough income security to allow some level of risk taking,provide d such income source is dependable.I n such case,anticipate d surplus income canb e considered toad d to thehousehold' snea r tuture~reservesan d thus lower thehousehold's_rj.s ksensitivity . Incontras t with income derived trom self-employed agricultural activities,fo r wage labour income households are dependent upondecision s of others and may face theris k of non-availability of timely income earning opportunities.Hence ,wag e labour activities dono t provide a dependable income flowo nwhic h anticipated reserves can be based.

Thus, self-employed crop production activities are the prime source of surplus income in the present village economy.Th e availability of land is therefore more or lessa prerequisite for the generation of surplusincome .Th e surplus productioncapacit y of thecro p production sub-system largely determines the risk sensivltv ot hoUSehrild Slvnir"7ie~pRn7Ts~oST ~~ "~~ . the production capacity of the farmholdin g determined by the sizeo f theare a cultivated, the land quality,an d levelo f employed technology; . thenumbe r of consumer unitsi nth ehousehol d determined by thehousehol d sizean d composition. Another aspect of the risk sensitivity of farm-households is their ability to control thenegativ e effect of unfavourable environmental conditions oncro p production.Th e ability to adequately react tocro p production risks largely dependsupo n the availability of family labour.Du e toth e restricted wage labour market,casua l labourma y be hard to find, particularly at times such labour isbadl y required forcro p husbandry activities such 110 asweedin go rreplanting .Whe nsuc hoperation sar eno tcarrie dou t intime ,th eris ko fcro pfailur ean dthu shousehol d incomeris k maysubstantiall y increase.Th eavailabilit y ofampl efamil y labourresources ,althoug ha liabilit yi nterm so fth eclaim si t putso nsubsistenc erequirement si ncas esuc hlabou rcanno tb e madeproductive ,i sthus ,o nth eothe rhand ,a nasse twhe ni t comest oris kreductio ni ncro pproductio nactivities .

Fromth eabov ediscussion ,th efollowin gtw oclassificatio n variableslogicall yfollow : .Th eproductio ncapacit yo fth efarmholdin g determiningth e extentt owhic hth ehousehol di scapabl eo fproducin genoug h incomethroug hself-controlle d agriculturalactivitie st o meetth esubsistenc erequirement so fth efamily ; .Th efamil ylif ecycl estag edeterminin gfamil ylabou r availability,th eminimu mincom erequirement so fth e household,an dth erati oworkers/consumer sdeterminin gth e extentt owhic hindividua lhousehol dmember shav et oproduc e asurplu sabov eow nsubsistenc erequirements .

5.3.1 Productioncapacit yo ffar mholding s Defininga meaningfu lmeasur eo fth eproductio ncapacit yo ffar m holdingsi sdifficul tfo rthre ereasons .First ,give nth eearlip r discussedheterogeneit y inlan dqualit ydu eaccoun tshoul db e givent opossibl edifference si nproductivit ybetwee nth evariou s landunits ,i.e. ,th esiz eo fth efarmholdin gi sa nimperfec t measurefo rth eproductio ncapacit yo fth efarmholding .Second , underchangin gtechnologica lconditions ,existin gdifference si| i productivity betweenlan dunit sma ychang ei ncas ene w agriculturaltechnologie sar eonl ysuitabl efo ra particula rtyp e ofland .I nth epresen tcase ,th eintroductio no fdoubl eric e croppinginitiall yaffecte donl yth epartiall yirrigate darea san d ata late rstage ,wit hth eintroductio no fdr yseeding ,onl yth e relativelyfavourabl ypositione drainfe d fields.Third ,t ob e relevantwithi nth econtex to fdeterminin gth eproductio ncapacit y oflan dholdings ,lan dproductivit y shouldb edefine d ineconomi c termsrathe rtha ni nterm so fphysica lproductivity .This , however,prevent sa rigorou sassessmen to fproductio ncapacit ya s economicconditon sdiffe rbetwee nhouseholds .

Thedistinctio nbetwee nphysica lan deconomi cproductivit yi sa n importantone .A nexac tmeasur eo fproductivit y isprovide d by'th e potentialphysica lproductio npe runi to fland .Physica llan d productivityi sdetermine db ya numbe ro fphysica llan d characteristicssuc ha ssoi ltype ,soi lfertility ,wate rretentio n anddrainag ecapacit ya swel la sth etyp eo fagricultura l technologyused .Technolog yinclude sbot hth etyp eo fcrop sgrow n andth etyp ean dleve lo fapplie dcro pinput ssuc ha slabou ran d cashinputs .I ncas eagronomicall yth ebes tcro pproductio n technology isused ,th eresultin goutpu tleve li scalle dpotentia l physicalproduction . Ill Potentialcro pproductio nha softe na limite dmeanin gwhe n economicconsideration sar etake nint oaccount .Dependin gupo n inputprice san dothe rcos tfactors ,th eeconomicall yefficien t grossoutpu tleve lwil lusuall yb emuc hlowe rtha nth eleve lo f potentialproduction .I nfact ,i ti spossibl etha tlan duni tA ha s ahighe rphysica lproductio npotentia ltha nlan duni tB ,bu ti s economically lessproductiv etha nB i finpu tprice san dothe r costsar etake nint oaccount .Similarly ,farmer sfacin gdifferen t coststructures ,budge tand/o rothe rconstraint st oproductio nma y evaluateth eeconomi cproductivit yo fvariou slan dunit s differently.Fo rexample ,.economi clan dproductiyjut ywil lb e influencedb y<~ hQ*"yp po f1ar H fturearrangemen ta swel la s differencesjnjroduction^cos tdu et ovaryin gdistance so ffield s fromjzhehomestead -.Anothe rclea rexampl ei sfoun di nth e productivity ofuplan dan dsideslop efields .Farmer swh oar eno t growingth ever yprofitable ,bu tinpu tintensiv edagma yo nthes e fields,rat ethe ma slo wproductive ,wherea sdagma ygrower s considerthe ma sproductiv eo reve nmor eproductiv etha nlowlan d ricefields .Hence ,a physica lcro pproductivit y indexi susuall y notmeaningfu lwithi nth efarmers 'context ,no teve ni na relativ e sense.

Undercondition so fa perfec tlan dmarket ,lan drent susuall y providea goo dprox yvalu efo rdifference si neconomi c productivity betweenlan dtype so fdifferen tquality .However ,th e landmarke tfo rthi svillag ei sfa rfro mperfec t (Section5.1.1) . Iti sa highl ypersonalize dmarke twher esocia lrelation sbetwee n tenantsan dlandowner sar eofte nmor eimportan ti ndetermin grent s thanproductivit y factors.A nalternativ emetho d todetermin e economiclan dproductivit y ist ous eactua lcro pproductio ndata . Figure5.3. 1 presentsth erange so fne treturn spe rhectar eo f cropproductio nactivitie sb ylan dtyp egrou pfo rthre eproductio n seasons(Fo ra descriptio no fth evariou slan dunit sse eSectio n 5.1.1).The yrepresen tare aweighe daggregate so fal lcrop s cultivatedo nindividua lfields .Ne treturn sar ecalculate da s grossreturn sminu sal lvariabl eproductio ncosts ,includin ga n imputedvalu efo rfamil ylabou rcost .Price sar edeflate db yth e VPP-index.Th eend-point so fthes erange sar eth emea nvalue so f thewors t2 5pe rcen toutcome san dth ebes t2 5pe rcen toutcomes , respectively.Thi slatte rretur nvalu eca nb econsidere dt o representth epotentia leconomi cproductivit yo flan dgive nloca l costso fproductio nan dmanagemen tconditions .A 'modal'valu efo r therang ei scompute da sth emea no fth emi d5 0pe rcen toutcomes . Withinyea rdifference si nreturn sar eprimaril ydu et o differencesi nth etyp eo fcrop sgrow n(e.g .dagma yi nuplan dan d sideslopefields) ,th ecroppin gintensit y (e.g.doubl eric e croppingi nlowlan dareas )an dinpu tlevel s(e.g .fertilizer) . Betweenyea rdifference si nretur nrange sexemplif ydifference si n growingseaso ncondition s(e. gfailur eo fdoubl eric ecrop so n plateauwaterwa yfield si n1979-80 )an dth eeffec to fchangin g croppingpattern s(e.g .increas ei ndoubl eric ecroppin go n irrigated fields). 112

Upland

Sideslope

Plateaurainfe d

Plainrainfe d

Plainwaterwa y

Plateauwaterwa y

Irrigated 1978-79 1979-80 1980-81 min average

200 400 600 800 1000 ($)

Fig.5.3. 1 Averagene treturn san drange so fne treturn spe r hectareo fcro pproductio n activitiesb ylan duni t ($/ha)

Figure5.3. 1 showstha teconomi cproductivit ydifference sbetwee n landunit sar esubstantial .Becaus ethe yar einfluence db y technologicalchange sove rtim ea swel la sb ydifference si ncro p choicean dcro pinput swithi nyears ,i ti sdifficul tt odefin ea generallyapplicabl elan dproductivit ymeasur etha tca nb eused!t o determineth eproductio ncapacit yo flandholdings .Althoug hi t would bepossibl et odetermin ea 'potentialeconomi cproductivit y index',suc hinde xha slittl ebearin go nth eproductio nsituatio n ofmos tfarmers .I tobviousl ycanno tb euse da sa standar dt o determineth elikel ycro pproductio noutpu to ffarms .

Asth eprincipa lai mo fth elan dproductivit y indexi st o determineth ehousehold' sabili^jL..tO-..CQyer_basi csubsistenc eneed s throughcro pproductiori~activitie sa tth estarto Tth e study"^ period,w eopte dfo ra mea neconomi cproductivit ymeasur efo rth e benchyea ro f 1978.Accordin gt orainfal ldat aan dfarmers ' informationthi syea rca nb econsidere dmor eo rles s 'normal'fBc m aproductio npoin to fview .Th emea neconomi cproductio ncapacit y offield si sdefine da sth eare aweighe d sumo fth emea nne t returnst ofamil ylabou ro fth evariou scrop sgrow no nsuc h 113 fields. Net returns to family labour are computed as gross crop output minus paid-out cost (e.g. hired labour and cash inputs). The mid 50 per cent of observations were used to calculate the net return values. Obviously, this will underestimate the production capacity of the better than average farm managers and/or richer farmers who may use higher levels of crop inputs compared to resource poor farmers. Thus, this will generally underestimate the ability of the households that already have excess subsistence capacity. Table 5.3.1 presents the various net return figures for the crop season of 1978 for the different land units.

Table 5.3.1 Income from crop production activities per hectare by land unit, middle 30% outcome observations ($/ha); 1978-79 No.o f Gross Family Grossmargi n obser­ crop Variable Gross labour to family Land unit vations income cost margin 1) income factors2 ) a. upland 42 294 133 161 103 264 b. sideslope 24 335 173 162 112 274 c.platea u rainfed 21 376 200 176 106 282 d.plai n rainfed 21 431 180 251 91 342 e.plai n waterway 28 533 210 323 74 397 f.platea u waterway 22 600 261 337 102 439 g. irrigated 16 704 288 416 140 556 1) Gross margin equals gross crop income minus all variable cost, including imputed wages for family labour (see family labour income). 2) Gross margin to family factors equals gross margin plus family labour income.

Theoveral lcro pincom eearnin gcapacit yfo rfar mholding swa s computedb yaggregatin gth ereturn st ofamil yfactor so fth e variousfield so fwhic hfar mholding sar ecomposed .Actua lfixe d landrent so rimpute dshar erent swer esubtracte d fromth e computedoveral lne tretur nt ofamil yfactors .I nvie wo fth e substantialdifference si nincom ederive d fromcro pactivitie si n uplandan dsideslop efield sdu et odifference si nth eare ao f dagmay,a nadjustmen twa smad ei nth etota lproductio ncapacit yo n thebasi so fth efarmers 'see dinventor yo fdagmay .Tabl e5.3. 2 showsth eresult so fth eabov ecomputations .I nth esam etable ,a comparisoni smad ebetwee nth ehousehold' scro pincom ecapacit y andth eactua lincom ederive d fromcro pproductio nactivitie s duringth e3-yea rperio do f1978-81 .O nth ebasi so fth e household'sexces scapacit yt ocove rbasi csubsistenc eneed swit h self-employed cropproductio nactivities ,a distinctio ni smad e betweensurplu san dnon-surplu shouseholds .O fth e2 5case-stud y households,1 1classif ya snon-surplus .

5.3.2 Thefamil ylif ecycl e Although,th eeffec to fth ecyclica ldevelopmen to fth efamil yo n householddecisio nmakin gwa srecognize db yChayano v (1925)a s earlya s1925 ,unti lrecently ,i treceive dmino rattentio ni nth e economicliteratur eo nfar mmanagemen tan dhousehol ddecisio n 114

Table5.3. 2 Netcro pIncom eearnin gcapacit y basedo ncultivate d areacro pseaso n1978-7 9

No.o f Grossmargi n dagmay Total Land Expectedne t Household house Farm tofamil y income gioss rent cropincom e Actualne t category -holds size factors adjust. capacity cost capacity cropincoir e (ha) ($) ($)D ($) ($) ($) ($) 2) Non-surplus:3 ) young 0.95 267(0.44 ) 4) 267 72 195(0.42 ) 207(0.51 ) middle-aged 0.90 324 (0.43) 332 82 250(0.39 ) 326 (0.48)

Surplus; young 1.65 532(0.24 ) 71 503 139 454(0.26 ) 548(0.24 ) middle-aged 2.32 BBS (0.20) 69 955 202 753(0.21 ) 753 (0.18) old 2.18 786(0.18 ) 28 812 153 659 (0.22) 556 (0.15)

mean 1.60 564 (0.49) 34 589 128 461 (0.52) 478(0.46 ) 1) Thedagma y incomeearnin gadjustmen t iscompute d as 'planted area1978-7 9• $608' . 2) Averagene t annualcro pincom et ofamil y factorsrealize d during thethree-yea rperio d of1978-81 . 3) Forth eclassificatio n ofhousehold sse eSectio n5.3.2 . 4) Figuresi nparenthese sar ecoefflcent so fvariation .

making.Th ebasi cidea sunderlyin gChayanov' sanalysi so fth ef&rm - householda sa 'labourfirm 'wer ediscusse d inSectio n3.1 .Her e thediscussio ni sconfine d toth einfluenc eo fth efamil ylif e cycleo na numbe ro fimportan thousehol dcharacteristics .

Onth ebasi so fth epresenc ean dag eo fchildre nan dthei r potentialparticipatio ni nth elabou rprocess ,a distinctio nca n bemad ebetwee nfiv ephase si nth edevelopmenta lcycl eo f households (Res,1983) : I. 'nochildren 1,earl ymarriag estage ; II. 'child-bearing':youn ghousehold swit hchildre nwh o areal l1 0year so fag eo ryounger ; 'child-rearing':middle-age d householdshavin g . III. childrenyounge rtha n5 year san dchildre n 10year so f agean dolder ; 'child-leaving':ol dhousehold stha tcompris echildre n IV. allabov eth eag eo f5 an don eo rmor echildre nwh o havelef tth ehousehold ; 'no-children' maturehousehold swit hn odependen t ina\fi children.

Thelif ecycl egroup sI an dV ar eno trepresente d inth esample . Thefirs tlif ecycl estag ei susuall yo fa ver yshor tduratio no r doesno toccur ,wherea sth elas tlif ecycl egrou pi scommonl yno t activelyengage d inagriculture .O fth eeleve nnon-surplu s households,fiv ear ei nth ecategor yo fyoun ghouseholds ,wherea s theremainin gsi xhousehold sca nal lb eclassifie da smiddle-aged . Ofth efourtee nsurplu shouseholds ,fiv ear eyoun ghousehold sa(i d anequa lnumbe ri smiddle-aged .Fou rsurplu shousehold sbelon gt o theol dhousehol dcategory .

Thepossibl eeffec to fth eexpansio nan ddeclin eo fth efarm - household sizeo na numbe ro fimportan thousehol d characteristics 115 isgraphicall y depicted inFigur e5.3.2 .First ,th eminimu mincom e requirementsfo rbasi csubsistenc ear edetermine db yth ehousehol d sizewhic hi ntur ni slargel ydependen to nth eag eo fth e household.Fo ryoun ghousehold sth eminimu mincom erequirement s willb erelativel ylo wbu twil lincreas esharpl yi nth ecours eo f thefirs tlif ecycl estage .Durin gth esecon dstag ethe yremai n moreo rles sconstant ,an dwil lsubsequentl ydeclin edurin gth e thirdstage .Minimu mincom erequirement sar edefine da sthos e requirementsnecessar yfo rdail ylivin gwhic har eculturall y accepteda sa minimu mstandar d ofliving .Fo rthi svillage ,thi s impliesa subsistenc eleve lwhic hi swel labov eth ebar eminimu m requiredfo rsustainin ghuma nliving .I tinclude ssuc hbasi c necessitiesa sfood ,clothing ,shelter ,elementar yeducation ,an d health.Th eannua lstapl efoo dintak ei nterm so fric e requirementspe rstandar d (adult)consume runi ti sestimate da t roughly 190k go fcleane drice .Although ,thi samoun ti swel l aboveth erequirement sestablishe d byth ePhilippin eFoo dan d NutritionResearc hInstitut ewhic hestimate srequirement sa tabou t 160kg ,i tshoul db erealize d thatth elatte restimat eassume s certainquantitie so fcomplementar y foodstuffssuc ha sfats ,oil , andsugar .I nth evillage ,thes eitem sar econsume dt oa muc h lesserexten ttha nrecommende d inth eofficia ldietar yallowanc e tables.A sindicate d byD eGuzma ne ta l (1974),suc ha situatio n

life cycle

I increasing family subsistence life cycle requirements 1squeez e

increase family labor availability II possible increase

i , faim size <1 increase schooling •> expenditures III

decline > family labor availability decline farm * IV 1siz ean dfamil y subsistence requirements

Fig.5.3. 2 Effecto flif ecycl e stageo nselecte d household characteristics 116 istypica l in rural areas of thePhilippine swher e in the absence of fat in daily meals,a diet containing a high intake of carbohydrate iscommo n due toth e consumption of a large quantity of rice.Apar t from themai n staple,dail y meals always comprise some kind of vegetable and - depending on the income of the household - fish.Othe r household necessities include kerosine or electricity for lightning, fuel formea l preparation, edibleoil , soap, clothing, etc.Expenditure s for housing include maintenance cost and repair.

The total annualminimu m income requirement per standard consumer unit in 1979 prices is estimated at roughly $80hal f of which is needed for riceconsumption .Thi samoun t excludes requirements for housing.Fo r individual years,actua l expenditures per consumer! unit may fall below this level as certain expenditures can be ; postponed for short periods (e.g.hous e repairs, clothing). However,a consecutive number of yearswit h expenditures below a level of $80 per consumer unit would endanger the functioning of the household. Thisminimu m income level isabou t equal to the official poverty line used by the Philippine Government, but substantially below the poverty line used for rural areas byUSAI D (USAID, 1980)o f roughly $150whic h is based on a poverty line figure for 1975 (inflated with a conservative 8 per cent increase in the cost of living). Table 5.3.3 shows theminimu m income requirements for the various household categories in terms of standard consumer units.I n the same table,th e crop income earning capacity of the household categories is given,als o in terms of standard consumer units.Th e subsistence coverage factqr is computed as the ratio 'minimum household income requirement/crop income earning capacity1. Based on the earlier definition,non-surplu s households have a subsistence coverage factor below one and surplus households aboveone .

Table5.3. 3 Numbero fstandar dconsume runit s (SCU)an dsubsistenc ecoverag efacto r(SCF )

Number of Subsistence Household standard Expected netcro p coverage 3) Actualmea n category cons,unit s income capacity 2) factor (SCF) SCF range annualSC F 4) (SCU units)1 )($ ) (SCU units) Non-surplus: young 3.84 195 2.44 0.70 (0.43) 5) 0.18 - 0.94 1.32 (0.27) middle 5.64 250 3.13 0.59 (0.42) 0.20 - 0.94 1.26 (0.33)

Surplus: young 2.62 464 5.80 2.18 (0.10) 1.87 - 2.50 2.97 (0.19) middle 6.56 753 9.41 1.47 (0.21) 1.11 - 1.83 2.10 (0.22) old 4.14 659 8.24 1.94 (0.23) 1.41 - 2.40 2.76 (0.08)

Mean 4.55 461 5.76 1.41 (0.54) 0.18 - 2.50 2.08 (0.38) 1) Astandar d consumer unit (SCU)i sbase do nth efoo d requirementso fa nadul t household member.Th eminimu m requirementsfo ra SC Uar eestimate da t$80 . 2) Thecro p income earning capacityi sbase do n1978-7 9far m sizesan di sderive di nTabl e5.3.2 . 3) Thesubsistenc e coverage factor (SCF)i sdefine da sth erati o 'minimum household income requirements/crop incomeearnin g capacity'. 4) Theactua lSC Fi sbase do nth eaverag e annualhousehol d income realized duringth ethree-yea r periodo f1979-82 . 5) Figuresi nparenthese sar ecoefficent so fvariation . 117 Figure5.3. 3 showsth edistributio no fsampl ehousehold sbot h accordingt oth eabov edefine d 'subsistencecoverag efactor 'an d thefamil ycycle .

Numbero fhousehold s |^fl young households

| |middle-age d households

old households

0 . Wr^^J/M.

0.5 1.0 1.5 2.0 2.5 subsistence coverage factor

Fig,5.3. 3 Distribution ofsampl e households according toth e'subsistenc e coverage factor'an dfamil y life cycle

Second,a searlie rdiscusse dth efamil ylabou rforc ei sdetermine d byth ehousehol d sizean dsex/ag ecompositio nwhic hi ntur ni s dependento nth estag eo fth ehousehol d inth edevelopmenta l cycle.Wit ha nincreasin g labourforce ,th eincom eearnin g capacityo fth ehousehol dwil lals oincreas eeithe rthroug ha reductioni nth eus eo fhire dlabou ro rthroug ha nincrease d participationi nth ewag elabou rmarket .However ,i ti simportan t totak eint oaccoun tth etim ela gbetwee nincreasin gconsumptio n requirementsan dth eexten tt owhic hfamil ymember sca nactivel y participatei nincom egeneratin gactivities .I nparticula rtoward s theen do fth efirs tlif ecycl estag eminimu mincom eneed sma y haveincrease dt oa hig hleve lwithou ta substantia lincreas ei n thehousehold' sproductiv ecapacit yi nterm so fth eavailabilit y offamil ylabou rfo rfar mo rwag elabou ractivities .Especially , forresource-poo rhousehold sthi si sa difficul tmanagemen tperio d (lifecycl esqueeze) .

Third,als oth etransfe ro fcultivatio no rownershi pright st o land fromparent st ochildre ni sgoverne d byth elif ecycl estage . Younghousehold susuall yreceiv ea par to flan dfarme db yon eo f theparents ,whil eth eparent scontinu et ofar mth eremainin g area.A sth eparent smov etoward sth een do fth ethir dlif ecycl e stage,the ywil lgraduall ytransfe ral lthei rus eright st olan d tothei rchildren .Thi susuall yoccur swhe nthei rchildre nar ei n thesecon dlif ecycl estage .Thus ,i ncas eparent sow nlan do r haveampl eus eright st oland ,th eincreas ei nth eavailabilit yo f familylabou roccurrin gi nth ehousehold so fthei rchildre n coincideswit ha nexpansio no fth efar mholdin gsize .

Fourth,wit hth eimportanc eattache dt oforma leducatio no f 118 children,ther ei sa nincreasin gpressur eo nhousehold st ospen d substantialamount so fcas ho neducatio na schilde ngro wolder . Startinga tth ebeginnin go fth esecon dlif ecycl estage , educationexpenditure sincreas edu et ohig hschoo lenrolment ,thu s atth esam etim eincreasin gtota lhousehol dexpenditure san d reducingth eincom eearnin gcapacit yo fth ehousehol da sth e familylabou rforc edeclines .Educatio nexpenditure sagai nsharpl y increasewhe nchildre nfinis hhig hschoo lan dmov et ouniversity .

Fifth,a tth een do fth esecon dan ddurin gth ethir dlif ecycl e stageparent sma ybenefi tfro mth eacquire d skillso fchildre ni n thefor mo fremittances .The yma yinvolv esubstantia lamounts , especiallywhe nchildre nhav ereceive duniversit ytrainin gan d workabroad . PATTERNSO FHOUSEHOL DRESOURC EUTILIZATION ,INCOM EFORMATIO N ANDEXPENDITUR E

Inthi san dsubsequen tchapter sresourc eutilizatio npattern so f surplusan dnon-surplu shousehold swil lb econtraste dand ,withi n thesecategories ,behaviou ro fhousehold sa tdifferen tlif ecycl e stages.I nth epreviou schapte ri twa sshow ntha teve nwithi na n apparentlyhomogeneou sclas so ffarm-households ,substantia l differencesoccu rbetwee nhousehold sbot hwit hrespec tt othei r capacityt oproduc eenoug hfoo dfo row nsubsistenc epurpose s throughself-employe dcro pproductio nactivitie san dth e availabilityo ffamil ylabou rpe runi tarea .Dependin go nth elif e cyclestag eo fth efamily ,household sals odiffe rwit hrespec tt o thepressur eo fgeneratin gextr aincom eabov ebasi csubsistenc e requirementsfo rth eeducatio no fthei rchildren .

Theke yquestio ntha twil lb eaddresse d iswhethe rhousehold stha t differwit hrespec tt osubsistenc eris ksensitivit yals odiffe r withrespec tt oth emanagemen to fthei rresource san dincom eflow s derivedfro mthes eresources .I nparticular ,attentio ni sfocuse d onth eissu ewhethe rhousehold swit ha hig hworker-lan d ratioar e ablet oemplo ythei rlabou rresource sremunerativel y soa st o guaranteea minimu mleve lo fsubsistence ,an dwhethe rsuc hi s positivelyo rnegativel yassociate dwit hrecen tagricultura l changesi nth evillage ,specificall ywit hregar dt oth e introductiono fne wric eproductio ntechnology .

Thetw oke yfactor sdeterminin gth eremunerativ eus eo ffamil y labouri nself-employe dagricultur ean dthu sth eviabilit yo f smallfarm-household san dthei rpronenes st osubsistenc erisk s are: thefamil ylabou rabsorptio ncapacit ype runi to fland ,i.e . towha texten tca nhousehold scontinu et oinves tfamil y labourpe runi to flan dwhil estil lrealizin gadditiona l output,an d theexten tt owhic hfamil ylabou rabsorptio ndepend so nth e qualityan dleve lo fcomplementar y inputsan dleve lo f agriculturaltechnology .

Inlin ewit hth eclassificatio no fnon-surplu shousehold shavin g insufficientcro pproductio ncapacit yt omee tsubsistenc eneeds , itca nb eexpecte d thatwhe nsuc hhousehold ssolel ydepen do nself - employedcro pproductio nactivitie semployin ga n'average-type ' productiontechnology ,the ywoul d facea sever esubsistenc eris k eveni nnorma lyears .Thus ,i ncas emarke tdeman d forlabou ri s limitedan dself-employe d incomeearnin gopportunitie sfo rlabou r outsideagricultur ear erestricted ,non-surplu shousehold sca nb e expectedt oexploi tthei rfamil ylabou rresource si nagricultur e toa fulle rexten tagains tlowe rreturn scompare d toriche r households.Thes ehousehold sar elikel yt oemplo ycro pproductio n strategiestha tdiffe rfro mth e 'average-type'i nth esens etha t 120 they areaime d atmaximizin g output to fixed family labour resources.Element s of such strategiesma yinclude :

. Substitution of asmuc h familylabour_j^_pjo^sJJilfi---f^x_JjipjJ :jts thaV_have-t"oZ^e~^ougnt_iirx)m^xfeTnaT^ources .B y minimizing tlie"paid-outcos t in production activities they will be able torais e the product accruing to the family labour force. Paid-out costminimizatio n may take various forms: family labour may be substituted for hired labour;crop s that allow an intensive use of family labour may be substituted for crops that heavily depend on external inputs;manua l activitiesemployin g family labour may replace the useo f machines (e.g.foo t threshing instead ofmachin e threshing) or externally purchased crop inputs (e.g.han d weeding instead of herbicides); . Increasing the cropping intensity per unit area.B y increasing tfrenumbe ro f cropso na givenuni t of land, householdsma y be able tomak ea mor e efficient useo f fixed family labourresources ; . Increasing the family labour input_p_er _cro p in self-employed croD_^roducti6n activities soa s to increase total output to fixed family labour~~resourcesb y raising average product par worker.

Thenatur e of household resourceutilizatio nan d activity patterns can best beunderstoo d through observation of the labour utilization pattern of thehousehold . In evaluating household labourutilizatio n patterns,th e specific character of the farm- household as both a unit of production and consumption should be accounted for (Section 3.1).I n Section 6.1, differences between household categoriesi n theallocatio n of labour todirec tan d indirect productive activities isanalyze d together with differences in the intensity of labour use and labour productivity inagriculture .Th e sourcesan d level of household incomea swel l as the level and pattern ofhousehol d expenditureswil l be discussed in Section 6.2.Sectio n 6.3 focuseso n thehousehold' s riskmanagemen t strategies,i.e. , thehousehold' sabilit y todea l with variations in income and expenditure flows.

6.1 Pattern of household labour utilization The total household labour utilization (including time expenditufe for both direct and indirect productive activities)fo r the two- year period 1979-81 is presented inTabl e 6.1.1 (1).O naverage, : households utilize family labour ata rateo f 78%o f the earlier calculated family labour availability.Th e latter figure isbase d on an averageworkin g day for full-time participants of 9hour s for 6 daysa week throughout the year.Husband san d wives contribute about equally to total family labour usea t about84 % of their calculated timeavailability .Thi samount s toa naverag e daily time expenditure of 7.4 hours during 6 days awee k throughout the year!Childre n contribute around 50%o f their available timewhic h isequa l to 27%o f the total household labour 121

Table 6.1.1 Annual household labour utilization bytyp eo flabou r for direct andindirec t productive activities (hours '000); 1979-81 - Non-surplus- — — Surplus Average young middle young middle old Total labourus e 6.97 6.14 6.76 6.09 7.80 8.06 Total family labourus e 6.55 5.94 6.65 5.60 7.23 7.33 husband 2.37 2.59 1.92 3.03 2.00 2.31 wife 2.28 2.67 1.60 2.56 2.04 2.53 children 1.90 0.68 3.13 0.01 3.19 2.49 Hired labourus e 0.42 0.20 0.11 0.49 0.57 0.73 Percent family labour utilization 1) 78? 88* 64* 96* 63* 79* husband 84* 92* 68* 108* 71* 82* wife 83)1 95* 68* 91* 72* 90* children 50* 62* 61* 5* 55* 68* 1) Family labourus ean dlabou r usepe rtyp eo flabou r aspercentag e oftota l labour availability. use. Theus eo fhire dlabou ri smino rwhe ncompare dt otota l household labouruse ,bu tma yconstitut ea substantia lportio no f thelabou ruse dfo rspecifi cactivities ,notabl yric ecro p production.

Inabsolut eterms ,tota llabou rus ei slowes tfo rth eyoun g J households,bu ta tth esam etim ethei rtim eexpenditur epe r j workingmembe ra sshow nb yth epercen to ffamil ylabou r 9 utilizationi shighest .Thi sindicate stha tbot hyoun ghousehol d categoriesar erelativel yshor to ffamil ylabour .Especially ,th e highlabou rinpu to fth ehusband so fth eyoun gsurplu shousehold s isstriking .Mos thousehold si nthi scategor yar ea ta ver yearl y lifecycl estag ean dhav echildre ntha tar estil lto oyoun gt o participatei nth elabou rprocess .Hence ,activitie scommonl y carriedou tb yyoun gchildre nsuc ha sbab ysitting ,hous e cleaning,fetchin gwater ,etc. ,hav et ob ecarrie dou tb yth e parents.A sth ewif ei soccupie dwit hth ecar efo ryoun gchildren , manyo fth ehousehol dchore shav et ob ecarrie dou tb yth e husband.Thi sapplie st oa lesse rexten tt oth eyoun gnon-surplu s householdswher echildre nalread ytak eove rsom eo fth ehousehol d chores.Bot hmiddle-age dhousehol dcategorie shav eth elowes t familylabou rutilizatio nrate .I nparticular ,th elabou rinpu to f husbandsan dwive si ssubstantiall y belowtha to fth eyoun gan d oldhouseholds .Thi si spossibl edu et oth ehig hparticipatio no f childreni nth elabou rprocess .

6.1.1 Labourallocatio n Allocationo flabou rt oth evariou sdirec tan dindirec tproductiv e activitiesi spresente di nTabl e6.1.2 .Al lhousehold sspen da relativelylarg epar to fthei rtim eo nindirec tproductiv e activities,64 %o naverage .Especially ,youn ghousehold ssho wa hightim eexpenditur efo rthes eactivities .Th eyoun gsurplu san d non-surplushousehold sspen d72 %(! ) and67% ,respectively ,o f theirtim eo nindirec tproductiv eactivities .Excep tfo rth eol d householdcategory ,absolut etim eexpenditur efo rindirec t 3 - WIlfE S

2 _ rm £ 1 _- *r;

CHILDREN My IIBJan. LEGEND W lllllll] wage labour crop production+ 1 HIRED • Other economic act. r.V.'.llivestoc kact . I 1 m carabao grazing Non-surplus households Surplus households [vXl home production Young Middle-aged Young Middle-agedOl d

Fig.6.1. 1 Time allocationt odirec tan dindirec t productive activitiesb ytyp e of labour input per households; annual averagepe r household category (1979-81)

J____ 123

Table B.I.2 Family labourutilizatio npe rtyp eo factivity ; 1979-81

-Non-surplu s- Surplus mean young middle young middle old

A.Direc tproductiv eactivitie s(hours ) 2379 197B 2B25 1562 2910 2620 (36) 1) (33) (42) (28) (40) (36) Labourus ea spercentag eo fA . Totalfar mproductio n 77 65 56 87 88 88 riceproductio n 25 19 23 24 32 23 othercro pproductio n 24 22 16 38 26 21 pigraisin g 18 11 9 25 21 27 livestockproductio n 10 13 8 - 9 17 Uagelabou r 10 21 23 - 2 2 Othereconomi cactivitie s 13 14 21 13 10 10

B.Indirec tproductiv eactivitie s (hours) 4169 3957 3B21 4047 4315 4710

Labourus ea spercentag eo fB . Grazingworkin ganimal(s ) 43 41 43 41 41 48 Homeproductio n 57 59 57 59 59 52

Totalfamil ylabou rus e(hours ) 5551 5933 B646 5609 7225 7330

1) Labourus ea spercentag eo ftota l family labourus e productiveactivitie sd ono tdiffe rmuc hbetwee nhousehol d categories.Th erelativel yhig hfigur efo rth eol dhousehol d categoryi sdu et oa highe rtim eexpenditur eo ngrazin gworkin g animalsbecaus esom eo fth ehousehold si nthi scategor yhav emor e thanon eworkin ganimal .

Duet othei rlowe rfamil ylabou ravailabilit yan dequa ltim e expenditureo nindirec tproductiv eactivities ,youn ghouseholds , andespeciall yth esurplu shousehold si nthi scategory ,hav ea muchlowe rfamil ylabou rinpu ti ndirec tproductiv eactivitie s compared toth eothe rhousehol d categories.Tim eallocatio nt oth e differentdirec tproductiv eactivitie svarie ssubstantiall y betweenhousehol dcategories ,wit ha pronounce dcontras t especiallybetwee nth esurplu san dnon-surplu shousehol d categories.Bot hth eyoun gan dmiddle-age d householdso fth e lattercategor y showa relativel yhig htim eexpenditur eo nwag e labouractivities ,wherea ssurplu shousehold sar ealmos tentirel y concentrating onself-employe d farmproductio nan dothe reconomi c activities.Surplu shousehold sar eals ofa rmor eactiv ei npi g raising,a nactivit ywhic hrequire sa relativel yhig hinitia lcas h investment.

Apartfro mth edifference sbetwee nsurplu san dnon-surplu s households,difference sals ooccu rbetwee nyoun gan dmiddle-age d households.Youn ghousehold sdevot emor efamil ylabou rt onon-ric e cropproductio nactivitie scompare dt oth emiddle-age dhousehold s thatspen drelativel ymor etim eo nric ecro pproduction .Th eol d householdstak ea positio ni nbetween .

Thetim eallocate db ydifferen tmember so fth ehousehol d toth e varioushousehol dactivitie si sdepicte d inFigur e6.1.1 .Th e effecto fchildren' scontributio nt oth elabou rproces si sclearl y visible.Du et oth evirtua labsenc eo fgrown-u pchildren ,ther ei s nochoic efo radul tmember so fyoun ghousehold sbu tt ospen da relativelyhig hpercentag eo fthei ravailabl etim eo nday-to-da y 124 indirectproductiv eactivities .Thi si sparticularl yvisibl ein ; thedifference si ntim eexpenditur eo fth ewives .Apar tfro mbein g heavilyinvolve di nindirec tproductiv eactivities ,especiall yth e husbandso fyoun ghousehold scontribut ea smuc ho rmor et odirec t productiveactivitie sa sth ehusband so fothe rhouseholds .

Asca nb eexpected ,th ehusband so fth eyoun gsurplu shousehold s concentrateentirel yo nself-employe dactivities ,wherea sth e husbandso fth enon-surplu shousehold sar eals oinvolve di nwag e labouractivities .Consequently ,tota llabou rinpu to fbot h husbandsan dwive so fth eyoun ghousehold si shigh ,especiall y whencompare d toth elabou rinpu to fmiddle-age d households.Th e relativelymino rcontributio nt odirec tproductiv eactivitie so f husbandso fmiddle-age d surplushousehold si sstriking .I n contrastwit hthei rcounterpart si nth enon-surplu scategory ,the y spendmuc htim eo ngrazin gth eworkin ganimal .

Fromth eabove ,i twil lb eclea rtha tyoun ghousehold sar ei na verytigh tlabou rsuppl ysituation .Compare dt oth emiddle-age d andol dhousehol dcategories ,the yar ei na muc hweake rpositio n toquickl ymobiliz elabou ri ncas efar mcondition smak esuc h necessary,e.g .du et oa nunexpecte dheav ywee dinfestation , replantingo fric ecrop safte ra drough tperiod ,etc .A swil lb e discussed inChapte r7 ,thi si son eo fth emai nreason sfo rthe$ e householdst orefrai nfro madoptin gdoubl eric ecropping .

6.1.2 Intensityo flabou rus ean dlabou rproductivit yi n agriculture Table6.1. 3 showsth ereturn spe rfamil ylabou rhou rfo rvariou s directproductiv eactivitie sa swel la sth epercentag eincom e derivedfro mthes eactivities .Livestoc kactivitie sar eno t included becauseo fth eseasonalit yo fproductio nan dth eproble m ofassignin ginput san doutput st ospecifi cyears .Self-employe d ricecro pproductio ni sclearl yth emos tremunerativ eactivit y withreturn spe rfamil ylabou rhou rtha tare ,o naverage ,85 % highercompare dt oth ereturn sfo rth enex tbes tactivity ,wag e labouractivities .Return spe rfamil ylabou rhou rfo rothe rself - emloyednon-far mactivitie sar esomewha tbelo wth ereturn sfo r wagelabou ractivities .O naverage ,roughl ythree-fourth so fth e incomederive dfro mdirec tproductiv eactivitie si scompose do f incomefro mcro pproduction .

Table6.1. 3 indicatestha tther ei sa shar pcontras ti nreturn s perfamil ylabou rhou rbetwee nsurplu san dnon-surplu shouseholds . Foral lactivitie stake ntogether ,surplu shouseholds—attai na Ipypl-nf family 1ahnn r produ^iv jt yw Mr. h, fi navpragp , istuir p (!) asjiigha stha to fth enqn-surpliis^ouseJioJLds .Thi simplie s thatnon-surpTusTiousehoid shav et oappl ytwic ea smuc hfamil y labourt oattai na ne toutpu tleve lcomparabl et otha to fsurplu s households.A relativel ylo wleve lo ffamil ylabou rproductivit y ofnon-surplu shousehold sapplie st oal ldirec tproductiv e activities.Apar tfro mrealizin grelativel ylo wreturn spe rlabou r 125

Table6.1. 3 Productivity offamil y labourfo rdifferen t typeso fdirec t productive activities; annual average 1979-81 -Non - surplus- -Surplu s mean young middle young middle old Self-employed crop production percento ftota l income 1) 72* 54* 55* 83* 84* 72* incomet ofamil y factors($ ) 466 209 326 493 771 533 family labour input(hrs ) 1148 807 1120 974 1682 1156 returnspe rlabou r hour ($cts/hr) 39.5 25.9 29.1 50.7 45.8 46.2 Waqe labour activities percento ftota l income 7* 19* 20* - 2* 2* incomet ofamil y factors($ ) 44 72 116 - 17 13 family labour input(hrs ) 238 419 650 - 67 52 returnspe rlabou r hour ($cts/hr) 21.4 17.2 17.8 - 25.4 25.0 Other economic activities percento ftota l income 9* 9* 18* 9* 6* 6* incomet ofamil y factors($ ) 59 33 106 55 54 48 family labour input(hrs ) 320 266 587 200 293 253 returnspe rlabou r hour ($cts/hr) 19.1 12.4 18.1 27.5 18.4 19.0 Total activities percento ftota l income 88* 82* 93* 92* 92* 80* incomet ofamil y factors($ ) 569 314 547 548 841 596 family labour input(hrs ) 1716 1545 2348 1173 2054 1461 returnspe rlabou r hour ($cts/hr) 34.4 20.3 23.3 46.7 40.9 40.8 1) Totalincom e derived from direct productive activities)excludin g grants,receipt so finteres t and rents, etc. hour, non-surplus households are alsomor e engaged in low productive activities such aswag e labour and self-employed non- farm activities.I n contrast with non-surplus households, surplus household categories derive a high percentage of their income from the high productive cropactivities .

Table 6.1.4 shows that households dono t employ labour at the same rate per hectare.Tota l labour use is distinctly higher for both middle-aged household categories compared to the other households. In fact,whe n compared to the family labour availability per hectare for direct productive activities (i.e., total family labour availability minus labour use in indirect productive activities), the data tend to support the hypothesis that labour investment per hectare in part dependso n the sizeo f the family labour force relative to the size of the farm area.Th emiddle - ag^d_jiQn=sui^jis_Jvo^eJioJJ^ategory clearly has the highest labour input per hectare,wherea s thejrojung,...surplushouseholds~sh75W~rrh e lowest la*BouT~inDut. inedat a also tend to confirm the hypothesis that households with a high rate of family labour availability per hectare employ hired labour at a lower rate compared to households with a low level of family labour availability per hectare.Famil y labour use_aspercentag e of totaj^labour_use per hectare isJ highes£.,.fox_t.h,emiddle-age d non-surplus category (91%)an d lowest for the-y_oung_^urplus^categorie s (63%). However,th e figures are not entirely consistent due"li b"th einfluenc e of financial constraints and possibly leisure preferences.Fo r example,on e would expect the young,non-surplu s households to employ hired 126

Table6.1. 4 Structureo fcro pproduction ; annualaverag e1979-8 1

-Non-surplu s- Surplus- Mean young middle young middle old

Totalfar m area (ha) 1.584 1.064 0.913 1.702 2.240 2.000

Giossretur n ($/ha) 534 376 560 582 627 519 Grossretur npe runi tcapacit y ($/$) D 1.14 0.84 1.16 1.33 1.27 1.08 Net returnt ofamil y factors ($/ha) 291 196 356 290 344 267 Net returnt ofamil y factors peruni tcapacit y ($/$) 1.06 0.72 1.24 1.18 1.21 0.96' Totallabou r use (hrs/ha) 1036 979 1348 910 1011 934 Net returnpe rlabou rhou r ($cts/hr)] 34.6 24.7 28.7 40.8 41.4 37.3

Total family labourus e(hrs/ha ) 777 758 1227 572 751 578 Net returnpe rfamil y labourhou r ($cts/hr) 39.5 25.9 29.1 50.7 45.8 46.2 i

Fertilizer andpest-/herbicid eus e ($/ha) 38 27 31 51 47 36

i 1) Inth eemploye d grossan dne tcro pincom ecapacitie sn oadjustmen t ismad efo rth edaojna y seed inventory (seeSectio n 5.3,Tabl e 5.3.2). labour ata higher rate compared to themiddle-age d surplus households.However , the former group of households is in a much weaker position to finance hired labour and is forced, by subsistence requirements,t outiliz e family labour at a high rate of family labour availability.

The,xaroaxativ ^ housjeiiQids_i s partly due to a high labour use per hectare (middle- aged non-surplus households)an d partly caused by a low gross return level per hectare (young non-surplus households).Th e young surplus households and middle-aged non-surplus households show an opposite input combination with respect to labour and cash inputs (fertilizer and pesticide)pe r hectare,bu t attain a very similar gross return per hectare.Wit h a substantially higher labour input per hectare compared to the young surplus households,th emiddle - aged non-surplus households are able to raise total output per hectare comparable to that of the young surplus households despite substantially lower levels of fertilizer and pesticide use.The , middle-aged surplus households have a relatively high labour input and complementary input level per hectare,an d they also attain the highest gross output level per hectare of all household categories. From these input-output combinations,i t can be tentatively concluded that,a t the aggregate farm level,th e possibility of inpiit-Riih.^iHrnj-in nexist s between labour and other farm inputs,o r more importantly between inputs requiring financing in cash or kind and inputs that can be supplied by the family itself.

Given thedifference s in the percentage of family labour use per hectare and returns to family factors perhectare ,i t can also be concluded that the possibility exists to raise the returns to fixed family labour resources through substitution of family for hired labour.B y supplying 91%o f the total labour use per hectare from family labour resources,middle-age d non-surplus households are able to attain the highest net return to family factors per hectare of all household categories,reachin g 64%o f the gross 127 returnpe rhectar ecompare d toa leve lo fslightl yabov e50 %fo r theothe rhousehol dcategories .

Theabov eindicate ddifference si nreturn spe rhectar ean dlabou r productivitycanno tb eexplaine d bydifference si nlan dquality . Onewa yo ftakin gint oaccoun tlan dqualit ydifference si st o expressth eactua lgros sretur nlevel si nterm so fth egros s productioncapacit yo ffar mholding sbase do nth eearlie r calculatedmea nproductio npotentia lo fth evariou slan dunit s (Section5.3) .I ncas elan dqualit ydifference swoul dfull y accountfo rdifference si ngros sretur nlevel spe rhectare ,th e ratiogros sreturn/productio ncapacity ,expresse da s 'grossretur n peruni tcapacity '($/$ )woul db eth esam efo ral lhouseholds .A s indicated inTabl e6.1. 4 thisi scertainl yno tth ecase . Differencesbetwee nhousehol dcategorie si nth eproductio n capacityo fth efar mholdin gar eno tsufficien tt oexplai ngros s yielddifferences .I nfact ,th egros sretur npe runi tcapacit y ratiosindicat esubstantia ldifference si nth eleve lo fresourc e exploitationbetwee nhousehol dcategories .Th eyoun gnon-surplu s householdssho wa ver ylo wgros sretur npe runi tcapacit yleve lo f 0.84,followe db yth eol dhousehol dcategor ywit ha rati oo f1.08 . Theyoun gan dmiddle-age d surplushousehold ssho wa hig hleve lo f resourceexploitatio nwit hratio so f1.2 7an d 1.33,respectively . Themiddle-age dnon-surplu shousehold stak ea nintermediat e position.A simila rpatter noccur sfo rth ene treturn spe runi t capacity,wit hth enotabl eexceptio no fth emiddle-age dnon - surplushousehol dcategory .Du et oa ver ylo wleve lo fpaid-ou t costs,th emiddle-age d non-surplushousehold sar eabl et oattai n thehighes tleve lo fne treturn st ofamil yfactor spe runi t capacity.

Returnst oric ecro pproductio n Totallabou rus epe rhectar epe rcro pfo rric ecro pproductio ni s strikinglysimila rbetwee nhousehol dcategories ,wit hth enotabl e exceptiono fth enon-surplu smiddle-age dhousehold stha thav ea relativelyhig hlabou rinpu t(Tabl e6.1.5) .A sindicate db yth e doubleric ecroppin grati oan dth epercentag eare ao ffirs tric e cropsunde rHYVs ,thi ssimilarit yi ntota llabou rinpu tpe r hectarepe rcro pcover ssom emajo rdifference si nric eproductio n technologyamon ghousehol dcategories .Middle-age dhousehold sar e growinga substantia lare aunde rdoubl eric ecrop susin gHYVs , whereasyoun ghousehold sar ecultivatin grelativel ylarg earea so f themor etraditiona lBE- 3variety .Whe ntransplanted ,BE- 3 requiresa substantiall y higherlabou rinpu tpe rhectar ecompare d todirec tseede dHY Vcrops ,72 0hours/h acompare dt o51 0hours/h a forHY Vcrops .Direc tseede dBE- 3crop srequir ea somewha thighe r labourinpu ttha nwe tseede dHY Vcrops ,wherea ssecon dric ecrop s havea labou rinpu tsubstantiall ybelo wtha to ffirs tHY Vcrops , becauseo flowe rlan dpreparatio nrequirements .Whe nth eactua l labourus epe rhectar epe rcro pi scompare dt oa naverag erat eo f labourus ebase do naverag elabou rinput spe rtyp eo fric ecrop , middle-agednon-surplu shousehold ssho wa hig hrati oo factua l labouruse/averag elabou rus eo f1.27 ,wherea sth eyoun gnon - 128

Table6.1. 5 Structureo flic ecro pproduction ;annua laverag e1979-8 1

-Non - surplus- Surplus Mean young middle young middle old

Area (ha):1s tric ecro p 1.317 0.914 0.811 1.288 1.917 1.657 (percentHYU ) (67) (50) (73) (48) (78) (84) 2ndcro p 0.3B7 0.107 0.352 0.238 0.871 0.365 Totalric eare a 1.704 1.021 1.163 1.526 2.788 2.022• Doublecroppin g ratio 1.28 1.12 1.43 1.18 1.45 1.22

Grossretur n ($) perhectar e 458 304 449 488 574 477 perhectar epe rcro p 357 272 313 412 395 391 Net return tofamil y factors ($) perhectar e 234 147 276 213 295 237 : per hectarepe rcro p 180 131 193 180 203 194 •

Total labourus e (hrs) perhectar e 731 599 929 677 766 686 per hectarepe rcro p 569 535 650 571 528 562 (actual /averag elabou ruse ) 1) (1.06) (0.S4) (1.27) (1.01) (1.03) (1.05) Net returnpe rlabou rhou r ($cts/hr) 41.1 31.8 33.1 45.1 49.6 45.8 '

Totalfamil y labourus e (hrs) perhectar e 472 407 810 293 480 368 perhectar epe rcro p 362 363 566 247 331 302 Netretur npe rfamil y labourhou r ($cts/hr) 53.7 36.1 34.1 72.6 61.5 64.4

Fertilizer andpest-/herbicid eus e perhectar e 40 25 30 54 49 40 perhectar epe rcro p 31 22 21 45 34 33

1) Thisrati oindicate sth eactua llabou rus epe rhectar epe rcro pt oa compute d rateo flabou r use based onaverag elabou rinput spe rtyp eo f ricecrop . surplushousehold shav ea labou rinpu tsomewha tbelo wth eaverag e levelshowin ga rati oo f0.94 .Th ehig hlabou rinpu tfo rmiddle - agednon-surplu shousehold si sprimaril ydu et oproblem s encounteredwit hdr yseede dHY Vcrop si n1979 .Poo rgrowin g conditionsnecessitate d aheav ylabou rinpu tfo rreplantin gan d weeding.Th eapparen tparado xtha tespeciall yyoun ghousehold s withlimite d familylabou rresource sgro wric evarietie san d employcro pestablishmen tmethod srequirin ga relativel yhig h labourinpu tpe rhectar epe rcro pwil lb ediscusse d inChapte r7 s.

Ofth etota llabou rinpu ti nric ecro pproduction ,o naverag e65 % issupplie db yth efamily .Excep tfo rth eyoun gnon-surplu s households,th epercentag eo ffamil ylabou rus eo ftota llabou r useclosel yfollow sth eearlie rindicate dfamil ylabou r availability perhectar efo rdirec tproductiv eactivities .I tis ; highestfo rth emiddle-age dnon-surplu shousehold s (87%),followe d byth emiddle-age d surplushousehold s(63% )an dol dsurplu s households (54%),an dlowes tfo rth eyoun gsurplu shousehold s (43%).

Becausedifference si nlabou rinpu tpe rhectar epe rcro par e i minor,th eobserve ddifference si nlabou rproductivit yamon g householdcategorie sar eprimaril ydu et odifference si ngros s \ returnspe rhectar epe rcrop .Gros sric eyield spe rhectar epe r: cropo fsurplu shousehold sar eabou tone-thir dabov ethos eo fth e non-surplushouseholds ,wit hth eyoun gnon-surplu shousehold s attainingth elowes tyiel dleve lo f$27 2pe rhectar epe rcrop . 129 Thehighe rgros syiel dleve lo fth esurplu shousehold sresult si n arat eo faverag ereturn spe rlabou rhou r (includinghire dlabour ) that,o naverage ,i sroughl y 1.5time shighe rtha nth ereturn spe r labourhou rfo rth enon-surplu shouseholds .Difference si ngros s yieldsan dlabou rproductivitie sar eprimaril ydu et odifference s inth eus eo fcomplementar yinputs .Bot hnon-surplu shousehol d categoriesappl yfertilize ra ta leve lsubstantiall ybelo wtha to f thesurplu shouseholds .Althoug hth edifference sbetwee n fertilizerlevel spe rhectar epe rcro pma yappea rminor ,th e resultinggros syiel ddifference sar esubstantial .Fo rexample ,i n thefertilize rapplicatio nrang eo f$2 0t o$30 ,eac hdolla ro f fertilizercontribute so naverag eabou t$ 6t oth egros syiel d (fertilizerrespons efunction swil lb ediscusse di nChapte r8) . Yielddifference sar eals odu et oth einclusio no flo wyield so f secondric ecrops ,particularl yaffectin gth eyiel dleve lo fth e middle-aged andol dhouseholds .Further ,th eyiel dlevel so fth e youngnon-surplu shousehold sar erelativel ylo wdu et othei r involvementi nwag elabou ractivitie searl yi nth eseaso n affectingtimel ymanagemen to fself-employe d riceproductio n activities.

Therealize dne tretur nt ofamil yfactor s(impute dcos to ffamil y labouran dresidua lprofit )i so naverag eroughl yhal fth eleve l ofth egros sreturn .Du et oa muc hlowe rus eo fhire dlabour , middle-agednon-surplu shousehold srealiz ea relativel yhig hne t returnt ogros sretur nrati oo f0.62 ,wherea syoun gsurplu s households,du et oa highe rrat eo fhire dlabou ruse ,hav ea relativelylo wrati oo f0.44 .Becaus eo fth elo wleve lo fpaid-ou t costfo rhire dlabour ,middle-age dnon-surplu shousehold sar eabl e torealiz ea ne tretur nt ofamil y(-owned )factor spe rhectar epe r cropabov etha to fth eyoun gsurplu shousehold san dcomparabl et o thene treturn so fth eothe rsurplu shousehol dcategories ,i n spiteo fa substantiall y lowergros sretur nlevel .Whe nw efurthe r considerth ehig hdoubl eric ecroppin grati oo fth emiddle-age d non-surplushouseholds ,th erealize dne treturn spe rhectar ear e- togetherwit hth emiddle-age d surplushousehold s- th ehighes to f thesampl ehouseholds .Du et oa lowe rus eo fhire dlabou rb yth e non-surplushousehold s- o naverag ewag erate sar ewel lbelo wth e averageretur npe rlabou rhou ri nric eproductio n- difference si n theproductivit yo ffamil ylabou rar eeve nmor epronounce dtha n differencesi nth eproductivit y oftota llabour .Surplu s householdsattai no naverag ea retur npe rfamil ylabou rhou rwhic h isalmos ttwic ea shig ha stha to fth enon-surplu shouseholds .

Fromth eabove ,i ti sconclude d thatth elabou rabsorptio n capacityo fric ecro pproductio no na nindiviua lcro pbasi si s limited.Th epossibilit yo fraisin goutpu tpe rhectar epe rric e cropthroug hth eapplicatio no fmor elabou ran da tth esam etim e loweringth eaverag eoutput~pe rworke rappeari~to~b emarginal '.Th e bulko flabou ruse di nric ecultivatio ni ssimpl yneede dt ocarr y outnecessar ytask ssuc ha slan dpreparation ,cro pestablishmen t andharvesting .Although ,a nextr alabou rinpu tmay ,t osom e extent,increas eyiel d (e.g.throug hbette rlan dpreparatio nan d 130 weeding), fertilizer soon becomesa limitin g factor.I nfact ,i t iscommo nt oobserv e that rice crops showinga relativel y high; labour inputar epoo r cropsaffecte d by,fo rinstance ,heav yweft d infestation, poor germination requiring replanting, etc., whereas crops showing lowlabou r inputsar eofte n good cropsunde r optical growing conditions.I ti sthu sno tunusua lt ofin d forindividua l cropsa negativ e relationship between theleve lo flabou rus ean d output inproductio n functions.However ,doubl e rice cropping allowsfo ra nincreas e inlabou r inputo na pe rhectar e basis.O f course,i nsuc h case,ric e cropsma ycompet e with thecultivatio n of other cropsan dt ob eeconomicall y attractive,return s accruing to family factors should beabov e thosefo ralternativ e crops.Th e relative attractivenesso fdoubl e rice versus other cropping > patternswil lb ediscusse d indetai li nChapte r 7.A secon d way•of increasing thefamil y labour inputi nric e productioni st oopt : for production strategies that allow fora minimu mo fhire d labour use.A sindicate d earlier,difference s among householdsi nth ei percentageo ffamil y labour intota l labour usear esubstantia l andmiddle-age d non-surplus householdsar equit e successfuli n reducing theus eo fhire d labour.

Returnst onon-ric e crops Total labourus epe rhectare_i n non-rice crop production is,on , average^ al5ear-40%--be*row"thelaTJouT~use~per 'hectare~^Trlcecrc> p j>riidiic£iQn.T ^ axe-^±t1leT""gTb"wn'bTrupIa7iafields oro nlowlan d fields beforean dafte rth ecultivatio no fric e cropsan dcompris ea larg e numbero fdifferen t crops.Som eo f these crops requirea hig h labour inputan dcomplementar y cash inputs (e.g.dagmay ,earl y season squash),wherea s other crops only require labourfo rseedin gan dharvestin g (mungbeansan d cowpea).Tota l labour usea swel la sfamil y labour perhectar ei s highest forbot h non-surplus household categories withth emiddle - aged householdso fthi scategor y having thehighes t labour input (Table 6.1.6).

Table 6.1.6 Structure of non-rice crop production; annual average 1979-81

- Non-surplus - Surplus - Mean young middle young middle old

Total farm area (ha) 1.584 1.064- 0.913 1.702 2.240 2.00Q

Grossretur n ($/ha) 151 115 161 213 136 124 Net returnt ofamil yfactor s($/ha ) 95 71 111 129 91 71

Total labourus e(hrs/ha ) 421 464 523 398 355 366 Net returnpe rlabou rhou r($cts/hr) ) 25.1 16.6 21.6 35.4 26.4 24.0

Total family labour use (hrs/ha) 376 406 507 350 340 273 Net return per family labour hour ($cts/hr) 25.8 17.4 21.9 36.8 26.8 26.0 Fertilizer and pest-/herbicide use ($/ha) S 6 4 10 5 iU

In contrast with rice production,labou r used innon-ric e crop activitiesi salmos t entirely supplied byth efamily , exceptfo r theol dhousehol d category.Th emiddle-age d households showth e highest percentageo ffamil y labourus eo ftota l labourus e(96£) , 131 followed byth eyoun g households (88%).Th eol dhousehold sus e hired laboura ta rateo f25 %o fth etota l labour input,primaril y for theharvestin g ofcrops .However ,whe n compared toth efamil y labour usei nric e production, both young households apply more family labourt onon-ric e crop activities.Especiall y theyoun g surplushousehold s concentrate their timeo nthes e activities with a family labour inputpe rhectar ewhic h isabou t20 %highe r compared toric e productiono na pe rhectar e basis.Middle-age d and oldhousehold s concentrate their timeo nric e production.

Fgj^_alljTojaseh^dSjJaJ)ou^ non-rice cropsar e much hplnwJ^hp-^LflhQirr_-E2IIHUl ct'iv it yaf~T lrp cf"!^^1^^^"^" in labour~~productivity between surplusan dnon-surplu s household categoriesfo rnon-ric e cropsar emuc h less pronounced comparedt o rice crops,excep t fora notabl y high labour productivity forth e young surplus households,O naverage ,return spe rlabou r hourfo r non-rice cropsar eabou t40 %belo w thoseo fric e crops,wherea s returnspe rfamil y labourar ealmos t halfo fthos eo fric ecrops , indicating thesubstantia l differencei nincom e earning potential between ricean dnon-ric e crops.Th erelativel y high returnspe r labour hour forth eyoun g surplus householdsar edu et oth e relatively large areaso fdagma y grownb ythes e householdsa swel l asth ehig h returnsobtaine d with early season squash cropsdu et o exceptionally highmarke t pricesfo rthi s crop duringth e observation period.Give n therelativel y weak relationship between labour productivity andlabou r inputpe rhectar ea swel la sth e high rateo ffamil y labourus ei nnon-ric e activities,i tappear s that these activities providea goo d potentialfo rfamil y labour absorption.

'.Summarizing^,th eabov e findings regardingth eintensit yan d pre4uet±vrtyo ffamil y labour support thevie w that neither labour inputsjjjfc oagricultur eno raverag e returnspe rlabou r hourar e equaljJThe intensity oflabou r usei spartl y dependento nth esiz e (of thefamil y labour force relativet oth esiz eo fth efar m holding,wherea sth eproductivit y oflabou r strongly dependso n thewealt h statuso fhouseholds .Bot h findings indicate that there aremarke t restrictions to(wage )labou ran dcapital .Middle-age d non-surplus households face serious problemsi nfindin g remunerative employmentfo rthei r labour.Thi s followsfro mth e relatively lowintensit y inth eutilizatio no ffamil y labour,th e high rateo ffamil y labour usepe rhectar e inbot h ricean dnon - ricecro p production,an dth erelativel y high labour inputi nlo w productive activities.Youn g non-surplus households face similar problemso flo wfamil y labour productivity buta ta hig h rateo f family labour utilization.Apparently ,underlyin g theselo wfamil y labour productivitiesar econstraint st oth eus eo fcomplementar y cash inputsan dpossibl y tohirin g wage labour.Further ,4y_e__t o

^hor^erin_suhsistenre_j)rjggsure.sI_yourig non-surjl us househol ds are forced to engage in wage labour activities^early in the season, thujS~Te3uclTTg^^ invest family; IaT)QufriS.~self- emplpyed cropnproclucTEi^ZSiSXvities and attend to crop management (opening and closing of bunds, monitoring weed arid"pest ~ infestation, etc.). 132 6.2 Household incomean dexpenditur epatter n Theabov eindicate ddifference sbetwee nhousehol d categoriesi n resourcecharacteristics ,resourc eallocation ,an dexpenditur e pressures(e.g .increasin gminimu mincom erequirement san d educationexpenditure sfo rth esecon dan dthir dlif ecycl estage ) areclearl yreflecte d inth esource san dleve lo fth ehousehold' s incomea swel la si nth eleve lan dpatter no fth ehousehold' s expenditure.T oprovid efo ra consisten tse to fdat agivin ga completepictur eo fbot hth ehousehold' sincom ean dexpenditur e pattern,table spresente di nthi ssectio nsho wannua laverage s coveringth etw oyea rperio do f 1979-81.Du et oth eearlie r indicatedrestriction so ndat acollectio n (Section 2.4), dataset s concerningfar mproductio nan dth ehousehold' sincom ean d expenditurepatter nar eno tentirel ymatching .A comprehensiv ese t ofproductio ndat ai savailabl efo rthre eproductio nseason s (1978-81),wherea smonthl yhousehol d incomean dexpens edat aar e availablefo rth ethre eyea rperio do f1979-82 .T osho wth e between-yearvariabilit yi nhousehol dincom ean dexpenditur e levelsdat acoverin gal lthre eyear swil lb epresented .

6.2.1 Householdincom e Table6.2. 1 presentsth emea nannua lincom eo fth edifferen t householdcategorie sb ysourc efo rth etwo-yea rperio do f1979-81 . Annualcro pproductio nincom ei scompose d ofincom et ofamil y factors(labou ran dprofit )derive d fromal lcrop splante di ntft e periodbetwee nApri l1 unti lMarc h31 .Incom et ofamil yfactor sli s definedt ob ene to fal lpaid-ou tproductio ncosts ,excep tfo r interestpayments .Fo rth ecomputatio no fcro pincom et ofamil y factorsse eAppendi xIII .Annua lhousehol d incomeexclude sincoal e derived fromth esal eo fassets ,excep tfo ra certai npercentag e ofincom ederive d fromth esal eo flivestoc kassets .Change sin [ assetholding swil lb ediscusse di ndetai li nSectio n6.3 .

Table6.2. 1 Structureo fhousehol d Incomeformatio n ($);annua l average 1979-81.

- Non-surplus - Surplus- -- . Clean young middle young middle old

Imputed income of family factors inagricultura l pioduction 545 282 365 545 844 681

Crop production 489 247 335 514 787 551 ricecrop s 320 135 225 274 567 393 other seasonal crops 148 74 101 219 204 140 perennial crops 21 38 9 21 16 18 Livestock 56 35 30 31 57 i3d

Earningsfro m wage labour activities 44 72 116 17 1 Imputed incomeo f family factors fromnon-agricultura l enterprises 59 33 106 55 54 49 Grant toth ehousehol d 84 2 18 207 193 Receipt ofren t 1 1 S Receipt of interest 3 7 2 2 S Transactioncos t -7 -3 -10 2 -18 -7 Other income 8 15 14 4 8

Total income:househol d 737 408 610 608 1106 -948 consumer unit 160 100 102 203 158 237 133 Annualincom efo rth eperio d 1979-81i s$73 7pe rhousehol do r$16 0 perconsume runi to naverage .Thi sincom eleve li stwic eth e minimumincom erequiremen t (Section 5.3).Househol dcategorie s differsubstantiall ywit hrespec tt oth eleve lo fincome .Tota l household incomei shighes tfo rth emiddle-age dan dol dsurplu s categories.Thei rincom ei sabou t60 %highe rtha nth eincom e levelso fbot hth eyoun gsurplu san dmiddle-age d non-surplus categories,an droughl y2. 4time shighe rtha nth eincom eo fth e youngnon-surplu scategory .However ,thi spictur echange swhe n incomesar edefine do na pe rconsume runi tbasis .Annua lincom e perconsume runi ti shighes tfo rth eyoun gan dol dsurplu s households,$20 3an d$23 7respectively .Th eincom epe rconsume r unito fthes etw osurplu scategorie si sabou ttwic ea shig ha s thato fth enon-surplu shousehold s- fo rth eyoun gan dmiddle-age d households,$10 0an d$102 ,respectivel y- an dabou t1. 5time s highertha ntha to fth emiddle-age d surpluscategor yo fhousehold s ($158).

Foral lcategorie so fhouseholds ,agricultur ei sclearl yth emos t importantsourc eo fincome .O naverage ,80 %o fth etota lhousehol d incomei sderive dthroug hactivitie stha tar edirectl yrelate dt o agriculture.Self-employe d ricecro pproductio ni sb yfa rth emos t importantsingl esourc eo fincom econtributin ga smuc ha s44 %t o thetota lhousehol dincome .Othe rseasona lcrop scontribut e another20 %t oth ehousehol dincom ebringin gth etota l contribution fromself-employe d seasonalcro pproductio n activitiest oa leve lo f64% .Othe rsource so fself-employe d agriculturalincom einclud eperennia lcro pan dlivestoc k activitiescontributin g 3%an d8 %t otota lhousehol dincome , respectively.

Inlin ewit hth eearlie rdiscusse ddifference si nlabou r allocation,househol dcategorie sdiffe rsubstantiall ywit hrespec t toth esourc eo fagricultura lincome .Surplu shousehold salmos t entirelyderiv ethei ragricultura lincom efro mself-employe dfar m activities.Th erelativel ylarg econtributio no fnon-ric eseasona l cropincom efo rth eyoun gsurplu shousehold sindicate sth e differentfar mmanagemen tpatter ncompare dt otha to fothe r surplushouseholds .Instea do fdoubl eric ecro pcultivation ,thes e householdsten dt oconcentrat eo nearl ypost-monsoo nnon-ric e cropsi nlowlan darea s(Chapte r 7).Als oth esubstantia lincom e derived fromlivestoc kactivitie sfo rth eol dsurplu shousehold s isstriking .Wome no fthes ehousehold shav eampl etim ean d financialresource st oengag ei npi gfattenin gan dbreeding .I n sharpcontras twit hth esurplu shouseholds ,bot hnon-surplu s householdcategorie sdepen dfo ra considerabl epar to fthei r agriculturalincom eo nwag elabou ractivities ,20 %fo rth eyoun g householdsan d24 %fo rth emiddle-age d households.Als oth e contributiono fincom efro mnon-agricultura lenterprise si shig h compared totha to fth esurplu shouseholds .Withou tth eincom eo f thesesources ,non-surplu shousehold swoul dno tb eabl et omee t essentialsubsistenc erequirement s(Sectio n6.2.2) . 134 Themai nothe rincom esource ,o naverag eaccountin g for11 %o fth e totalhousehol d income,i s 'grantt ohouseholds' .Thes e 'grants' mainlyconsis to fremittance so fchildre nemploye d inregula rjab s outsideth evillage ,e.g. ,governmen tjob si nth etow no rcit yoj r employmentabroad .Obviously ,becaus eo fth elif ecycl estage ,fo r younghousehold sthi sincom esourc ei snegligible .However ,th e differencebetwee nth emiddle-aged/ol d surplusan dnon-surplu s householdsi sstriking .Thes egrant sconstitut eo naverag ealmos t 20%o fth eincom eo fth emiddle-age dan dol dsurplu shouseholds , whereasthe yonl ycontribut e3 %t oth eincom eo fth emiddle-aged * non-surplushouseholds .I nabsolut eterm sth edifferenc ei seve n morepronounced :surplu shousehold sreceiv eabou tte ntime smore s incomefro mremittance so fchildre ntha nth emiddle-age dnon - surplushouseholds .

Clearly,thi sfindin gi sno tsurprising .Give nth elimite d availabilityo fothe rincom eearnin gopportunities ,surplu scro p productioncapacit yi sessentiall ya prerequisit e forinvestmen t ineducatio nan dthu sfo rth ecreatio no fthi ssourc eo fincome . Existingdifference si nincom eearnin gpotentia larisin gfro m differencesi nagricultura lresourc eendowment sbetwee nhousehold s willthu sb efurthe raccentuate d byth einabilit yo fnon-surplu s householdst osufficientl y investi neducatio no fthei rchildren . Moreover,simila rt olivestoc kproceeds ,thi sincom esourc eplay s animportan trol ei nstabilizin gth eincom eflow .I ncontras twit h theseasona lpatter no fcro pproductio nincome ,i tusuall y providesfo ra nindependent , regularincom eflow .Particularl ya t thestar to fth ecro pproductio nseaso nwhe nhousehold' sreserve s arelo wan dinvestmen trequirement so fagricultur ear ehigh , incomefro mthi ssourc ema ycontribut et oinvestment si ncurren t inputsi nagricultur ean dincreas eth ereturn st ocro pproductio n activities.

Minorincom esource sinclud ereceip±_oiL-r_enta lpayment sfo r(sub - rented)lan dan dreceip to finteres to nloans .I ti sinterestin g tonot etha tdespit ethei rtigh tbudge tsituation ,non-surplu s householdsstil llen dmone yo rric et oothe rhousehold sa s indicated byth einteres treceipts .Thi slendin g primarilyoccur s tohousehold si na simila rpoo rbudge tsituatio n (sharedpoverty) . However,interes tpayment so fthes ehousehold sar efa ri nexces s ofinteres treceipt s(Sectio n6.2.2) .Du et odifference sbetwee n theimpute dvalu eo fhom econsume dcrop s(fo rstorabl ecrop sbase d onth eannua laverag emarke tpric ean dfo rperishabl ecrop sbase d onth emarke tpric ea tth etim eo fharvest )an dactua lsal evalue s ofcrop ssol do nth emarket ,a nadjustmen tha dt ob emad ei ncro p incomeindicate d inTabl e6.2. 1 as 'transactioncost'. )

Giventh eimportanc eo fagricultura lincom esources ,i nparticula r seasonalcro pproductio nactivities ,househol dincom evariabilit y isprimaril ydetermine db yth eleve lo fcro pproductio nincome . Figure6.2. 1 presentsth eannua linput-outpu tstructur eo fcro p productionactivitie sfo rth ethree-yea rperio do f1978-81 .Th e grosscro pincom efigure srepresen treturn sfro mal lcrop splante d 135 in the period April 1unti lMarc h 31.Sinc e wear e primarily interested in the variability of income,th e input-output data of the 1978-79 and 1980-81 season are indexed with the 1979-80 season as base year (i.e., 1979-80=100). Of these years,th e crop season of 1979-80 experienced poor rice growing conditions.A prolonged dry spell late in the season affected both yields of the long- maturing BE-3 variety and growing conditions for the second rice crop. In contrast,th e 1980-81 season experienced excellent climatic conditions for rice cultivation with favourable rainfall for both first and second crop.Th e season of 1978-79wa s of an intermediate type.Thes e annual differences ingrowin g season conditions are clearly reflected in the level and type of crop income.

Vaj^a^ility_^inth e gross returnst oric e crop production is parjtix^laj^l^pTonoxnic^d_Tbl;-T?ieyj>un& .jioiL-r&uxpiu&-hojisehgIds , wTiereasth e patternTorthe otKer households is strikingly similar.Th e higher rice income variability for the young non- surplus households can be expected, given the problems they encounter inmobilizin g sufficient labour to remedy poor production circumstances.The y neither have excess family labour resources nor the cash to hire labour.Sinc e formos t households the variability in cost of production is less than the variability in gross production, the income to family factors ismor e variable than the gross income,wherea s profits (income to family factors minus the imputed cost of family labour)ar emor e variable than income to family factors.

The level of non-rice income appears to benegativ.ely„_correlate d with_jthe^ley^lc^^ice^cro p income.Excep t forth e young non- surplus households^ the pattern of variability in non-rice crop income is opposite the pattern of rice income.Thi s indicates that there are distinct opportunities in the crop production system to reduce crop income risk.Th e general mechanism is that a combination of rainfed lowland rice and non-rice crops on upland areas diversifies and reduces rainfall risks.I n case rainfall is good for lowland rice crop production, soilmoistur e and humidity conditions in the upland areasar e usually unfavourable, whereas the opposite applies to situations of poor rainfall conditions for lowland rice crop cultivation.T o some extent,maiz e planted before rice in lowland areas servesa similar purpose.I n case early season rainfall conditions are poor for rice,maiz e crops will usually mature and yield a good harvest.Essentiall y the same applies to late season rainfall with non-rice crops planted in lowland areas after rice.Becaus e of the negative covariance between rice and non-rice crop production, thevariabilit y in overall crop income is less pronounced than the variability of each crop component.

Figure 6.2.2 shows the annual differences in total household income per consumer unit for the three year period of1979-82 . Although between-year income differencesma y not appear to be very dramatic, for the non-surplus households,eve nmino r shortfalls in 136

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en a o CO en

a co en

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o o a a o o <»• (0 CM CO •a- 3 (SI CaM T— CM —* 137

on nt l-^l Ed Ul -i U) rH XI 11. r-t m 1-1 O r>- 7) CO ESSE m 01 r.oi in en (1 n rH (i en U J: :::::::: : i^ EZffli ' : J ill co -p -p •H 3 in 01 n 3 •H : m rH -p V^<+V\ m U. •H :v>i i 1-1 3 1 run "1 10 0) X) rH tn rn u o == |:::-:;:| •.•• i>- 01 X. ::x-x-i •'•B Ul 01 a 0) (1) in • 'ii 1 Ol UJ o u o ;:| a 00 rH r. 3 l-l u r- x> X) EE cc o 1 Ji ^^ ill u z r— Q. o a Q. O l-l (J o co en _) ^"•^ a "~ rH 0) Q. X) l-l rH CO 3 O : r-- in sz |:: :-:-x-:-:-:-[ co oi EST v- en en c 3 3 o 00 O £ p- >< CD -1 ^-^ <> n (1 n r co II -p n •i ni in n i n X) r rn m i rH •H r^ ^xT m c O m k**J—1£ o JZ (II c 01 r in 4-> m X) 3 * 01 U r m ^••••••\ Mm ESZ m cn .C •H t— 10 •H m I/) ni n III on rH rH (1 r r- -o Q. r o mm: m •o l-l ni in •H M •H si (II U E 0- 0- m •H (FV Tl n (II o 5 •H n o •P n co EHH cn «- D. n in 3 XI cn W rH ESSE cn i£ tn C\•J 10 8 8 3 in r cn o n co c x: in m^r 3 m co O •H ra01 >. b_ in i r i • 1 1 1 r 3 S s 138 ($) young non-surplus middle-agednon - households surplus households ISO. Legend

' I farm production QnmHI xage labor HHal off-farm employment V/M/A remittance childre* CS9H other income

1979 1980 1981 old surplus households

young surplus middle-aged ($)_ households surplus households 250 . -•

50

Figure 6.2.2 Composition oftota l household income perconsume r unit byyear ; averages perhousehol d category($ ) incomehav emajo rimplication sfo rth esurviva lo fth eunit , especiallyi ncas ethe yar eforce dt ohig hexpenditur elevel sdu e tosuc hunforesee nevent sa sdiseases ,funerals ,th edeat ho fa workinganimal ,etc .I nFigur e6.2. 2 alsoth eminimu msubsistenc e requirementpe rconsume runi ti sindicated .Fo rth enon-surplu s households,i nalmos tal lyear sth eincom ederive d fromself - employed farmproductio nfall sshor to fth eminimu msubsistenc e requirements.Thi sunderline sth enecessit yfo rthes ehousehold s toparticipat ei noff-far mactivities .I ncontrast ,fo rth e surplushousehold sth eincom ederive d fromself-employe dfar m activitiesi smor etha nsufficien tt ocove rminimu msubsistenc e requirementsfo ral lyears .

6.2.2 Householdexpenditur epatter n Thehousehol dexpenditur edat apresente di nTabl e6.2. 2 areannua l averagescoverin gth etw oyea rperio d fromApri l1 197 9unti l March 31,1981 .Becaus etota lhousehol dincom ea sdefine di n Section6.2. 1 includesincom efro mstandin gcrop splante d inthe ! periodbetwee nApri l1 an dMarc h3 1an dthu sma yinclud eincom e 139 fromstandin gcrop sobtaine di nth enex tseason ,tota lannua l household incomean dexpenditure sar eno tnecessaril ybalanced .T o allowfo rthi sdiscrepancy ,i twa snecessar yt oinclud ei n Table6.2. 2 anexpenditur ecomponen t 'cropincom etransfer* .Thi s figurei spositiv ei ncas eincom ederive d fromstandin gcrop sa t theen do fth eseaso nexceed sth eincom ederive d fromstandin g cropsa tth estar to fth eseason .Further ,becaus ehousehol d incomewa searlie rdefine dt ob ene to ffar mproductio ncos tan d thecos to fothe rincom egeneratin gactivitie s(excep tfo r interest payments),thes efigure sar eno tinclude d inTabl e6.2.2 . The^cos to fcro pproductio ni saccounte dfo ri nth erespectiv e productionaccount s(Appendi xIII) .

Table6.2. 2 Patterno fhousehol d expenditures ($);annua l average1979-8 1

- Non- surplus- Surplus- Average young middle young middle old

Homeconsumptio n of agricultural products 227 148 225 163 304 297 rice 190 122 178 144 244 264 other crops 37 26 47 19 60 33

Purchaseo fconsumptio n goods 362 203 316 228 577 484 food 218 158 204 173 344 210 clothing 30 14 28 25 47 37 household needsan d equipment 8 5 10 12 13 2 health needs 24 18 4 18 49 31 education 82 8 74 124 204

Interestpayment s 40 41 26 26 80 25 Grant from the household 17 6 5 35 15 27 Funerals and weddings 18 26 35 28 Crop incometransfe r 7 -2 3 30 2 -1 Savings (residual) 65 -14 33 126 94 83

Totalhousehol d expenditure 737 408 610 608 1106 946

Onaverage ,roughl y90 %o fth eearlie rdefine dannua lhousehol d incomei sdisposabl efo row nconsumptio no rinvestmen tpurposes . 'Disposableincome 'i sdefine da sth eincom ereceive d inth e periodbetwee nApri l1 an dMarc h3 1minu sexpenditure stha td ono t directlycontribut et oth esatisfactio no fconsume rneed so f householdmembers .Thes elatte rtyp eexpenditure sinclud einteres t payments,grant sfro mth ehousehold ,an dexpenditure sfo rfuneral s andweddings .Difference samon ghousehol dcategorie si ndisposabl e incomea spercentage so ftota lhousehol dincom ear eminor .Wit h 84% forbot hyoun ghousehol dcategorie sthe yar esomewha tbelo w thoseo fth eothe rhousehol dcategories .Fo rth eyoun gnon-surplu s householdsthi si sdu et orelativel yhig hexpense sfo rinteres t paymentsan dfunerals .Fo ryoun gsurplu shousehold si ti scause d byth ehig hleve lcro pincom etransfer .

Forth enon-surplu shousehold sinteres tpayment sfor ma relativel y importantexpenditur ecomponen ttakin gint oaccoun ttha tthes e paymentshav et ob emad eou to fth esurplu sincome .A larg epar t ofthes einteres tpayment sca nb eattribute d toloan sacquire db y householdst omee tsubsistenc eneed s(Sectio n6.3.2) .Grant sfro m 140 thehousehol d includegift si ncas ho rkin dt orelative so r (neigbouring)household si nnee do rar egive no ncertai noccasion s sucha sfuneral so rweddings .The yals oinclud econtribution st o villagefun draisin gactivitie sfo rth econstructio no r maintenanceo fpubli cfacilitie s(wate rsuppl ysystem ,stree t lighting).Thes egrant sar edistinctl yhighe rfo rth esurplu s householdscompare dt oth enon-surplu shouseholds .Although ,o n average,expenditure sfo rfuneral san dwedding sappea rminor ,fp r individualhousehold ssuc hexpense sma ypu ta sever eburde no nth e household budget.Th eminimu mexpense sfo ra funera lo rweddin g arei nth eneighbourhoo d of$150 .

Thehousehol dconsumptio nan dsavin gpatter nfo rth eperio do f 1979-81i ssummarize d inTabl e6.2.3 .Disposabl eincom epe r consumeruni ti s$14 2o naverage ,o fwhic h89 %i sconsume dan d £1% isinveste d inliqui dasset s(cas han dinventories )o rfixe d assets.Difference sbetwee nhousehol dcategorie si ndisposabl e incomepe rconsume runi tar esubstantial .Th edisposabl eincom e forth enon-surplu shousehold si sroughl yhal ftha to fth esurplu s households.I ti slowes tfo rth eyoun gnon-surplu shousehold sfo r whichi ti sroughl yequivalen tt oth eearlie rdefine d 'minimum subsistencelevel 'o f$8 0pe rannu man dhighes tfo rth eol d surplushousehold s($220) .

Theaverag eleve lo ftota lconsumptio no fth enon-surplu s households($88 )i sabou t58 %o ftha to fth esurplu shousehold s ($152).Tota lconsumptio ni shighes tfo rth eol dsurplu shousehol d category($198 )an dlowes tfo ryoun gnon-surplu shousehold s ($85).

Table6.2. 3 Householdconsumptio nan dsavin gpatter n ($/consumerunit) ; annualaverag e1979-8 1 -Non-surplu s- Surplus - Wean young middle young middle old Disposable income (D) 1) 142.4 81.6 95.6 174.3 140.0 220.3 Totalconsumptio n(C ) 126.5 85.4 90.5 132.4 126.6 197.7. homeproduce d 49.5 35.9 37.5 55.1 43.7 75.1 outsidepurchase s 77.0 49.5 53.0 77.3 62.9 122.8 Totalconsumptio n excluding educationexpenditure s (C) 109.7 83.3 78.2 132.4 108.9 145.7 Food consumption(F ) 96.2 74.5 71.2 113.8 93.1 128.21 Homeproduce d 49.5 35.9 37.5 55.1 43.7 75.1 rice 41.9 29.6 29.6 48.6 35.0 66.7 othercrop s 7.6 6.3 7.9 6.5 8.7 8.4 Outsidepurchase s 46.7 38.6 33.7 58.7 49.4 53.1 rice 9.5 14.9 13.9 5.0 10.0 3.9 non-rice 37.2 23.7 19.8 53.7 39.4 49.8 Propensityt osav e (1-C/D) B.9 -4.7 5.3 24.0 9.6 10.3 Propensityt osav e(1- C /D) 19.2 -2.1 18.2 24.0 22.2 33.9 Engelcoefficien t (F/0) 72.9 91.3 83.2 65.3 66.5 58.2 t Numbero fconsume runit s 4.8 4.1 6.0 3.0 7.0 4.0 1) Disposableincom ei sdefine da stota lhousehol d incomeminu sinteres tpayments ,grant s fromth ehousehold ,an dexpenditure sfo rfuneral san dweddings . 141 Theyoun gan dmiddle-age d surplushousehol dcategorie shav etota l consumptionlevel so f$13 2an d$127 ,respectively .Difference si n levelso fconsumptio npe rconsume runi tar eprimaril ydu et o differencesi neducatio nan dnon-ric efoo dexpense sincludin gsuc h itemsa sfish ,cookin goil ,soa pan dals opersona lnecessitie s sucha sdrink san dtobacco .

Theleve lo fric econsumptio ni sver ysimila ramon ghousehol d categories.Excep tfo rth eol dsurplu shouseholds ,household shav e riceconsumptio nlevel si nlin ewit ho rslightl yabov eth eearlie r determined 'standardric econsumption 1 of$4 3pe rconsume runit . Therelativel yhig hleve lo f$7 0fo rth eol dsurplu shousehold si s duet oth ehabi to fthes ehousehold st oprepar erathe rlibera l amountso fric et ob eabl et ooffe ra mea lt orelative so rfriend s incas ethe ypa ya visi tt oth ehousehold .Left-ove rric ei suse d asfoo dfo rdog san dpi gfattenin gan dbreeding ,a nimportan t economicactivit yo fth ewive so fth eol dsurplu shouseholds . Differencesi nnon-ric efoo dconsumptio nar esubstantia lmainl y duet odifference si npurchase d fooditems .Non-surplu shousehold s havepurchase so fnon-rjlcje. .fooeLj^tem sa ta naverag eleve lo f$2 2 whichi sles stha nhal ftha to fth esurplu shousehold s ($48).Bot h middle-aged categorieshav ea non-ric efoo dconsumptio nleve l whichi slo wrelativ et oth eothe rag ecategorie so fth esam e wealthstatus .Th eaverag epercentag eo ftota lfoo dconsumptio nt o totaldisposabl eincom e- give nb yth eEnge lcoefficien t- i s about73% .A sca nb eexpected ,th eEnge lcoefficien ti srelativel y highfo rth enon-surplu shouseholds .I ti shighes tfo rth eyoun g non-surplushousehold s (91%),followe d byth emiddle-age dnon - surplushousehold s (83%).Fo rth esurplu shousehold si ti s substantially belowthi slevel ,wit hth eyoun gan dmiddle-age d householdshavin ga nEnge lcoefficien to faroun d65% ,an dth eol d householdshavin gth elowes tcoefficien to f58% .

Alsoth edifference si npurchase dnon-foo ditem sar epronounced , particularly duet odifference si neducatio nexpenditures .O fth e totalconsumptio nexpenditure so fmiddle-age dhouseholds ,14 %i s spento nchildren' seducation ,wherea si treache sa hig hleve lo f 26% forth eol dhouseholds .Further ,non-surplu shousehold sspen d considerablyles so nclothin gan dhealt hcompare d toth esurplu s households. "

Table6.2. 3 clearlyshow sth esemi-subsistenc echaracte ro fth e villageeconom yan dth edependenc yo fhousehold so nmarkets .Al l householdspurchas ea larg epar to fthei rtota lconsumptio n requirementsfro moutsid esources .O naverage ,roughl y60 %o fth e totalconsumptio nan droughl yhal fo fth etota lfoo dconsumptio n ispurchase do nloca lo rurba nmarkets .Thes epurchase sinclud e household necessitiessuc ha ssoap ,cookin goil ,kerosine , electricity,fish ,etc ;persona lconsume ritem ssuc ha stobacc o anddrinks; -educatio nexpenses ;an dric epurchases .Th erati o consumptiono fhom eproduce d goodst otota lconsumptio ni sver y similaramon ghousehol dcategories .Th emiddle-age d surplus householdshav eth elowes trati o (35%),followe d byth eol d 142 household category (38%).Th eothe rhousehold shav ea rati oo f 42%.Aroun d 19%o fth eric econsume d ispurchased ,wit hth enon« - surplushousehold sa sth elarges tbuyers .Thes ehousehold shave!t o purchasearoun done-thir do fthei rric erequirements .Als oth e middle-aged surplushousehold sha dt opurchas ea larg epar t(22% ) ofthei rric erequirements .Th eyoun gan dol dsurplu shousehold s aremino rbuyer swit h9 %an d5% ,respectively .I tshoul db enote d thatalthoug hal lhousehold sar epurchasin ga par to fthei rric e consumption,thi sdoe sno timpl ytha thousehold sar eno tsellin g rice.Withi nan dbetwee nyea rshortage si neithe rric eo rcas h oftennecessitate salternatin g sellingan dbuyin go frice .Excep t forth eyoun gnon-surplu shousehol dcategory ,al lhousehold shav e anexces so fsellin gabov ebuyin grice ,rangin gfro ma nannua l$2 5 forth emiddle-age d non-surpluscategor yt o$18 8fo rth emiddle - agedsurplu shousehol dcategory .

The 'propensityt osave 'differ ssubstantiall ybetwee nhousehol d categories.I ti shighes tfo rth eyoun gsurplu shousehold s(24% ) andnegativ efo rth enon-surplu shousehold s(-5%) .Th emiddle-age d andol dsurplu shousehold shav esaving sa ta leve lo faroun d10% . However,i feducatio nexpenditure sar eals oconsidere d investments andinclude da ssavings ,th epropensit yt osav econsiderabl y increasesfo rth emiddle-age dan dol dhousehol dcategories .Th e averagepropensit yt osav efo ral lhousehold smor etha ndouble s from9 %t o19% .Th esaving so fth emiddle-age dnon-surplu s householdcategor yincrease st oa leve lo faroun d 18%,an dfo rth e middle-aged andol dsurplu shousehold si treache sa leve lo f22 % and34% ,respectively .

6.3 Household riskmanagemen tstrategie s Thislas tsectio nconcern sth ehousehold' sabilit yt odea lwit h fluctuationsi nincom ean dexpenditur eflows .Variation si nth e incomeflo wma yaris efro mth eusua lseasona lfluctatio no f agriculturalproductio na swel la sfro munpredictabl efluctuation s duet ouncertai nyields ,productio ncosts ,an dcommodit yprices . Unpredictablevariation si nth ehousehold' sexpenditur eflo wma ^ arisefro muncertai nproductio ncos tan dunforesee nhousehol d i expendituressuc ha shospita lan dothe rmedica lexpenses ,cos tp £ funerals,etc .

Householdsma ydea lwit hincom evariabilit yan dth eassociate d , subsistenceris ki ntw odifferen tways .First ,the yma yattemp tt o reduceth evariabilit yo fth eincom eflo wa smuc ha spossibl e throughth eselectio no fincom eearnin gactivitie swit hlo wbut : relativelycertai nreturn si nfavou ro factivitie stha tma y ' producehighe rreturn sbu tals ohav ea highe rris ko fver ylo w outputlevels .Second ,household sma yselec tth elatte rtyp eo f activities,thu schoosin ga highl yvariabl eincom epattern ,bu t attemptt odiffus eth epossibl enegativ econsequence so fsuc hris k takingstrateg ythroug hris kdiffusio nmeasures ,eithe rb yow n means(e.g .reserves )o rthroug hth einvolvemen to fothe rpartie s (e.g.credit) .I ncas ehousehold shav eadequat emean so fris k 143 diffusion,ris kavers eattitude sar eno tnecessaril ytranslate d intoris kavers ebehaviou ri nth echoic eo fincom eearnin g activities.

Ofcourse ,i nbetwee nthes etw oextreme sar enumerou scombination s ofbot htype so fmeasures .I nfact ,ris kreductio nstrategie sar e oftena ninheren tfeatur eo fexisting ,well-prove nproductio n systems.A well-know nexampl ei sth espreadin gan ddiversificatio n ofactivitie sacros sspac ean dtim ea swel la sbetwee n agriculturalan dnon-agricultura lenterprises .Ris kreductio ni n ricecro pproductio nwil lb ediscusse da tlengt hi nChapte r7 . Thissectio nfocuse so nris kdiffusio nmeasure sa tth ehousehol d level.Th emai nissu etha twil lb eaddresse d isb ywha tmeasure s householdsovercom eperiod swhe nth ehousehol d incomefall sshor t ofexpenditure san dwhethe rthes emeasure sar eeffectiv ei n preventingo rreducin gth eoccurrenc eo fseriou ssubsistenc e crises.

Thissectio nwil lstar twit ha discussio no fris kdiffusio n measurestha tar eunde rth econtro lo fth ehousehold . Subsequently,measure srequirin gth ecooperatio no fothe rpartie s willb edeal twith .A nassessmen to fth ehousehold' ssensitivit y toincom erisk sconclude sthi ssection .

6.3.1 Householdmean so fris kdiffusio n Therear etw oprincipa lway sb ywhic hhousehold sma yinternall y overcomea shortfal li nincome .Keepin greserve si sa commo nmean s bywhic hhousehold scop ewit hseasona lan dbetwee nyea r fluctuationsi nincomes .Th ehousehold' sprimar yai mo fkeepin g reservesi st oensur etha tsubsistenc edemand sca nb eme to na day - to-daybasi san dtha tcas ho rkin dca nb egenerate dtimel yan d efficiently inorde rt omee tcas ho rkin ddemand sfo ragricultura l inputsan dconsume ritems .I ncas ereserve si ncas ho rkin dar e notsufficien tt oovercom eincom eshortages ,household sma y attemptt ocu tbac ko rpostpon ecurren thousehol dexpenditures .

Reductioni ncurren texpenditure s Anobviou shousehol dmeasur ei st ocu tbac kcurren texpenditure s inconsumptio nan dreduc einput si nproductio nactivities . Expenditureso nluxuriou sitem ssuc ha scigarettes ,sof tdrink s andothe rbeverages ,bu tals oth econsumptio no ffish ,mea tan d otherpurchase dconsume ritem sar ecommonl yreduce dt oalmos tzer o levelsi nsituation so fsever ecas hshortages .Household sma yals o changeth edie tfro mric emeal st oric emixe dwit h(cheaper )cor n orma yski pon eo fth edail yric emeal san dsubstitut ei twit h plantaino rcassava .I nsever ecases ,eve nth enumbe ro fdail y mealsi ssometime sreduced .Similarly ,educatio nexpense sca nb e reducedb ywithdrawin gchildre nfro mschool .However ,a si tma y implya los so fearlie rinvestments ,suc ha decisio ni sno ttake n lightly,particularl yno twhe na chil dha sbee na tschoo lfo ra numbero fyears .Further ,household sma ylimi tth eexpense sfo r celebrationssuc ha sth eannua lvillag efiesta . 144 Forhousehold slivin gnea rth esubsistenc eleve lo fliving ,the . scopefo rreductio ni nexpenditur elevel sthroug hth eabov eris k diffusionmeasure si sclearl ylimited .A sindicate dearlier ,th e non-surplushousehold sar ei nsuc ha tigh tbudge tsituatio ntha ta reductioni nconsumptio nexpenditur ei svirtuall yimpossibl e withoutendangerin gth enorma lfunctionin go fth ehousehold .Thi s appliesparticularl y toth eyoun gnon-surplu shouseholds ,tha t+- giventh elimite dnumbe ro fconsume runit s- hav eles sbuffe r capacity,wherea swit hver yyoun gchildre nth eincidenc eo f diseasesi smor elikely .I nfact ,i n198 0suc ha situatio n occurredwhe ntw ohousehold sexperience d thedeat ho fa child , causinghig hexpense sfo rth efunera lan dth eforce dsal eo ffixe d assets.

Householdsma yals opostpon eexpenditure stha tar edu et ob emade . Forexample ,necessar yhous erepair so rothe rmaintenanc e activities (e.g.ne wroofing )ma yno tb ecarrie d out,childre nma y notb esen tt ohig hschool ,o rforma lwedding sma yb epostponed . Itals ooccur stha thousehold sdefe ra par to fth elan dren t paymentunti lth enex tseason' sharvest .Thi si susuall yaccepte d byth elandowne r (withoutinteres tcharges )i ncas esuc hi sdu et o circumstancesbeyon dth econtro lo fth ehousehold .O fcourse ,thi s isparticularl y importantfo rhousehold swit hfixe dren t arrangements.Non-repaymen to fdu eloa namount si sanothe r importantwa yo fpostponin gexpenditures .I nsuc ha case ,i ti s usualonl yt opa yth einteres to nth eloan .Finally ,a sa las t resorti na ver ysever esubsistenc ecrisis ,i ti sno tuncommo nt o askothe rhousehold st otak ecar eo fon eo rmor eo fth echildren , thussubstantiall y reducingth ehousehold' sconsumptio n requirements.

Reservemanagemen t , Themanne ri nwhic hhousehold sten dt odea lwit hbetwee nyea r variationsi nincom ean dexpenditur elevel sthroug hreserv e managementan dth eimportanc ethe yattac ht okeepin greserve stha t arei nexces so fnorma ldail ysubsistenc erequirement si sbes t seeni nth ehousehold' s(dis-)savin gan d(dis-)investmen tpattern .

Table6.3. 1 presentsth ehousehold' stota lne tinvestment si n assetsdurin gth ethre eyea rperio do f 1979-82.Apar tfro mth e earlierdefine dasse tcategorie s(i.e. ,fixed ,financial ,an d ; inventoryassets ;se eSectio n 5.1.3), alsoeducatio nexpense sar e includedher ean dtreate da sinvestment si nhuma ncapital .Price ; increases,depreciatio no fassets ,an dadditio nt olivestoc k assetsdu et onatura lgrowt han dbirt hi sno taccounte d for.Thes e adjustmentswil lb emad ei nth etota lasse tbalance stha tar e presentedi nSectio n6.3.3 .Durin gth ethree-yea rperio do f1979 - 82,household srealize do naverag ea ne tinvestmen to f$57 1pe r householdo r$12 8pe rconsume runit .Positiv ene tinvestment s total$64 3an dar emad ei neducatio n (43%),ric estock s (22%), houseconstructio n (16%),repaymen to fborrowe d funds (5%),an d lendingcas han dric et oothe rhousehold s (7%).Investment si n farmequipmen tan dconsume rdurable sar elow ,a ta leve lo f3 % 145

Table 6.3.1 Pattern of total net Investments for the three-year period 1979-82 ($) -Non - surplus- Surplus Average young middle young middle old Rice inventory 140 27 41 384 234 14 Fixed capital 77 -54 32 178 154 73 Farm assets -52 -101 -17 -75 16 -84 farm equipment 20 7 5 13 47 28 livestock -61 -116 -22 -88 -31 -50 land -11 8 -62

Household,asset s 129 47 49 253 138 157 house construction 105 37 26 207 104 152 consumer durables 24 10 23 46 34 5 Financial assets 81 37 -25 36 127 232 casho nhan d 4 4 5 -2 -1 16 borrowed funds 32 33 -39 5 111 51 lending 45 9 33 17 165 Education 273 19 279 476 591 Deflationo fcas h assets 0 1 5 -14 17 -10 Total investments 571 29 327 598 991 910 (perconsume r unit) (128) (7) (57) (193) (144) (240) positive 653 145 388 688 1023 1022 negative -82 -116 -61 -90 -32 -112 and4% ,respectively .Negativ einvestment si nasset soccu rfo r livestockan dlan ddu et oth ene tsale so flivestoc kan dth e returno fpledge d landt oowners .

Bothinvestmen tlevel san dth etyp eo finvestmen tdiffe r substantiallybetwee nhousehol dcategories .Youn gsurplu san dol d household categorieshav eth ehighes tinvestmen tleve lpe r consumerunit ,followe db yth emiddle-age d surplushouseholds .Non - surplushousehold ssho wne tinvestment ssubstantiall y belowth e levelo fth esurplu shouseholds ,wit hth eyoun gnon-surplu s householdsshowin galmos tn oadditio nt oasse tholdings .

Allhousehol dcategorie si nth esampl esho wa nincreas ei nric ei n stock.Ne tinvestment si nric estock sar elarg efo rth eyoun gan d middle-aged surplushouseholds .Althoug hth ene tinvestmen ti n ricestock si slo wfo rth eol dhousehol dcategory ,th etota lstoc k atth een do fth einvestmen tperio d (March1982 )i sa shig ha s thato fth emiddle-age dan dyoun gsurplu shousehold sbecause , comparedt othes ehouseholds ,initia lstock si n197 9wer emuc h higher.Whe ncompare d toth etota lpositiv einvestment ,th eyoun g surplushousehol dcategor yinvest smor etha nhal fo fth eamoun ti n riceinventories ,followe db yth emiddle-age d andyoun gnon - surplushousehol d categoriestha tmak earoun done-fift ho fthei r positiveinvestmen ti nric estocks .Middle-age dnon-surplu s householdssho wa comparativel y lowleve lo fric estoc kinvestmen t ofabou t10% .Monthl yfluctuation si nric estock swil lb eshow n 146 anddiscusse d inSectio n6.3.3 .

Exceptfo rth emiddle-age d non-surplushouseholds ,al lhousehold s showa substantia lincreas ei nne tfinancia lassets ,partl ydu et o ahighe rrat eo frepaymen to floan scompare d toacquisitio no f loansan dpartl ydu et one taddition st olendin gactivities . Changesi ncas ho nhan dar emino rwhic hca nb eexpecte dgive nth e generally lowleve lo fcas hsavings ,als oo na month-to-mont h basis.Cas hsaving sar eo flimite dimportanc ei nreserv e management.Althoug hhousehold susuall yhav esmal lamount so fcas h onhand ,th eamount sar egenerall y toosmal lt ob esufficien tt o overcomeeve nmino rshortfall si nincom e(Sectio n6.3.3) .

Infact ,fo rvariou sreason smos thousehold sattemp tt ominimiz e theircas ho nhan da smuc ha spossible .First ,a son efarme r eloquentlypu ti t 'cashi seasil yspent .Wit hric ei talway stake s sometim et ofin da buye ran dt ohau li tt oth eroad' .Second ,an d probablymor eimportant ,cas hinvite sothe rperson st oborrow . Cashi sgenerall yi nsuc ha shor tsuppl yi nth evillag etha ti ti s quicklyknow nwhe na househol d receivesmone yfro mth esale so f productso rotherwise ,e.g .whe na well-to-d omembe ro fth e household paysa visi tt oth evillage .Sellin go fric ewithou t immediatelybuyin gsomethin gi nretur ni s 'justinvitin gothe r peoplet oborro wcash' .Third ,i ti seasie rt ostea lcas htha nt o stealpalay .Hence ,cas ho nhan di sprimaril ymean tt opa yfo rday - to-dayconsume rneed san drelativel yinexpensiv efar minput ssuci h aspesticides .I nth ecas eo flarg ecas hexpenditures ,e.g . purchaseso ffertilizer ,consume rdurables ,clothing ,etc. ,th e generationo fcas hi scarefull yplanne d inadvanc eeithe rthroug h theliquidatio no fric ei nstoc ko rotherwise .

Especially,middle-age d surplushousehold ssho wa larg ene t repaymento fdebts .Additio nt opositiv efinancia lasset so fth e youngsurplu san dol dhousehol d categoriesi sprimaril ydu et oa netinvestmen ti nlendin gcas ho rkin dt oothe rhouseholds .I n particularth eol dhousehold sar eactiv ei nthi sfield ,investin g about16 %o fthei rpositiv einvestmen ti nlendin gactivities .

Allhousehol dcategorie ssho wne tsale so flivestock .I nfact ,n o investmentsi nlivestoc kwer emade.durin gth eobservatio nperio d (excludingchicke nan d pigs).Livestoc ksale sar eparticularl y largefo rbot hyoun ghousehol dcategories .Th eyoun gnon-surplu s householdsha dt osel llivestoc kdurin gth elea nmont hperio do f 1980t opa yfo rfunerals ,wherea sth eyoun gsurplu shousehold s soldcattl et ofinanc ehous econstruction .A negativ einvestmen t inlan doccurre d foron eo fth eol dsurplu shousehold sbecaus ei t hadt oretur npledge d landi n1979 .Th eopposit eoccurre d foron e ofth eyoun gnon-surplu shouseholds .

Investmentsi nhous econstructio n (e.g.repairs ,ne wextensions , roofing,improvement ssuc ha sth ereplacemen to fbambo owall swit h brickwalls ,etc. )ar eparticularl y largefo ryoun gsurplu san d oldhousehol dcategories .Relativ et otota lpositiv einvestments . 147 youngsurplu shousehold ssho wth ehighes tinvestmen ti nhousin g (30%o fth etota lpositiv einvestment) ,closel y followed byth e youngnon-surplu shousehold s (26%).Bot hmiddle-age dhousehol d categoriessho wth elowes trelativ einvestmen ti nhousing :fo r surplusan dnon-surplu shousehold so fthi scategor y 10%an d7% , respectively.Bot hi na nabsolut ean drelativ esense ,investment s inconsume r durablesar emino rfo ral lhouseholds ,wit hbot hyoun g householdcategorie shavin gth ehighes tinvestmen tleve lo f7 %o f thetota lpositiv einvestment .

Finally,larg einvestment si nhuma ncapita lar emad eb ymiddle - agedan dol dhousehol d categories.Th ehighes trat eo finvestmen t ineducatio no fchildre ni smad eb yth emiddle-age d non-surplus householdcategory .Thes ehousehold salmos tinves tthree-fourth s (!) ofthei rtota loutla yi nhuma ncapita lformation .Als oth eol d andmiddle-age d surplushousehold ssho wver yhig hrate so f58 %an d 47%,respectively .A sca nb eexpected ,bot hyoun ghousehol d categorieshav emino ro rn oinvestmen ti neducation .

Figure6.3. 1 graphically showsth einvestmen tan ddis-investmen t patterno na year-to-yea rbasis .Fo rth epoo rproductio nseaso no f 1979-80,al lhousehol dcategorie ssho wa depletio no fric estock s and,excep tfo rth eyoun gsurplu shouseholds ,a nincreas ei n outstandingdebts .Negativ einvestment sals ooccu ri nlivestoc k assets,notabl y forth eyoun gsurplu shousehold stha tus eth e proceedso flivestoc ksale sfo rhous econstruction .Agains tthei r negativeinvestment ,th eyoun gnon-surplu ssho whardl yan y positiveinvestmen tresultin gi na dis-savin gi n1979-8 0o f$90 . Despitepoo rproductio ncircumstances ,al lothe rhousehol d categoriesstil lsho wa ne tinvestment ,fo rbot hmiddle-age d household categoriesprimaril ydu et oinvestment si neducation , whereasth eyoun gsurplu shousehold sa sth eonl yhousehol d categoryapparentl ycoul daffor dinvestment si nhous econstructio n andmaintenance .Apar tfro minvestin gheavil yi neducation ,ol d surplushousehold sappea rt oac ta sa nimportan tbuffe rfo rothe r householdsi nterm so fprovidin gsubstantia lamount so f consumptionloans .I nth epoo rproductio nseaso no f1979-80 ,thes e householdslen tric et oothe rhousehold sa tth ecos to fdepletin g theirow nric estock san dborrowin gric eo rcash .

Forth enex ttw oseasons ,al lhousehold ssho wa ne tpositiv e investmenti nassets .I ncontras twit hth eyoun gan dmiddle-age d surplushouseholds ,non-surplu san dol dhousehold ssho wlowe r positiveinvestment si n1981-8 2compare d to1980-81 .Al l householdsreplenis hthei rric einventorie si nth eseaso no f1980 - 81,wherea sa declin ei ndeb tpositio noccur sfo ral lhousehol d categories,excep tfo rth eyoun gsurplu shouseholds .Th eyoun gnon - surplushousehold ssel llivestoc kt oimprov ethei rliqui dasse t position.

Theyoun gan dmiddle-age d surplushousehol dcategorie scontinu et o investi nric estock si n1981-82 .Th eyoun gnon-surplu shousehold s showa depletio ni nric estock st orepa ydebts ,wherea sth eol d 148

youngnon-surplu s middle-agednon - 200 households surplushousehold s Legend

($) rice stock cash on hand borrowing Lending 100 farm assets livestock housing consumer durables mortgage 1 E2 education m 11 oldsurplu s -100 1979198 0198 1 households 600 middle-aged ($) surplushousehold s

500 1

400 youngsurplu s households

300 i 200 i S 100 1 S

-100

-200

Fig.6.3. 1 Household investmentan ddis-investmen t patternb y year; averagespe rhousehol d category($ ) 149 householdssho wagai na ne tinvestmen ti nlendin ga tth eexpens e ofa declin ei nric estocks .Th emiddle-age d non-surplus householdssho wa mino radditio nt oric estocks ,bu ta sth eonl y household category,the yborro wa substantia lamoun ti n1981-8 2a s wella ssel llivestoc kapparentl yt ofinanc eth eeducatio no f children.

6.3.2 Externalmean so fris kreductio nan ddiffusio n Apartfro minterna lris kreductio nan ddiffusio nmeasures , householdsals odepen do noutsid emean so fris kmanagemen ttha t requireth einvolvemen to fothe rparties .Ris ksharin gi sa typicalexampl eo fris kreductio nwher eothe rpartie stak epar ti n therisk sincurre d byactivitie so fth ehousehold .Ris ksharin g impliestha tn oclaim sca nb emad ei ncas ehousehold s- du et o circumstancesbeyon dthei rcontro l- ar eno tabl et oretur nth e resourceso rfund sgive nt othem .Othe rimportan texterna lmean s ofris kdiffusio nar ecredi tan dmutual-ai darrangements . Especiallycredi treserve sma yfunctio na sa sourc eo fliquidit y thatprovide sa mean so fgeneratin gcas htha tavoid sth ecost s associatedwit hliquidatin gproductiv easset st omee tcas ho rkin d demandsan dthe nreacquirin gasset slate rwhe nadvers econdition s havepassed .

Risksharin garrangement s Atypica lexampl eo fris ksharin gi sfoun di nshar etenanc y contracts.Unde rthi sbroa dheadin gvariou stype so fris ksharin g betweenth etenan tan dlandowne roccur ,rangin gfro mth e landowner'sparticipatio ni nal lcost so fproductio n (exceptfo r thelabou rinput )t oonl yth eprovisio no fland .A smentione di n Section5.1.1 ,despit eth eris kreducin geffec to fshar etenanc y contracts,a larg enumbe ro ffarmer sfavou rfixe dren tcontracts . Itis ,however ,strikin gtha tespeciall yyoun ghousehold shav e tenanted landunde rshar econtracts .Fo r 1981,youn ghousehold s hadabou thal fo fthei rlan dunde rshar etenanc ycontract s compared toroughl yone-fift hfo rth emiddle-age d andol d households.Fro mdiscussion swit hyoun gfarmer si tappeare dtha t theywer egenerall yles sincline dt odeman dfixe dren tcontract s compared toolde rfarmers .I nfact ,i non ecas ea so nreceivin ga pieceo ftenante d landfro mhi sfather ,wh opai da fixe drent , askedhi mt ochang eth etenur econtrac tbetwee nthe mt oa shar e tenancy.Th emai nreaso nfo rthi spreferenc efo rshar econtract s amongyoun gfarmer si sprobabl yth ehighe rmanagemen tris kthe y facei nagricultur edu et olabou rlimitations .Anothe rreaso nma y betha tthes eyoun ghousehold svie wshar etenanc ya sa mean st o tieu pwit ha stronge reconomi cpart yan dt ofin da plac ei nth e socialnetwor k (e.g.throug hth ecreatio no fa patron-clien t relationship).

Asecon d formo fris ksharin gi nproductio nactivitie soccur si n theearlie rmentione d sagodsystem .Unde rsuc harrangement ,on e partyprovide sa pigle to rcow ,wherea sth eothe rpart ytake scar e ofth efeedin go fth eanimal .Sometime sextr afee dcost sar e 150 shared.Th eproceed safte rsal ear eequall ydivided .Thi styp eo f arrangementi stypica lbetwee nrelativel yric han dpoo r households,th eforme rprovidin gfo rth eanima lan dth elatte r supplyinglabou rt ofee dth eanimal .

Ofcourse ,a certai nelemen to fris ksharin g isals oinvolve di n lendingcas ho rkin dt ohousehold si ntime so fcro pfailure sor , moregenerally ,t ohousehold swit ha lo wrepaymen tcapacity .Loa n repaymentma yge tseriousl ydelaye dan di ti sno tuncommo ntha t aftera certai nperio d lendershav et oagre eo na deb tsettlemen t inorde rt osalvag epar to fth eoutstandin gdeb tamount .Ris k sharingthroug hinstitutiona linsuranc eprogramme si svirtuall y non-existing.I n1981 ,cro pinsuranc ewa sintroduce di nth eare a ona ver ylimite d scalea sa componen to fth erevive dM-9 9 programme.Th efe wfarmer sobtainin gsuc hloa nha dt otak ecro p insurancea spar to fth elendin gconditions .

Therol eo fcredi ti nris kmanagemen t Themai nsourc eo fcredi ti nth evillag ei sfro mprivat emone yo r palaylenders .Aroun d 70%o fth etota lamoun tborrowe ddurin gth e periodo fApri l197 9unti lApri l198 2b yth esampl ehousehold si s fromnon-institutiona l lending sources.Roughl y30 %o fthi samoun t isborrowe d throughpurchase so ncredit ,wherea sth eremainin g70 % consisto fcas han dpala yloans .Th egrou po fprivat elender si s composedo fclos ekinsmen ,wealth yfarmer si nth evillage , professionalmoneylender si nth etowns ,landlords ,and ,recently , fertilizerdealers .Institutiona llender sar eth erura lban ki n thenearb ytown ;a provincia lcooperativ eban ki nth ecity ;an d therevive dMasagana-9 9programme .

Thevariou stype so floa narrangement sar epresente d inTabl e 6.3.2,togethe rwit hinformatio no nth elendin gperiod san d interestrates .Bot halil ian dproduktua nar egenerall yuse dfo r productionpurposes .Th eloa namoun ti sprovide d incas han d repaymenti seithe rfull yo rpartl yi nkind .I nthi scategory , alilii sth emos timportant .I ncontras tt oproduktuan ,i ti sa commerciallyoriente d typeo floa nwhic hdoe sno trequir especifi c relationswit hth elender .Th eter malil iliterall ymean s 'repaymenti nkind' .Bot hth eprincipa lsu man dth einteres ti s repaid inrice ,usuall ydurin gth emai nharvestin gperio di n December.Th eloa namoun to fon ealil iloa ni s$8. 1fo rwhic ha repaymento ftw obag so fric e($12.5 )i srequired .Thes eloan sar e usuallyobtaine d duringth eperio do fMay-Jun et opa yfo rinput s sucha sfertilize ran dpesticides .The yar eprovide d byth e wealthier farmersi nth evillag ewh oar eactiv ei nric etradin g andals ob ylandlord san dtow nmoneylenders .O fth eprivat eloa n arrangementsi ti sth emos timpersonalisti ctype ,generall yth e easiestfor mo fcredi tt oobtai nan dthu si ti srelativel y expensive.I norde rt osecur erepayment ,th elende ri susuall y presentdurin gth emeasuremen to fth eric eharves tan dabl et o forceloa nrepayment .A sshow ni nTabl e6.3.3 ,middle-age d surplus householdsar eth elarges tuser so fthi styp eo fcredit .Becaus e ofthei rsubstantia lbuffe rcapacity ,thes ehousehold srepresen ta 151

Table 6.3.2 Loan arrangements Typical loan Amountt ob e Typical loan Interest Typeo floa n amount repaid period per month Alili $8.1 2 bags palay Play/Jun- Dec/Ja n 4.2- 7.7 * Produktuan $13.5 $13.5+ 2/ 3bag s Feb/Mar- Feb/Fla r 2.3- 5.0 * 4/3 bagspala y Sagahay 2 bagspala y 3 bags palay Feb/Mar- Oec/Ja n 3.3- 5.0 * Saka-an small amounts original amount short periods 5.0- 10.0) 1 + interest Slbu -ide m- original amount -ide m- - Arat lauuan -ide m- payment inlabou r Clay/Apr- Dec/Ja n ? Coop Rural Bank $116 any period 1.6- 1. 8 % 1*1-99programm e $146 JUN/JU1- May/Ju n 2.1* lowcredi tris kt olender san dgenerall yencounte rfe wproblem si n obtainingthes eloans .Althoug hnon-surplu shousehold sar e similarlypresse d tomak eus eo fthi styp eo floan ,th epercentag e ofalil iloan st otota lloa nacquisitio ni sfa rbelo wtha to fth e middle-aged surplushouseholds ,6 %an d 16%,respectively .Bot hth e youngsurplu san dth eol dhousehol dcategorie smak elimite dus eo f thisexpensiv etyp eo floans .

Produktuani sa mor eattractiv ebu tles scommo nloa narrangemen t whichi susuall yprovide db yvillag epeopl et oborrower swh oare , tosom eextent ,related .Th eter mliterall ymean s 'interesti n kind'.Th eprincipa lsu mi srepai di ncas han dth einteres ti s paidi nrice .On eproduktua nloa namount st o$13. 5fo rwhic hth e interestcharg evarie sfro m2/ 3 ($4.2)t o4/ 3 ($8.3)ba go frice , dependingo nth eclosenes so fth erelatio nbetwee nborrowe ran d lender.Thes eloan sar eusuall yobtaine d inth eperio do fFebruary - Marcht opa yfo rcas hexpense ssuc ha sdr yseaso nlan dpreparatio n andcas hinput sfo rth edry-seaso ncrops .Th ematurit yperio do f oneyea ri slonge rcompare dt oth ealil iloans .Th eyoun g householdsar eth elarges tuser so fthi styp eo floa nwhic hthe y mainlyobtai nfro mthei rparents .

Atypica lconsumptio nloa ni ssagaha ywhic hmean s 'extrao fth e samekind' .Bot hth eborrowe damoun tan drepaymen to fth e principalsu man dinteres ti si nrice .Fo rtw obag so fric ea n interesto fon eba go fric ei scharged .Sagaha ylendin gusuall y occursdurin gth eoff-seaso ni nFebruary-Marc hand ,generall y betweenclos erelatives .Sometime si ti sprovide d bylandlords . Sagahayarrangemen tals ooccur swit hseed s(e.g .mungbeans) .Bot h inabsolut ean drelativ eterms ,th enon-surplu shousehold sar eth e largestuser so fthes esagaha yloans .

Betweenver yclos erelatives ,interest-fre econsumptio nloan sals o occur.Thes eso-calle d sibuarrangement sinvolv esmal lamount so f ricean dcas han dar e(apar tfro mver ylimite damount sgive na s 152

Table6.3. 3 Patterno fdebt sb ytyp eo floa narrangemen t ($);1979-8 2

-Non-surplu s- Surplus Average young middle young middle old Loan acquisition:

Institutional 88 30)1 ) 12 ( 5) 49 (18) 36 (23) 287 (48) 55(28 ) CoopBan k 73 25) 12 ( 5) 49 (18) 36 (23) 212 (36) 55(28 ) fl-99programm e 15 5) 75 (12) Private 145 34) 169 (68) 187 (69) 89 (58) 216 (36) 66(33 ) 'Soft1 loans 101 9) 138 (55) 156 (57) 71 (46) 98 (16) 42(21 ) sibu 37 13) 44 (17) 40 (14) 48 (31) 32 ( 5) 20(10 ) sibu (landrent) 12 4) 30 (12) 21 ( 8) 10 ( 2) sagahay 52 17) 64 (26) 95 (35) 23 (15) 56 ( 9) 22(11 ) Produktuan 10 4) 17 (7 ) 7 ( 3) 16 (11) 6 (D 6 (3 ) 'Commercial' loans 54 18) 63 (25) 28 (11) 6 ( 3) 125 (22) 47(23 ) ,\Otloa n 7 2) 1 (D 4 (2 ) 16 ( 3) 14( 7 ) alili 27 9) 13 ( 5) 20 ( 7) 2 (D 95 (16) 4 (2 ) fertilizer loans 20 7) 49 (19) 4 (2 ) 4 ( 2) 14 ( 3) 28(14 )

Purchaseo ncredi t 41 14) 19 ( 8) 32 (11) 26 (17) 79 (13) 50(25 ) Pore 26 9) 15 (6 ) 13 (4 ) 21 (14) 48 ( 8) 33(16 ) Palmmin e 15 5) 4 ( 2) 19 (7 ) 5 ( 3) 31 ( 5) 17( 9 ) Total 294 249 272 155 595 199 Loan repaymenti 327 281 233 161 706 251 Institutional 80 (25)2 ) 5(2) 42 (18) 33(21 ) 260(37 ) 60(24 ) Private 187 (57) 213(76 ) 155 (66) 97(60 ) 354(50 ) 114(45 ) Purchaseo ncredi t 60 (18) 63(22 ) 36 (16) 31(19 ) 92(13 ) 77(31 ) Deflationo fcas hdebt s 8 4 6 2 21 8 Changedeb t position -41 -36 33 -8 -132 -60 Total 294 249 272 155 595 199 1) Figuresi nparenthese sar epercentage so ftota l loan acquisition 2) Figuresi nparenthese sar epercentage so ftota l loan repayment gifts)a clea rfor mo fmutual-ai d betweenhouseholds .The yar e usuallygive nt ohousehold stha tcanno totherwis eobtai nloan s becausethe yar eover-extended .Sib uma yals ooccu rbetwee n tenantsan dlandlord si ncas etenant sdefe rpar to fth elandren t payment.Bot hnon-surplu shousehol dcategorie sar estrongl y dependento nthes eloans .Th elarg eamoun to fsib uloan sfo rth e youngsurplu shousehold si ssomewha tsurprising .The ymainl y involveloan sfro mthei rparents .

Themos texpensiv efor mo fborrowin gi nth evillag ei sth esaka-a n arrangement,literall ymeanin g 'lendingfo rinterest' .Amount so f cashborrowe d throughthi sarrangemen tar egenerall yver ysmal l andth ematurit yperio di sshort .Interes trate svar yfro m5 t o 10%pe rmont hdependin go nth erelationshi pbetwee nlende ran d borrowera swel la sth eamoun tinvolved .I ti sa nimpersonalisti c typeo floa nprovide d bynon-loca llenders .

Aseparat egrou po fprivat eloan sinclude sarrangement swher e consumptiongood so rproductio ninput sar epurchase do ncredit .A commonarrangemen ti sth esuki .I tinvolve sa subscriptio nt o 153 regularpurchase so ncredi to fcertai nconsume rgood sth eful l amounto fwhic hi spai dafte ra predetermine d period.A typica l examplei sth epurchas eo fpal mwine :th esuki-take ragree st opa y acertai nnumbe ro fbag so fric ea tth etim eo fric eharvestin gt o thesuki-give ri nretur nfo ra fixe d (guaranteed)dail yquantit y ofpal mwine .Purchas eo ncredi ti sals oinvolve d inth ebuyin go f porkfo rth eannua lfiesta .Usually ,a numbe ro fhousehold s slaughterthei rpi go nthi soccasio nan dbarte ra portio no fth e porkfo rric ewhic hi srepai ddurin gth eric eharves tperio di n December.Th eintrinsi cinteres trat efo rthi sarrangemen twa s calculateda troughl y4 %pe rmonth .

Amor erecen tnon-institutiona l loanarrangemen tinvolve sth e purchaseo ffertilize ro ncredi ti nJune-Jul yi nretur nfo ra ric e paymenti nDecember .Thi styp eo floa ni sprovide db yloca l middlemenwh oobtai nfertilize ro ncredi tfro mth ecity-base d fertilizerdealer swhic hthe yi ntur noffe rt oindividua lfarmer s athighe rinteres trates .Als owealth yfarmer si nth evillag e providethes efertilize rloans .I n1980 ,a ba go fure a($12.7 )wa s offered inJun ei nretur nfo r2.3 3bag so fric e($17.6 )t ob epai d inDecember ,resultin gi na monthl yinteres trat eo f6.4% .Thi s expensive,commercia ltyp eo floa ni sprimaril yuse db yth eyoun g non-surplushouseholds .

For197 8an d 1979,availabilit y ofinstitutiona lcredi twa s limited toban kloan ssecure dwit hlan da sa collateral .Thes e loanscoul db eobtaine d fromth erura lban ki nth enearb ytow n againsta ninteres trat eo f12% .I n1980 ,i tbecam epossibl et o lendmone yfro mth enewl yestablishe dCooperativ eRura lBan k(CRB ) inIloil oCity .Loan shav et ob esecure dwit ha collateral . Interestrate sdepen dupo nth etyp eo fcollatera loffered :14 %an d 16% forworkin ganimal san dland ,respectively .Th emaximu mloa n amounti s$11 6i fa workin ganima li sprovide da sa collateral . Thematurit y periodo fth eloa ni s9 month san dn orestriction st o theus eo fth eloa nar eattached .I ncontras tt othes eCRB-loans , M-99loans ,tha tagai nbecam eavailabl ei n198 1throug hth e earliermentione dAre aMarketin gCorporation ,d ono trequir ea collateral.Th eutilizatio no fthes eloan sar econsidere d tob e supervised bya numbe ro forganization san dth eloca l extensionist.Consequently ,th eprocedur efo racquirin g suchloan s isfa rmor ecumbersom ecompare d toth eCRB-loan .Th eonl ytim ea groupo ffarmer smad eus eo fthi sscheme ,i ttoo kon efarme ra weekan d$2 0trave lexpense st oobtai nth enecessar ycertificate s andclearance sbefor eactua lloa ndisbursemen twa smade .Th e maximumloa namoun tunde rthi sschem ei s$17 5pe rhectar eo fwhic h atota lo f$3 5i ssubtracte d forinteres tpaymen t (12%),a cro p insurancepremiu m ($3.5), andtw oobligator ycontribution st o villagesavin gfunds .

Inth eabov edescriptio no ftype so floa narrangements ,th e commonlyuse ddistinctio nwa smad ebetwee nconsumptio nan d productionloans .Althoug hfo ra lende ri tmake sa substantia l differencewhethe rloan sar euse d forproductiv epurpose s(e.g . 154 purchaseo ffertilizer )o rfo rconsumption ,fo rth ehousehol d itselfsuc hdistinctio nis ,t oa larg eextent ,artificial . Financesfo rbot hconsumptio nneed san dproductio ninput shav et o comeou to fth esam ecash/kin d flow.Fro ma ris kmanagemen tpoin t ofview ,a mor eimportan tdistinctio nbetwee ntype so floan si s basedo nth eterm san dcondition sunde rwhic hloan sca nb e acquired.T oserv ea sa mean so fris kdiffusion ,credi tshoul db e availablea ttime sth ehousehol d facesproblem si nfinancin g subsistenceneed sdu et opoo rproductio no runexpectedl yhig h expenditures,i.e .a ttime stha tth ehousehol d showsa poo rcredi t ratingan di sa substantia lcredi tris kt oth elender .I nthi s respect,i ti sbette rt odistinguis hbetwee ntype so floan swhic h areprovide da sa nai dt oothe rhousehold s('sof tcondition 1 loans)an dloan stha tar eprovide do na 'commercial'basis .

Whenth etota lloa namoun tdisburse d toth esampl ehousehold si s considered,roughl yhal fconsist so fsof tconditio nloans ,29 %o f institutionalloans ,an d20 %o floca lcommercia lloans .O fth e softconditio nloan s45 %ar esib uloan sfo rwhic hn ointeres ti s charged,indicatin g theimportanc eo fmutual-ai d inloca llending . Ofth etota lloa nvolum et onon-surplu shouseholds ,roughl ytwo - thirdsconsis to fsof tconditio nloans .Th eyoun gnon-surplu s householdsmak ealmos tn ous eo finstitutiona lcredi t (5%)an dar e relativelystrongl ydependen to ncommercia lloan s(28%) .Th e middle-agednon-surplu shousehold sar eabl et osecur e20 %o fthei r loanvolum efro minstitutiona lsource san dobtai n12 %throug h commercialchannels .Als oth eyoun gsurplu shousehold ssho wa hig h percentage (67%)o fsof tconditio nloan s(a smentione dearlie r mainlyi nth efor mo fai dfro mthei rparents )a swel la sth e lowestpercentag e (5%)o fcommercia lloans .I ncontrast ,th e middle-agedan dol dsurplu shousehold sonl yacquir e20 %an d32 % softconditio nloans ,respectively ,bu tobtai na relativel ylarg e percentageo fthei rloan s(56 %an d37% ,respectively )fro m institutionalsources .I ti sno tsurprisin g thatth emiddle-age d surplushousehold sar eth elarges tuser so finstitutiona lcredit . Incontras twit hth enon-surplu shouseholds ,the yeasil ymee tth e loancondition san dth einteres trat emake si tworthwhil et og o throughth elaboriou sroutine so facquirin g suchloans .Moreover , giventhei rsurplu sproductio ncapacit y (or,alternatively ,thei r repaymentcapacity) ,non-surplu shousehold sru na substantia lris k oflosin gthei rcollatera ldu et othei rinabilit yt orepa yth e loana soccurre dearlie rdurin gth eM-9 9programm ei n1974 .

Table6.3. 4 showsth eloa nacquisition ,interes tcosts ,an dth e debtpositio ni nrelatio nt oth esurplu sincom ean dliqui dasse t positiono fth evariou scategorie so fhousehold sfo rth eperio do f 1979-82.I nabsolut eterms ,th emiddle-age d surplushousehold sar e byfa rth elarges tuser so fcredit .Th etota lacquire d loanamoun t duringth ethre eyea rperio d ($595)i smor etha ntwic ea shig ha s thenex thighes tusers ,th emiddle-age dnon-surplu shousehold s ($272).Wit ho naverag e$24 9pe rhousehold ,th eyoun gnon-surplu s householdshav eborrowing ssomewha tbelo wthi slevel ,followe db y theol dhousehol dcategor y ($199),wherea sth eyoun gsurplu s 155

Table5.3. 4 Household debt positionan dinteres t costsi nrelatio nt osurplu sincom ean dliqui d asset holdings($ ) -Non-surplu s- Surplus Mean young medium young medium old

(1) Annual household income (1979-82) 761 419 599 649 1172 964 (2) Annual surplusincom e (1979-82) 1) 378 75 143 401 620 652 (3) Liquid asset position (March 1982) 2) 302 78 115 553 407 356

(4) Debts outstanding (April 1979) 93 75 90 19 217 64 (5) Loan acquisition (1979-82) 294 249 272 155 595 199 (Total education expenses (1979-82)) (273) ( 18) (279) ( - ) (477) (591) (6) Total incurred debts(4+5 ) 387 324 362 174. 812 264

(7) Loan repayment (1979-82) 334 285 239 163 727 259 (8) Debts outstanding (March 1982) 53 39 123 11 85 5

(9) Average monthly debt position (1979-82) 131 133 137 28 27.7 80 (10)Ne tannua l interest payments (1979-82) 3) 31 31 34 13 70 9

Monthly debtt otota l debt(9/6 ) 0.32 0.41 0.38 0.16 0.34 0.30 Monthly debtt oannua l income(9/1 ) 0.18 0.32 0.23 0.04 0.24 0.08 Interest-surplus income ratio (10/2) 0.16 0.41 0.24 0.03 0.11 0.01 Debt-surplus income ratio(8/2 ) 0.31 0.52 0.86 0.03 0.14 0.01 Debt-liquid asset ratio (8/3) 0.37 0.50 1.07 0.06 0.21 0.01 1) Calculated surplusincom ebase do nth etota l incomeminu s calculated subsistence requirements, i.e.,th enumbe ro fstandar d consumer units* $80. 2) Liquid assetsonl y include product inventoriesan dcas h savings. 3) Represents interest costfo rloan sobtaine d duringth eperio d 1979-82minu s interest paymentso n outstanding loans received duringth esam e period.

householdshav eth elowes tleve lo fcredi tus e ($155).Whe nth e durationdebt sar eoutstandin g istake nint oaccoun tan dth e averagemonthl youtstandin gdeb tamoun tdurin gth ethre eyea r periodi scompare d (includingoutstandin gdebt sa tth ebeginnin g ofthi speriod) ,difference sbetwee nhousehold s- notabl yfo rth e youngsurplu shousehold s- ar emor epronounced .A sindicate db y therati o 'monthlyaverag edeb tt otota ldeb tincurre ddurin gth e threeperio do f1979-82' ,th eduratio no fdebt soutstandin gi s substantially shorterfo rth eyoun gsurplu shousehold scompare dt o theothe rhouseholds ,wherea sth enon-surplu shousehold ssho wth e longestdeb tperiods .

Whenth edeb tpositio ni sconsidere di na relativ esense ,b y comparingth eaverag emonthl ydeb tpositio nt oth eaverag eannua l householdincom efo rth eperio do f1979-82 ,youn gnon-surplu s householdssho wa ver yhig hdeb tt oincom erati oo f32% ,implyin g ahig hleve lo fcontinuou sindebtedness .Bot hmiddle-age d householdcategorie sals osho wa hig hrati oo f23% .Ol dan dyoun g surplushousehold shav emuc hlowe rratio so f8 %an d4% , respectively.Whe nthes edeb tt oincom eratio sar ese tagains tth e expenditurepatter ndiscusse d inth epreviou ssection ,i ti s interesting tonot etha tfo rth emiddle-aged ,non-surplu s householdseducatio nexpense sar eroughl yequa lt oth etota l acquired loanamount .Fo rth emiddle-age d surplushousehold sth e levelo feducatio nexpense si sabou t80 %o fth eleve lo fth etota l loanvolume .Give nth efac ttha tthes eexpenditure smainl yoccu r duringth elea nperio d fromApri lunti lOctober ,thi simplie stha t a largepar to fth eborrowe dfund so fmiddle-age dhousehold si s usedfo rfinancin geducation .Further ,give nth elo wleve lo f 156 disposableincom epe rconsume runi to fnon-surplu shousehold s whichvirtuall ypreclude sth ereductio ni nconsumptio nlevels , thesehousehold scanno treduc eth eloa nvolume swithou t endangeringth efunctionin go fth ehousehol d (youngnon-surplus i households)o rreducin ginvestment si neducatio n (middle-agedn^)rt - surplushouseholds) .A reductio ni nloa nvolum ewoul dendange rth e functioningo fth emiddle-age d surplushousehold st oa muc hlesse r extent,an di svirtuall yn oproble mt oth eothe rsurplu shousehol d categories.

Table6.3. 4 alsoshow sth ene tannua linteres tpayment sdurin gth e periodo f1979-82 .The yrepresen tth einteres tincurre do nloan s obtaineddurin gthi sperio dminu sth einteres treceive do n outstanding loanswit hothe rhouseholds .Whe ncompare d toth e surplusincome ,interes tpayment susur pa larg epar to fthi s incomeo fnon-surplu shouseholds .Fo rth eyoun gnon-surplu s households,41 %(! ) ofth erealize d surplusincom egoe st o interestpayments ,wherea sfo rmiddle-age dnon-surplu shousehold s thisamount st oa leve lo f24% .Fo rth eforme rcategor yo f households,i tindicate sth esubstantia lcos ttha ti sassociate d withsustainin gminimu msubsistenc erequirements .Fo rth emiddle - agednon-surplu shousehold si tactuall yindicate sth esubstantia l interestcost stha tar eincurre d forfinancin geducation .

Exceptfo rth emiddle-age d non-surplushouseholds ,al lhousehol d categoriessho wa large rrepaymen to floan stha nloan sacquired . Theresultin gdeb tbalanc ea so fMarc h 1982i shighes tfo rth e middle-agednon-surplu shouseholds ,followe db yth emiddle-age d surplushouseholds .Th eyoun gsurplu san dol dhousehold ssho wa verylo wdeb tbalance ,wherea sth eyoun gnon-surplu shousehold s takea positio nin-between .However ,compare d toth eaverag e surplusincom erealize ddurin gth eperio do f1979-82 ,i.e. ,th e incomeou to fwhic haccumulate d debtshav et ob erepaid ,bot h middle-aged andyoun gnon-surplu shousehol dcategorie ssho wver y highindebtednes slevels .Th erati ooutstandin gdebt st osurplu s incomei s0.8 6an d0.5 2 forth emiddle-age dan dyoun gnon-surplu s households,respectively ,compare dt oa rati oo f0.1 4 forth e middle-aged surplushousehold san dver ylo wratio sfo rth eyoun g andol dsurplu shouseholds .

Thedifference si nne tdeb tpositio n (outstandingdebt sminu s outstanding loans)betwee nhousehol dcategorie sbecom eeve nmor e pronounced,whe nth eamount so fric ean dmone ylen tt oothe r householdsar etake nint oaccount .A sshow nb yTabl e6.3. 5ol d householdsand ,t oa lesse rextent ,youn gsurplu shousehold shav e accumulateda substantia lamoun to foutstandin gloan st oothe r householdsa so fMarc h1982 ,s omuc hs otha tthei rne tdeb t balancebecome snegative .Middle-age d surplushousehold ssho wa balanceo foutstandin gloan sa thal fth eleve lo ftha to fth e youngsurplu shouseholds .Thi sreduce sthei rdeb tpositio no f$8 5 toa ne tdeb tpositio no f$59 .Als oth emiddle-age d non-surplua. householdssho wa mino routstandin gloa nbalance ,bu tthi shardl y affectsthei rindebtednes slevel .I ti sstrikin gtha teve nth enon - 157

Table6.3. 5 Pattern ofoutstandin g loansan dloa n repayment ($);1979-8 2

, -Non - surplus- .-Surplu s- Average young middle young middle old

Lending balance April 1,197 9 11 0 2 28 10 14 ; Cash 4 19 I Kind 7 2 9 10 14

Lending (1979-82) 123 28 32 109 78 370 Cash 24 6 13 51 12 35 Kind 99 20 19 58 66 335

Total 134 28 34 137 88 384

Total loan repayment (1979-82) 78 26 23 76 61 205 Cash 13 5 13 18 9 19 Kind 65 21 10 58 52 186 i I Deflationo floan s 6 1 1 11 1 16 ! Lending balanceMarc h31 , 1982 50 0 10 50 26 163 ' Cash 12 45 3 13 i Kind 38 10 5 23 150

Total 134 28 34 137 88 384

surplushouseholds ,i nspit eo fthei rpoo rfinancia lsituation , lendmone yan dric et oothe rhouseholds .The yar eusuall ysmal l amountsgive nt oneighbourin ghousehold so fth esam eeconomi c positioni nth espher eo fmutua lhelp .

Iti sdifficul tt odetermin eactua lcredi tlimit st oindividua l householdsbecaus eo fth ecomplexit yo fcredi tdeterminant s affectingth esuppl yo fcredi tan dtyp eo floan savailabl et o individualhouseholds .Acces st ocredi tsource slargel ydepend so n thecredit-worthines so findividua lhousehold sdetermine d bysuc h factorsa sth emanageria lqualitie san dpersona lcharacteristic s ofth efarme ran dhi swife ,th ewealt hpositio nan dcredi thistor y ofth ehousehold ,an dth epersona lrelationshi phousehold shav e withpotentia llenders .Th esuppl yo fcredi tfurthe rdepend so n abovevillag eleve lfactor sdeterminin gth eavailabilit yo floan s frominstitutiona lsource sa swel la svillag eleve lfactor ssuc h asth egenera lleve lo f(surplus )agricultura lproductio nan dth e existenceo fopportunitie sfo ralternativ einvestmen toutlets .

Thesocia lnetwor kplay sa nimportan trol ei nth eacquisitio no f loans,an dthu si nth eris kdiffusio no findividua lhouseholds . Themaintenanc eo fgoo dsocia lrelation swit ha numbe ro fothe r householdsi nth evillag ei sessentia li nobtainin ghel pi nth e formo floans ,i nparticula rinterest-fre eloans ,a ttime sth e household facesa subsistenc ecrisis .Socia ltie sbetwee n householdsma yconsis to fkinship ,neighbourhood ,o rth eso-calle d patron-clientrelationships .Especiall ylink swit hfamilie stha t havea regula rincom e(e.g .governmen temployees )ar eimportant . Incontras twit hfarm-household sthei rincom ei sno tsusceptibl e tostron gseasona lfluctuations .I ncas ehousehold scanno tacquir e helpo rloans ,the yma yas ka clos erelativ eo rneighbou rt oac t asintermediary .I nsuc ha case ,th elende rwil lhol dth e 158 intermediary responsiblefo rloa nrepayment .Th ehousehol d actuallyreceivin gth eloa ni soblige d togiv ehig hpriorit y to' repayth eloa nt oth eintermediary .O fcourse ,goo dsocia l relationsar eals oimportan ti ncreatin gwag elabou ropportunitie s forpoo rhouseholds ,fo rexampl ei nth efor mo fpreferentia l accesst oearl ylan dpreparatio nan dric eharvestin gactivities i

Althoughi ti sdifficul tt oarriv ea ta genera lassessmen to f creditavailabilit y toindividua lhouseholds ,i twa sa commo n observationamon gfarmer stha ti twa sdifficul tt oacquir eloan s atth eloca lcredi tmarke tdurin gth e1979-8 0cro pseason .Farmftr s mainlycomplaine dabou tth ealmos tnon-availabilit y ofporcentuq n loansan dth eunusua lproblem sencountere d inobtainin galil i loans.Thi swa sgenerall yattribute dt opoo rloa nrepaymen ti n recentyear scausin ga larg enumbe ro fhousehold st ob e financiallyoverextended .Thi sobservatio nwa sconfirme d byloca l lenderswh oargue d thati twa sbecomin gmor edifficul tt oenford e loanrepayment .Moreover ,som eo fthes elender sfoun dgoo d opportunitiesfo rinvestin gthei rcapita li nothe rprofitabl e enterprises,notabl ythresher san dwinnowers .Thus ,relianc eo n credita sa sourc eo fliquidit yintroduce sa nadditiona lris ki n termso fth elenders 'response st ochangin gcondition si n agriculturean di nfinancia lmarket stha tinfluenc ethei rlendin g decisionsan dresultin gcredi tavailability .

Aspecia lstud yconcernin gth edeb tpositio no fsampl ehousehold s carried outi nMarc h1980 ,support sth eassertio ntha tsubstantia l debtsha daccrue d duringrecen tyears ,som eo fwhic har edatin g; backa sfa ra s1974 .Som eo fth erespondent sargu etha tman yo f thesedebt sar estil lth eresul to fexcessiv eborrowin gdurin gth e

Table6.3. 6 Auerageoutstandin gdeb tpe rhousehol db yloa narrangement ,tim eo facquisition ,an d purposeo floa n($) ;Marc h198 0

Private palay loans Privatecas h Loans Inst. loans Total Sagahay Sibu Land1 ) Alili Produkt . Sibu Bank m-99 Yearo f acquisition 1974-75 2.9 ( 3)2 ) 2.9 1975-76 11.7 (12) 2.7 5.9 3.2 1976-77 27.2 (28) 9.5 4.7 13.0 1977-78 13.7 (14) 7.2 0.7 5.9 1978-79 6.5 (v ) 2.1 0.5 0.3 1.8 1.7 1979-80 34.5 (36) 13.6 2.8 10.4 1.4 6.4 Total 96.5 (100) 32.4 6.0 10.4 1.0 21.2 3.1 6.4 16.2 W (34) (6) (11) (D (22) (3) (6) (17). Purpose Consumption 52.8 (55) 28.4 5.5 10.4 2.7 0.7 5.1 Farminput s 19.1 (20) 0.5 0.7 10.9 7.0 Education 17.0 (17) 5.9 0.6 6.4 4.1 Construction 5.3 ( 6) 4.0 0.3 1.2 Medicare 1.1 (D 0.5 0.6 Others 1.2 (D 1.2 1) Deferredlan dren tpayments . 2) Figuresi nparenthese sar epercentage spe rcolumn . 159 M-99programm ei n1974 .Th eresult so fthi sstud yar esummarize d inTabl e6.3.6 .Th eaverag edeb tpe rhousehol da so fMarc h198 0 amounted to$97 .A sbecam eapparen tfro msubsequen tloa nrepaymen t recordsi nth ecours eo f1980-8 1an d1981-82 ,under-reportin go f olddebt swa ssubstantial .Th eactua ldeb tpositio namounte d toa highleve lo f$12 8pe rhousehold .However ,i nspit eo fth efac t thathousehold swer eoverextended ,i twil lb eclea rfro mth eabov e thatthe ywer equit esuccessfu li nacquirin gloan sa tth eloca l creditmarket .Loca lcredi tplay sa critica lrol ei nth eris k diffusionstrategie so fhouseholds .

6.3.3 Assetcomposition ,ne tworth ,an dth ehousehol dris k sensitivity Theasse tcompositio nan dne twort hpositio no fhousehold sa so f March 1982,resultin gfro mth eabov einvestmen tactivities ,i s presented inFigur e6.3. 2 togetherwit hth esam edat afo rApri l 1979. Theearlie rdefine d rulesfo rdepreciatio no fasset s (Section5.1.3 )ar eals oemploye dhere .Durin gth einvestmen t period therea lpric eo flan di sconsidere d tob econstant ,i.e. , thenomina lincreas ei nlan dprice si sassume d tob eequa lt oth e increasei nth eearlie rdefine dVPP-index .Th eactua lcos to f maintenance,repairs ,an dadditiona lconstructio n isadde dt oth e initialpresen tvalu eo fhousin gasset si nth eyea rsuc h investmentstak eplace .Simila rt oland ,i ti sassume d thatth e realprice so fstructure san dequipmen tremaine dconstant . However,rea lprice so flivestoc k (inparticula rworkin ganimals ) increased duringth eobservatio nperio dan dar e- togethe rwit h stockaddition sdu et onatura lgrowt han dbirt h- include d inth e valuationo flivestoc kassets .Financia lan dinventor yasset sar e deflated byth eVPP-index .Sinc epreviou sinvestment si neducatio n areno taccounte d fori nth einitia lbalance ,th einvestment si n humancapita lar eonl yshow na spar to fth ene twort hcolum no f thetermina lyea ri norde rt ofacilitat ea bette rcompariso n betweenth einitia lan dtermina lasse tbalance .

Duet over ygoo dric ecro pproductio ncondition si nth eseason so f 1980-81an d 1981-82followin gth epoo rric eproductio nseaso no f 1979-80,tota lne twort ho fal lhousehold stake ntogethe r increased substantially.Whe ninvestment si nhuma ncapita lar e excluded,tota lasse tholding sincrease dwit h25 %durin gth ethree - yearperio do f1979-82 ,fro m$103 6pe rhousehol d inApri l1979 ,t o $1293i nMarc h 1982.Excep tfo rth eyoun gnon-surplu shousehold s showinga declin ei nasse tholding so f15% ,al lhousehold ssho wa n increasei nasse tholdings ,wit hth eyoun gsurplu shousehold s showingth elarges tincreas e (50%),followe d byth emiddle-age d surplushousehold s (36%),an da ta muc hlowe rleve lth emiddle - agednon-surplu shousehold s(19% )an dol dsurplu shousehold s (15%).

Whentakin gint oaccoun tinvestment si nhuma ncapital ,th etota l assetholding sincrease dwit hmor etha n50 %t oa leve lo f$156 6 perhousehold .Wit hinvestment si neducatio nincluded ,th emiddle - 160

middle-agednon - surplushousehold s

LEGEND

| I ricestoc k F^3 casho nhan d C3 borrowing lending fansasset s livestock housing consumerdurable s April '79 to*** '82 April '79 March '82 _ land \/A education

2800

2400

2000

1600

1200 -

800 .

400 .

April '79 torch '82 April '79 Kirch '82 April '79 March '82

Fig.6.3. 2 Changesi nasse t composition andne t worthfo rth eperio d of April 1979t oMarc h 1982($ ) 161 agednon-surplu shousehold ssho wth elarges tincreas ei nasse t holdings (77%),closel yfollowe d byth emiddle-age dsurplu s householdswit h75% .Th eyoun gsurplu san dol dhousehol d categoriessho wa nincreas eo f50 %an d45% ,respectively ,wherea s theyoun gnon-surplu shousehol d stillsho wa declin ei ntota l assetholding so f11% .

Exceptfo rsubstantia lne tinvestment si nric estocks ,hous e constructionan deducation ,othe rasse tholding sremaine dfairl y constanto naverage .O nth etermina ldat eo fth einvestmen tperio d (March 1982),asse tholding swer ecompose do f60 %fixe dasset s (comprisinga smajo rcomponent s15 %land ,18 %livestock ,an d18 % housing); 17%investmen ti nhuma ncapital ;18 %ric estocks ;an d4 % positivefinancia lasset s(cas ho nhan dan dlending) .A sshow nb y Figure6.3.2 ,al lhousehold ssho wa nincreas ei nric estock s compared toApri l1979 ,especiall yth eyoun gan dmiddle-age d surplushousehol dcategories .Togethe rwit hth eol dhouseholds , theyhav eric estock stha tar emor etha nfou ran da hal ftime s largercompare dt oth eric estock so fth enon-surplu shouseholds . Differencesi nric estock sar eeve nmor epronounce dwhe ncompare d ona pe rconsume runi tbasi si nwhic hcas esurplu shousehold shav e ricestock stha tar esi xtime slarge rtha nthos eo fnon-surplu s householdso naverage .Als olivestoc kasset so fnon-surplu s householdsar esubstantiall y belowthos eo fth esurplu shousehold s inth etermina lyear .A smentione dearlier ,a numbe ro fthes e householdsjdono thav ethei row ncarabao ,bu tren tthe mfro mothe r personso na sago dbasis ,wherea sother shav ea co winstea d ofa carabao,sometime sals oo na sago dbasis .Th elivestoc kasset sfo r theyoun gnon-surplu shousehold sdecline ddu et oth esal eo fcows , whereaslivestoc kasset sslightl yincrease d forth emiddle-age d non-surplushouseholds .Als ofo rth esurplu shouseholds ,livestoc k assetsremaine d fairlyconstant ,showin ga sligh tincreas efo rth e middle-agedan dol dhousehold san da sligh tdecreas efo rth eyoun g households.Fo ral lhouseholds ,far masset sremaine dfairl y constantdurin gth einvestmen tperiod ,indicatin g thatinvestment s weremainl yuse dfo rth ereplacemen to fol dequipment .Bot hyoun g surplusan dmiddle-age dnon-surplu shousehold ssho wa substantia l increasei nconsume rdurables ,wherea sals oth eyoun gsurplu s householdssubstantiall y increased thevalu eo fthei rhouse s throughmaintenanc ean dextension .

Duet oa declin ei noutstandin gdebts ,o naverag eth eincreas ei n networt ho fhousehold s(tota lasse tholding sminu sdebt s outstanding)o f32 %(o r60 %whe nincludin ginvestment si n education)i sabov etha to fth eincreas ei ntota lasse tholdings . Theincreas ei nne twort h (includinginvestment si n education)i shighes tfo rth emiddle-age d householdswit h103 %an d 86%fo rth esurplu san dnon-surplu shouseholds ,respectively , followed byth eol dan dyoun gsurplu shousehold sshowin gbot ha n increaseo fabou t50% .A sth eonl yhousehol d category,th eyoun g non-surplushousehold ssho wa declin ei nne twort ho f4% . 162 Risksensitivit y Giventh eabov easse tholding san dth eearlie rdetermine dminimu m incomerequirements ,i ti sno wpossibl et odefin emor eprecisel y theris ksensitivit yo fth evariou scategorie so fhouseholds .Fo r assetst oserv ea sa hedg eagains tunexpecte d shortfallsi n income,the ymus tb eeas yan dquic kt oliquidat ean dmus tno t seriouslyaffec tth ecapita lintegrit yo fth efar mholding .Th e latteraspec trefer st oth eimportanc eo fa nasset' sincome - generatingrole .Liquidatio no fcurren tassets ,lik einventories , arepar to fth ehousehold' susua loperation .Thei reffec to nth e totalasse tvalu ei sreflecte ddirectl yi nit sbalanc esheet .I n contrast,liquidation so fothe rasset ssuc ha sfar mimplements, ; machineso rworkin ganimal sdeplet eth efar mhousehold' sincome r generatingcapacit yan dma yreduc eth eproductio ncapacit yo fth e farmb ymor etha nth easset' svalue .Asset sbecom eles sliqui da s theirpotentia lsal ereduce sth efirm' svalu eb ymor etha nthei r expected sales'value .

Exceptfo rcurren tassets ,ric ei nstoc kan dcas ho nhan d (asfa r ascoul db eestablishe dhousehold sd ono tavai lo fjewelr yo ran y otherluxur yitem stha tca neasil yb eliquidated) ,al lothe r assetsca nb econsidere dt ohav ea lo wliquidit yvalue .Apar tfjro m humancapita lasset s (i.e.,education )whic hhav en odirec t liquidityvalu ewhatsoever ,th esal eo rpledgin go fland , livestockasset s(mainl yconsistin go fworkin ganimals) ,an dfar m implementswoul dseriousl yaffec tth eproductio ncapacit yo fthf e farmholding ,apar tfro mth efac ttha tpledgin go rsal eo flan d requiresth ecooperatio no fothe rfamil ymembers .Th esal eo f housesobviousl yaffect sth efunctionin go fth ehousehold ,whic h alsoapplies ,t oa lesse rextent ,t oconsume rdurables .Althoug h fixedasset ssuc ha slan dan dworkin ganimal swil lb emortgage do r solda sa las tresort ,the yar eno tconsidere da hedg efo rperiod s oflo wincom eb yfarmer san dar ethu sno tconsidere da spar to f theris ktakin gcapabilit yagains twhic hrisk yprospect sar e evaluated.Positiv efinancia lassets ,comprisin goutstandin gcas h andkin dloans ,ar eb ynatur edifficul tt oliquidate .The ymainl y constituteloan si nth econsumptiv espher egive nt oclosel y relatedperson smakin gi tdifficul tt oenforc eloa nrepayment .

Thus,i nassessin gth ehousehold' sris ksensitivit yonl yth e currentasset s 'ricestock san dcas hsavings 'ar etake nint o account.Apar tfro mthes eliqui dassets ,a secon ddeterminan to f risksensitivit ywil lb eth eexpecte d surplusincome .Instea do f employingth eearlie rdefine d surplusproductio ncapacit yo fthf e farmholding ,th eactua lsurplu sincom ei sno wused .Thi sincomi e isdefine da sth erealize daverag ehousehol d incomeabov eminimu m incomerequirement sdurin gth ethre eyea robservatio nperio dof . 1979-81,thu sals oincludin gincom ederive d fromwag elabou ran d self-employednon-agricultura lactivitie sa swel la sremittance s fromchildren .I tshoul db enote dtha tthi sactua lsurplu sincom e figurelikel yoverestimate sth e 'average'surplu sincom eearnin g capacityo fhousehold sa stw oyear sou to fth ethree-yea r observationperio dexperience d verygoo dagricultura lproductio n 163 conditions.I twil lcertainl yoverestimat eth esurplu sincom e earningcapacit ya tth estar to fth eobservatio nperio ddu et o changesi nagricultura ltechnology .Further ,th ehousehold' s capacityt oborro wfund sfro mexterna lsource sha st ob e considered.I twil lb eassume d thatthi si snegativel yassociate d withth eleve lo foutstandin gdebt san dpositivel ycorrelate dwit h theleve lo fsurplu sincom ean doutstandin gloans .Base do nthes e considerations,th eris ksensitivit yinde xi sdefine da s

(Ac+ Ys )- ( D- L ) MIR whereY si ssurplu sincome ,A ccurren tassets ,( D- L )th ene t debtpositio n (debtsoutstandin gminu sloan soutstanding) ,an dMI R theminimu mincom erequirement so fth ehousehold .Tabl e 6.3.7 showsthi sinde xfo rth evariou scategorie so fhousehold sbot ha t thestar tan den do fth eobservatio nperiod .I tshoul db enote d thatth einde xdefine sris ksensitivit y solelyi nfinancia lterms . Theris kreductio neffec to fampl eavailabilit yo ffamil ylabou r isno taccounte dfor .

Basically,thi smor eaccurat ecalculatio no fth ehousehol dris k sensitivitydoe sno tchang eth epictur eo fdifference si nris k sensitivitybetwee nhousehold sa searlie rpresente di nSectio n5. 3 (2).I ti sclea rtha tbot hnon-surplu shousehol dcategorie ssho wa highsensitivit y toincom eris kcompare d toothe rhousehol d categoriesbot ha tth estar tan da tth een do fth eobservatio n period.Althoug hth eyoun gnon-surplu shousehold ssho wa substantialimprovemen ti nth eris ksensitivit yinde x(despit ea n increasei nminimu mincom erequirements )du et oa nincreas ei nth e currentasse tpositio nan da declin ei noutstandin gdebts ,the y

Table6.3. 7 Determinationo fth ehousehold' s risk sensitivity index($ ) -Non-surplu s- Surplus Mean young medium young medium old April197 9 (1)Liqui d asset holdings a) 160 48 70 175 177 328 (2)Expecte d annual surplus income b) 378 75 143 401 620 652 (3)Expecte d liquidity situation(1+2 ) 538 123 213 576 797 980 (4)Ne tdeb t position c) 82 75 89 -9 207 50 (5)Minimu m annual income requirementsd ) 380 320 467 232 552 328 Risk sensitivity index ((3-4)/5) 1.37 0.15 0.27 2.52 1.07 2.84 March 1982 (6)Liqui d asset holdings 302 78 115 553 407 356 (7)Expecte d annual surplus income 378 75 143 401 620 652 (8)Expecte d liquidity situation(6+7 ) 680 153 258 954 1027 1008 (9)Ne tdeb t position 3 39 112 -39 59 -158 10)Minimu m annual income requirements 381 384 416 264 544 296 Risk sensitivity index ((8-9)/10) 2.03 0.30 0.35 3.76 1.78 3.94 a) Liquid assets include product inventoriesan dcas ho nhand . b) Average annual surplus income realized duringth eperio d 1979-82. c) Debtsminu soutstandin g loanswit h other households. d) Calculated minimum income requirements basedo n'numbe r ofconsume r units* $80' . 164

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n r rra •rH» •P •H in Qn. -p m in 1in0 •n •H -1 (T •H rH in n rH r() • m in . ~i IM n CIm) • i. ID r r -P (J l-c u- m o s; in -o • r n rH M -P O m JZ -P m ID •p r- in ID LL m o rH r*H- SZ in •H m r M 3 n n. rH Ul Q. m « M , m <1- 3 i/) O in •D rn tn n c •H 3 i»i M o • n> >- I sl^^ .i i— —1 1— ID a m a) •H .c 166 stillhav ea ver ylimite dcapacit yt oovercom epoo rproductio n ' yearso runexpectedl yhig hexpenditures .I tshoul dals ob enote d thatthi simprovemen ti nshort-ru nris ksensitivit yoccurre da t theexpens eo fth esal eo flivestoc kassets .Th emiddle-age dnon - surplushousehold sals osho wa sligh timprovemen tdu et oa strongerincreas ei ncurren tasset scompare d toth eincreas ei n outstandingdebts .Al lsurplu shousehol dcategorie ssho wa relativelylo wsensitivit yt oincom eris ka tth estar to fth e observationperio dan da furthe rdeclin ei nris ksensitivit y duringth eobservatio nperiod .However ,relativ et oth eyoun gan d oldhousehold si nthi scategory ,middle-age d householdsar ei na muchweake rposition .

Figure6.3. 3 showsth eseasona lpatter ni nne tliqui dasse t position (riceinventor yan dcas ho nhand )a swel la sne t indebtednessleve l(outstandin gdebt sminu soutstandin g loans)b y monthfo rth eperio dApri l 1979unti lMarc h1982 .I tappear stha t especially foryoun gnon-surplu shousehold si ti svirtuall y impossiblet oaccumulat esufficien treserve st oserv ea sa hedg e againstlo wincomes .Despit ea hig hoveral lrat eo ffamil ylabou r utilization,th ehousehol d incomei slo wrelativ et oth eminimu m household incomerequirements ,becaus eo fa relativel y unfavourableworker-consume r ratio.Force d byshort-ter m subsistencepressures ,thes ehousehold shav et oemplo ythei r scarcelabou rresource si nactivitie stha tprovid eimmediat e incomedurin gth elea nmont hperiod ,notabl ythroug hwag elabou r activities.A sa resul tthe yar eles sabl et odevot ethei rlabou r resourcesan dattentio nt oth emanagemen to fself-employe d agriculturalproductio ncompare d toothe rhousehol dcategorie s causing- togethe rwit ha lo wleve lo fcomplementar y inputus e- lowreturn so na pe rhectar ebasis .Moreover ,a substantia lpar t ofth esurplu sincom erealize di ngoo dproductio nyear si spai dt o interesto nloan sacquire di npoo rproductio nyears .

Witha mor efavourabl eworke rt oconsume rratio ,middle-age dnon- » surplushousehold sar ei na muc hbette rpositio nt odevot efamil y labourt oself-employe d agriculturalactivitie swhil ea tth esam e timeprovidin g forshort-ter mincom erequirement sthroug hwag e labouractivities .I nfact ,thes ehousehold sappea rt ofac e seriousproblem si nfindin g"remunerativ eemploymen tfo rthei r labourresources .Still ,compare d toth eyoun gnon-surplu s householdcategory ,thes ehousehold sar eabl et orealiz ea substantialsurplu sincome .Thi sincome ,however' ,i sno tuse dt o createreserve st oovercom eshort-ter mincom edeficits ,bu t instead isinveste d- an dthu simmobilize d forth eshort-ter m- i n theeducatio no fchildren .Th eutmos timportanc eattache dt o investmentsi nhuma ncapita li sunderstandabl ewithi nth econtex t oflong-ter m security.Give nth elimite dopportunitie st oexpan d theagricultura loperatio na swel la slimite d possibilitiesfo r investmentsoutsid eself-employe d agriculture,th eonl ywa yt o improveth estandar do flivin gan dprovid efo ra sourc eo flivin g forth echildre ni st oai ma temploymen ti nth equalifie djo b marketoutsid eth evillag eeconomy .Fro ma ris kpoin to fview ,th e 167 implicationi stha tthes ehousehold stak esubstantia lshort-ter m risksbot hi nterm so fkeepin glo wreserve san drestrictin g investmentsi nagricultura linput st osafeguar d long-term survival,wherea si nthemselve sthes elong-ter minvestment sar eb y nomean swithou tth eris ko fa lo wpay-off .A sa resul tals oth e middle-aged non-surplushousehold sar ei na ver ytigh tbudge t situation.Since ,investment si neducatio nprimaril yoccu rdurin g themonth so fApri lo rMay ,thu sa tth estar to fth egrowin g season,i tfurthe rweaken sth efinancia lbasi so fth ehousehol da t thetim einvestment sar erequire d foragriculture .

Thesam e(bu tmor epronounced )seasona lpatter ni nth ene tliqui d assetpositio ni sshow nb yth emiddle-age d surplushouseholds . Becauseo fa muc hlowe rleve lo fris ksensitivity ,thes e householdsca naffor da muc hhighe rabsolut eleve lo findebtednes s tofinanc eeducatio nan dar eabl et ocreat ea substantia lliqui d assetreserv ea tth een do fth estud yperiod ,i.e ,afte rtw ogoo d productionyear s(Figur e6.3.3) .Compare d toth eothe rhouseholds , bothth eyoun gan dol dhousehol dcategorie ssho wa ver ylo wleve l ofris ksensitivity .Throughou t thestud yperiod ,thes ehousehol d categoriessho wa positiv ene tliqui dasse tbalance .

Summarizing,i ti sclea rtha thousehold sdiffe rsubstantiall yi n theirabilit y totak erisk sa swel la sth ecapacit y toimprov e uponthei rris ktakin gability .Wit ha disposabl eincom ebarel y aboveminimu mincom erequirements ,th eexpenditur epatter no fbot h non-surplushousehol dcategorie si smor eo rles sfixe db ypur e subsistencerequirement ssuc ha sric econsumptio nan dothe rdail y householdneed san dth enecessar yexpense sfo reducation .I nshar p contrastwit hth esurplu shouseholds ,ther ei shardl yan yroo mfo r creatingreserve so rfo rcuttin gbac ko nhousehol d expenditures fornon-surplu shouseholds .Althoug hth eloca lcredi tmarket ,i n particularlendin gbetwee nclosel yrelate d persons,provide sfo ra goodexterna lbuffe ragains tperiod so flo wincomes ,i ti sa n expensivefor mo fhousehol d sustenance.Th enecessit y tous e creditt osustai nfoo drequirement san deducatio nexpense s directlyaffect sth eabilit yo fpoo rhousehold st oinves ti n productiveactivities .Household sma yno tus eal lavailabl ecredi t resourcesbu tkee pcertai ncredi treserve si nanticipatio no f possibleshortfall si nincome .I naddition ,interes tpayment so n theseloan susur pa larg epar to fth esurplu sincom etha ti slef t aftersubsistenc eneed sar ecovered ,puttin gadditiona l restrictionso nth ecapacit yo fnon-surplu shousehold st oinves t inproductio nactivitie san dt oincreas ethei rsurplu sincom e earningcapacity .Further ,household shav et ob ecarefu li nloa n acquisitionan ddeb tmanagemen ti norde rt olimi tth eris ko fa spirallingdeb taccumulation .Becaus eo fthes efactors ,non - surplushousehold sar ehighl ysensitiv et ovariation si nincom e and,specifically ,surplu sincome .Eve nmino rcas hinvestment si n agriculturesuc ha sfertilize ro rth elos so fseed sdu et o drought,especiall ydurin gth eearl ystag eo fth egrowin gseason , representsubstantia lfinancia lrisks . 7 INTENSIFICATIONO FLAN DUSE :CRO PACTIVIT YCHOIC EAN D INNOVATIONRIS K

Thecas estud ypresente d inthi schapte rdeal swit hth eissu eo f intensifying landus ethroug hth eintensificatio no fric ecro p production.Give nth elimite d scopefo rincreasin g incomethroug h activitiesoutsid eagricultur ea swel la sfro mnon-cro pactivitie s inagriculture ,lan dus eintensificatio ni sa nimportan tmean so f increasinghousehol d income.Chapte r4 presente da brie fhistor y: ofth eintroductio no fth eso-calle dHY Vtechnolog yi nth estud y village.I twa sindicate d thatfarmer sthroug how nexperimentatio n playeda nactiv erol ei nth eadaptatio no fthi stechnolog yt o rainfedconditions .Thi schapte ri sprimaril yconcerne dwit hthe i secondstag eo ffarmers 'adaptatio no fth eHY Vtechnology ,i.e., , doubleric ecroppin gi nrainfe dfields .

Throughth eintroductio no fver yshort-maturin gHY Vvarietie si n themi d 1970s,farmer sha dth eopportunit yo fgrowin gtw o ' consecutiveric ecrop si nrainfe d fields,provide dthes efield s hadacces st osom esupplementar y sourceso firrigation .Fo rfield s fullydependen to nrainfall ,th etechnolog yo fdoubl eric e croppingwit hth eemploye dcro pestablishmen tmethod so f transplantingo rdirec tseedin gi nwe tsoi lcondition sprove dt o bemarginal ,becaus eo fth ehig hincidenc eo fdrough tfo rth e secondric ecrop .Subsequently ,farmer sattempte d toadvanc eth e establishmentdat eo fth esecon dric ecro pt oa nearlie rdat eb y employingdr yseedin go fth efirs tric ecrop .Thi spractic eprove d tob es osuccessfu ltha tfiv eyear safte ri twa sfirs tattempte d (1977),abou thal fo fth etota lric eare awa sgrow nt odoubl eric e crops.

Againstthi sbackgroun do flan dus eintensificatio nthroug h multipleric ecropping ,a nattemp twil lb emad et oconceptualize , structure,an danalyz eth eris kfacto ri ncro pplannin gdecision* . Theintroductio no fdoubl eric ecroppin gi nth ecours eo fth e studyperio dprovide sa nexcellen topportunit yfo ranalyzin gth e possibleeffec to fris ko nadoptio nbehaviour .Thi stechnolog y requiresa basi cchang ei ncro pproductio nplannin gan dmanagemert t asi tinvolve sth eincorporatio no fa nentirel yne wcroppin g patternint oth eexistin gcroppin gsystem .Emphasi swil lb eplace d onth epossibl eeffec to fresource-induce d riskaversio nb y comparingadoptio nbehaviou ro fsurplu san dnon-surplu s households.

Asa nintroductio nt oth eris kfacto ri nric eproduction ,Sectior t 7.1 providesa detaile d descriptiono fcro pmanagemen tan dris k controli nric ecultivatio nfocusin go nth ewa yi nwhic hfarmer s• perceiverisk san dris kmanagement .Thi slargel yqualitativ e assessmento fris kfactor swil lfor mth ebasi sfo rth eselectio n oftw ocase sfo rwhic ha quantitativ eris kassessmen twil lb e attempted:i nthi schapte rrainfall-relate d riskso fdoubl eric e croppingan di nChapte r8 th eoveral lris kinvolve di nfertilize r 169 use.Th ecomplexit yan dproblem sencountere d inadequatel y assessingcroppin gpatter nrisk swil lb ediscusse d inSectio n 7.2 andlimitation st oris kassessmen twil lb eindicated . Subsequently,i nSectio n7. 3 theproces so fdoubl eric ecroppin g introductionwil lb ediscusse dan dfactor sexplainin gdifference s inadoptio nbehaviou rwil lb eidentified .Th eeffec to fth ene w ricetechnolog yo nincrease d stratification inth evillag ewil lb e assessed.

7.1 Risksan dris kcontro li nric ecro pproductio n Environmentalinstabilit yha sa majo rimpac to nth emanagemen tan d outcomeso fagricultura lproductio nprocesses .Du et oth e variability insuc henvironmenta lfactor sa srainfall , temperature,winds ,sola rradiation ,th eincidenc eo fweeds ,an d theoccurrenc eo fpes tan ddiseas einfestation ,th erequire d inputsan doutcome sa swel la sth etimin go fagricultura l activitiesan doperation swithi nactivitie sare ,t osom eextent , uncertain.I nvariou sway sfarmer shav eadapte dagricultura l practicest oenvironmenta linstability .Belo wth evariou sris k factorsi nric ecro pproductio nwil lb ediscusse dan dfarmers ' practicest ocontro lsuc hrisk swil lb ereviewed .

7.1.1 Landpreparatio nan dcro pestablishmen t Agronomicallyth ebes t- als oaccordin gt ofarmer s- an d traditionally themos twidel yuse dmetho do festablishin gric e cropsi stransplantin gseedling s(tanum )fro ma nearlie r established nursery.Nurser ypreparatio nma yeithe roccu rdurin g theearl yonse to fth erainfal lseaso ni nwhic hcas eungerminate d seedsar ebroadcas ti ndr ysoi lcondition s(sabod-samara )o ra t thestar to fth emai nrainfal lseaso ni nwhic hcas epregerminate d seedsar ebroadcas tunt oa puddle d soil(sabo dsabati) .Befor e transplanting,th efiel di susuall ythoroughl yploughe dfollowe d byon eo rtw oroug hharrowings .Alternativ ean dinferio rmethod s oftransplanting ,previousl yuse di ntransplantin g far-awayfield s orothe rfield si ncas eo finsufficien t labourfo rlan d preparationo rlan dtenur euncertainty ,includ eth eso-calle d lahosan dloya-loy amethods .Th elaho smetho dconsist so fon e ploughingfollowe d bya furrowin gan dplantin go fseedling si nth e furrowan dth eloya -loy ametho dinvolve sjus ta furrowin go fth e fieldbefor etransplanting .Bot hmethod sallo wa hilling-u pabou t onemont hafte rtransplantin gemployin ga steel-pointe dwoode n plought ocontro lweeds .The ywer eals opopula rdurin gth eSecon d WorldWar ,whe nth esecurit ysituatio ndi dno tallo wth efarmer' s presencei nth eare afo ra lon gtime .

Theobviou sdisadvantag eo ftransplantin gric ecrop si sth elarg e labourrequiremen t forpullin go fseedling san dtransplanting . Further,i ncas eo fa ver ylat eonse to fth erainfal lseason ,th e establishmento fnurserie sma yge tseriousl ydelaye do rma yno tb e possible.Thus ,i norde rt ocu tbac ko nproductio ncost so rt o quicklyestablis hric ecrops ,farmer semplo yvariou smethod so f directseedin grice .A distinctio nca nb emad ebetwee ndirec t 170 seedingmethod si ndr yan di nwe tsoi lconditions .Th etechniqu e ofseedin gric ei ndr ysoi lcondition sha sbee ni nus ewit h farmersfo ra lon gtime .Wit hth eintroductio no fth eBE- 3ric e variety,farmer sstarte dt ous ea nestablishin gtechniqu eknow na s palay-ang.Thi sseedin gtechniqu einvolve sbroadcastin go f ungerminatedseed si ndr ysoi lcondition sbefor eth estar to fth e rainfallseason .Seed sremai ni nsit uunti lth efirs train sallb w germination.T ofacilitat eearl yseedbe d preparation,th efiel d mustb eploughe da tth estar to fth edr yseaso ni nJanuar yo rth e beginningo fFebruary .A tth een do fMarc ho rApril ,afte ra ligh t shower (thesoi lclod smus tb eslightl ywe tt opreven tcarabao s fromhurtin gthei rfeet )th efiel di sploughe dfo ra secon dtime , followed byseedin gan dincorporatio no fseed sthroug ha thir d ploughing/harrowing.A nalternativ et obroadcastin gi st oplac e theseed si nfurrow s(paray-paray )whic hallow swee dcontro l throughhillin gup .

Forweed yfields ,farmer sals oemploye da metho d knowna ssabog ^ samara,whic hinvolve sth eseedin go fungerminate d seedsi n slightlymois tsoi lcondition sallowin ggerminatio nt ostar t directlyafte rseeding .Thi sestablishmen tmetho d isessentiall y thesam ea sth edr yseedbe destablishmen to fnurserie sfo r transplanting.Wit hth eintroductio no fshor tgrowt hduratio nIR - varietiesfarmer sincreasingl y started usingthi smetho d fordr y seedingfield si norde rt ofacilitat edoubl eric ecropping .Th e • advantageo fthi smetho d istha ti tallow sfarmer st oasses sth e weed infestationafte rth efirs tploughin gan dtha tgerminate d weedsar eploughe dunde rdurin gth epreparatio no fth efield .

Apartfro mthes edr yseedin gmethods ,farmer shav efo ra lon gtim e alsoemploye ddirec tseedin gmethod si nwe tsoi lconditions . Similart oth ewe tseedbe dnurser yestablishmen ttechnique ,th e usualmetho do fwe tseedin gric efield sinvolve stw ot othre e ploughingsfollowe db ya nintensiv epuddlin go fth esoi lthroug ha largenumbe ro fharrowings .Afte rth efiel dha sbee nlevelled ,i t isdraine dan dpre-germinate dseed sar ebroadcas tunt oth epuddle d soil.Wit hth eintroductio no fth eBE- 3ric evariety ,thi sso - calledsaboR-sabat imetho d (sabatiliterall ymean sman y harrowings)becam eles spopular .Accordin gt ofarmers ,i ncontras t toth edr yseede dan dtransplante d BE-3crops ,th eroo tsyste mo f thewe tseede dBE- 3crop sdi dno tpenetrat edee penoug hint oth e soilt ogiv eth erelativel ytal lcro penoug hanchorin gt o withstand strongwinds .A sa resul twe tseede dBE- 3crop softe n lodged.Wit hth eintroductio no fshort-stature d IR-varieties(IR3 0 andIR36 ,bot hwit ha nexcellen tseedlin gvigou ran dgoo d tilleringcapacity ,th ewe tseedin go fric ecrop sha sbecom e popularagain .I nfact ,a smentione dearlier ,thi smetho drapidl y replacedtransplantin ga sth emai nmetho d forric ecro p establishment.

Forloam ysoils ,farmer semplo ya nalternativ emetho d tosabog - sabati.Accordin gt ofarmers ,th elarg enumbe ro fharrowing s ; requiredfo rthi smetho dresult si na ver ycompac tsoi llaye ri n 171 thistyp eo fsoil scausin gproblem si nroo tdevelopmen to f seedlings.Instead ,farmer semplo ya cro pestablishmen tmetho d knowna sminongo .Field sar eploughe da tth estar to fth edr y season,ploughe dagai nwit hth epondin go fwate ri nth efiel d(th e watermus tb eslightl ywarm )afte rwhic hpregerminate dseed sar e broadcastint ostandin gwater .Afte rseeding ,th efiel di s harrowed oncean ddraine dafte ron eday .A simila rmetho dusin g ungerminatedseed si sknow na spalusot .Field sar eploughe dtwice , followed bya roug hharrowing .Th ewate ri sno tdrained ,bu tth e ungerminated seedsar ebroadcas tint ostandin gwater .Th efiel di s drained threet oseve nday safte rseeding .Accordin gt ofarmers , thisi sa ninferio restablishmen ttechniqu ewhic hshoul db euse d incas erapi dcro pestablishmen ti srequired .A nadvantag ei stha t floatingwee dseed swil leithe rb eremove dwit hth edrainag eo f thefiel do rconcentrat ealon gth ebund so fth efield .

Awe tseedin gmetho d particularlyaime da tcontrollin ggrass y weedsi sknow na spalagbung .Simila rt oth esabog-sabat imethod , thefiel d isthoroughl yploughed ,harrowe dan dlevelled .Afte r levelling,wate ri sallowe dt oente rth efiel dunti la dept ho f abouton efoot .Pregerminate d seedsar ebroadcas ti nstandin g wateran dafte rte ndays ,th efiel di sdraine dunti lth etip so f theseedling sbecom evisible .Becaus eth eseedling sar ever yweak , thewate rleve li nth efiel dmus tgraduall y beraise dwit hth e growtho fth eseedlings .Th efiel di sno tallowe dt odrai nearlie r thanthre eweek safte rseeding .Clearly ,thi smetho d requiresa sufficientwate rretentio nan ddrainag ecapacit yo ffields .Also , thefield scanno tb eto olarg ea sth eseedling sma yotherwis eb e destroyed bywate rcurrent scause db ywinds .

7.1.2 Watermanagemen tan drelate drisk s Someo fth emajo rproblem sexperience d inrainfe d riceproductio n relatet oinsufficien tavailabilit yan dcontro lo fwate ri nric e fields.Optima lwate rconditions ,indicate d byfarmer sa sa shallowwate rdept han dpreferabl ya slo wconstan ti nan doutflo w ofwater ,ar eofte ndifficul tt oattain .Becaus eo firregula r rainfallan dlandscap epatterns ,ric eplant sma ysuffe rfro m alternating periodso fwate rshortage san doversuppl yo fwater .

Theprincipa lwa yi nwhic hfarmer scontro lth ewate rleve li n theirfield si sthroug hth eopenin gan dclosin go flevee s(bunds ) surrounding thefields .Durin gperiod so fintermittan trainfal l properwate rcontro lrequire sclos esupervisio no fbun dopenin g andclosing .Fo rfar-awa yfield sthi sma yb edifficul tan di ti s commontha tlevee sar elef tope nfo rsustaine d periods.Fro ma socialan dorganizationa lpoin to fview ,wate rmanagemen ti sbes t characterizeda sa 'firstcome-firs tserved 'system .Although , certainbehaviou rcode sar eestablished ,farmer sar emor eo rles s atth emerc yo fwate rmanagemen tdecision smad eb yfarmer s managingadjacent ,highe rpositione d fields.The yar eallowe dt o blockwate rflow so rt odrai nwate ra tan ytim ei ti sdeeme d necessary.Damag edu et ouncontrolle d drainage- especiall ya 172 problem for newly wet seeded crops- cannot be claimed. A good social relationship with neighbouring farmers is thusa n important pre-requisite for proper water controlmanagement .

Underhand opening of levees of other farmers' fields,however , appears to occur quite often and may lead to social tension between families in the village.Stealin g of water may be a particular problem for fields located far from the village, especially when these fields are surrounded by fields farmed by persons from other villages.Ther e are instances that water was diverted from one field to another through a number of other fields. Poor water control in far-away fields isofte n cited asa reason for growing the relatively tall-statured BE-3 variety and maintaining a low level of overall cropmanagement .

Seedlinfistag e Water management risks during the seedling stage of crop growth differ substantially between direct seeded and transplanted crops. All risks associated with stand establishment of direct seededi crops - particularly dry seeded crops - are non-existing for transplanted crops.Fo r dry seeded rice crops,fou r crop establishment riskswer e identified.

First, uneven and poor germination may result from insufficient germination rainsafte r the rice is seeded.Th e risk of uneven germination and poor stand establishment is increased with poor land preparation prior to seeding and poor seed incorporation after seeding aswel l as the useo f poor quality seed. Uneven germination causes staggered harvests with short maturing varieties.Thi s latter problem doesno t occur with the existing, photo-sensitive varieties.I n case of stand reduction or an uneven stand replanting may be required and, in severe cases,whol e fieldsma y have to be pulled followed by transplanting of seedlings to other fields.T o reduce the risk of thin standsan d facilitate transplanting in case of uneven germination, farmers generally use high seeding rates for dry seeded ricecrops .

Second, stunted growth of rice seedlings due to drought shortly after seed emergence is amajo r risk which cannot be controlled by farmers.Dependin g on the duration of the drought period, severe stand reduction or complete crop failure may result.Th e extent to which such droughtma y occur dependso n the seeding date and whether seeding is carried out under dry or slightly moist conditions.Wit h the former method seed emergence depends on sufficient germination rainswhic h are estimated to be in the range of 50 to 125m m (Furoc et al, 1978).

Third, seed damage due to submergence of seeds caused by an early ponding of water in the field may be a severe problem with late dry seeded rice crops,bu t may also be a problem with early dry seeded crops in case germination rains are late and heavy. Although drainage may solve the problem toa certain extent, continuous rainsma y prevent effective drainage,particularl y in 173 waterway fields.Submergenc eo fungerminate dseed swil lgenerall y resulti na complet estan d loss.Fo rthi sreason ,seedin gunde r slightlymois tcondition s(sabog-samara )i susuall ypreferre da t laterseedin gdate si norde rt oenhanc edirec tgerminatio nt o reduceth eris ko fsubmergenc eo fseed sdu et oearl ywate r accumulation.

Fourth,sudde npondin go fwate ri na dr yfiel dwit hyoun gric e seedlings(withou tnecessaril y sustained seedlingsubmergence )ma y resulti nstunte dgrowt han dyellowin go fleaves ,a conditio n whichi slocall yknow na snaga-puras .Thi sconditio nresult sfro m thesudde nchang efro mdr yt ofloode dsoi lconditions .I nthi s process,variou schemica lreaction stak eplac etha tma yretar d rootdevelopment ,inhibi tnutrien tabsorption ,an dcaus eroo trot . Accordingt ofarmers ,thi sconditio nca nb eremedie db yth e applicationo ffertilizer .

Twowate rmanagemen trisk sspecificall y relatet owe tseede d crops.First ,insufficien tmoistur econdition sdurin gth eseedlin g stagear eals ocommo nfo rwe tseede dric ecrops ,becaus eprio rt o seedingdrainag et ofiel dcapacit yi srequired .However ,i n contrastwit hsoil so fdr yseede dric ecrops ,puddle d soilsca n becomever ycompacte d (bagtik)i nth eproces so fdryin gan dma y remaini nsuc hconditio neve nafte rth efiel di sfloode dagain . According tofarmers ,thi sha sa nunfavourabl eeffec to ngrowt h andth eonl yremed yi st oimmediatel y fertilizeth ecro pafte r sufficient)wate ri savailabl ei norde r 'tomak eth esoi lsoft ' (hagpok).

Second,unexpecte d heavyrainfal lca nfloo dwe tseede d ricefield s prematurelycausin gdamag eb yfloatin gth eseeds ,coverin gpre - germinatedseed swit hmud ,o rwashin gou tbarel yemerge d seedlings.Concentratio no fseed so nth elowe rpart so fth efiel d maycaus ea patter no fscattere dgroup so fric eseedling stha t requiresreplantin ga tth estar to fth evegetativ egrowt hstage . Shallowditche si nth efiel dar ecommonl yuse dt odrai nlowe r spotsi nth efiel da swel la st ochanne lwate rfro mhighe rfield s throughth efiel di na norderl yway .Th eus eo fperiphera lditche s alongth ebund si sles scommon .

Finally,sustaine d submergenceo fyoun gric eseedling si sa majo r watermanagemen trelate dris kt obot hdry -an dwe tseede dric e crops.Wate rrequirement sar elo wa tth eseedlin gstage .I fseed s aresubmerge d fora sustaine dperiod ,th edevelopmen to fradicle s (primaryroots )i saffecte d bya lac ko foxyge nsuppl y (DeDatta , 1981).Thi seffec ti slocall yknow na sdar-os ,whic hliterall y means 'damagedb ywater' .I ti scharacterize d byfarmer sa s stuntedgrowt han dyellowin go fleave sdu et osudde nsubmergenc e ofseedlings .The ydistinguis hi tfro mnaga-pura sbecaus ei t cannotb eremedie dwit hfertilize rapplications .Thi smake ssens e assubmergenc ehinder sth eroo tdevelopmen to fseedling s ('you shouldwai ton eo rtw oweek swit hth eapplicatio no ffertilizer') . 174 Fortransplante d ricecrops ,n oearl ywate rmanagemen trelate d riskfactor sar epresent ,excep ta dela yi ntransplantin gwhich i mayoccu rdu et oinsufficien tmoistur econdition sa tth etim eo f transplanting.Dependin go nth eperio dbetwee nseedbe d establishmentan dtransplanting ,suc hdela yma yseriousl yreduc e yieldso fshor tmaturin gvarietie so rma ycaus elos so fseedlings .

Vegetativegrowt hstag e Followingth eseedlin gstage ,a shallo wwate rdept hfacilitate s tillerproductio nan dpromote sfir mroo tanchorag ei nth esoil. ; Excessivewate ra tth evegetativ egrowt hstag eseriousl yhamper s rootingan ddecrease stille rproduction .Lea fblade san dlea f sheathso fth esubmerge dplant sbecom eweak ,tur npal egreen ,an d breakeasil y (DeDatta ,1981) .Th eris ko fsubmergenc eo fric e; seedlingsremain sdurin gth eearl yvegetativ egrowt hperiod ,bu t willgraduall yceas ea sth eplan tgain sheight .However ,du et o poorsurfac edrainag eo fth elowe rpar to fth eric eplain , submergenceris kremain spresen tfo rcrop splante d inthi sarea .

Theeffec to fdrough tdurin gth evegetativ estag ei sconsidere d severerfo rwe tseede do rtransplante d cropscompare dt odr y seededcrops .A sindicate dearlier ,puddle d soilsbecom ever y compactedafte rdryin gan dcrac keasily .Lo whydrauli c conductivity duet over yfin etexture d soilsma ylea dt omoistur e stresso fric edurin gperiod so flo wwate rsupply .Whil eenoug h availablemoistur ema yremai ni nth einterio ro fth eclod so f thesedr ysoils ,i ti sto oslowl yrelease dt oadequatel ysuppl y theric eroots .

Suddenfloodin go fa soi lnea rth ecrackin gstag e(bagti ksoils ) isobserve d byfarmer si nth eare at ocaus estunte dgrowt hwithou t theleave so fth eric eplan tturnin gyellow .Locall ythi seffec t isknow na snakusgan .Thi sconditio ndoe sno toccu ri nreasonabl y wet, fullycracke do rnon-puddle d soils.Farmer sconside r applicationo ffertilize rafte rrainfal lt ob ea neffectiv emetho d ofremedyin gthi scondition .

Stuntedgrowt ho fric eplant sma yals ooccu ri nfield swhic har e stronglydeficien ti ninterna ldrainage .Th enegativ eeffec to f prolongedan dcomplet ewaterloggin go ncro pperformanc ema yresul t fromphosphoru sdeficienc yan di sdemonstrate d byalleviatin gstuc h conditions.Improvemen to fdrainage ,eve ntemporary ,wil lcaus e mostnutritiona ldisorder st odiminis ho rdisappear .Nitroge n availabilityma yals ob elo wi npermanentl yo rsemi-permanentl y waterlogged ricelands .Unde rsuc hconditions ,mineralizatio no f soilnitroge ni srestricte dan dnitroge ndeficienc yma yoccur , evenwhe nth enitroge nconten to fth esoi li shig h(Moorma nan d vanBremen ,1978) .Locally ,thi sconditio ni sknow na slus-o nan d isassociate dwit hfield stha tar elocate dnea rsprings .

Reproductivegrowt hstag e Reproductivegrowt hstart swhe nmaximu mtillerin gi scompleted .I t includesth epanicl eprimordi adevelopment ,booting ,heading ,an d 175 floweringstages .A larg eamoun to fwate ri sconsume ddurin gth e majorpar to fth ereproductiv egrowt hperiod ,whic hexplain swh y ricei sparticularl y sensitivet omoistur estres sdurin g reproductivegrowth .Drough ta tthi sstag ecause ssever eyiel d damage,particularl ywhe ni toccur sfro mth epanicl einitiatio nt o theflowerin g stages.Matsushim a(1962 )reporte d thatric ei smos t sensitivet omoistur estres sfro m2 0day sbefor eheadin gt o1 0 daysafte rheading .Increase d paniclesterility ,cause db yimpede d panicleformation ,heading ,flowering ,o rfertilization ,occur si f theamoun to fmoistur ei sinsufficient .Clearly ,dependin go nth e plantingdate ,secon dric ecrop shav ea muc hhighe rchanc eo f droughtstres sdurin gth ereproductiv egrowt hstag ecompare dt o ricecrop splante da tth ebeginnin go fth egrowin gseason . Excessivewate ri sals oa limitin gfacto ra tth ereproductiv e stage,particularl ya tth ebootin gstage ,whic hma ycaus ea decreasei ncul mstrengt han dincreas elodging .

Afterth ereproductiv egrowt hstage ,littl ewate ri sneede dfo r ripening.Hence ,n oyiel ddamag ewil loccu rdu et odrough ta tthi s stage.However ,heav yrainfall ,hig hwinds ,an dstron gwate r currentsma ycaus elodgin go fric ewhic hma ydamag eth egrai n quality,resul ti ngerminatin g seedsan da nincreas ei nlabou r requirement forharvesting .A specifi cpost-harves tproble m related tofirs tHY Vcrop sconcern sth edryin go fgrain seithe r forsal eo rfo row nstorage .Becaus ethes ecrop sar eharveste d duringth eheigh to fth erain yseason ,farmer ssometime sencounte r difficultiesi napplyin gth etraditiona lmetho do fsun-dryin g grainso nmats .

7.1.3 Incidenceo fweed san dwee dcontro l Weedsi ncultivate d fieldsreduc eric eyiel dan dqualit yb y competingfo rspace ,nutrients ,water ,an dlight .Wee dcompete s withric eplant sespeciall yfo rwate ran dnutrients .Competitio n forwate ri smor eseriou si nrainfe dric etha nfo rirrigate dric e becausemoistur ei softe nlimiting ,especiall yfo rdirec tseede d ricecrop sdurin gth eearl ystag eo fcro pgrowth .I ncompetin gfo r nutrients,weed swil labsor ba smuc ho rmor etha nth ecro pplant . Furthermore,th edamag ecause db yweed sdurin gth eearl ygrowt h stageo fth eric ecro pi smor eseriou scompare d tocompetitio n duringth elate rgrowt hstage s(D eDatta ,1981) .Weed sma yals o intensifyth eproble mo fdiseases ,insects ,an dothe rpest sb y servinga sthei rhosts ,an dma yinterfer ewit hagricultura l operationsan dreduc eth eefficienc yo fharvesting .Th eimportanc e ofwee dcontro li nric ecro pproductio na swel la sth elabou r intensityo fth eweedin goperatio ni sbes tindicate d byth efac t thatth eloca lwor dfo rfarme r 'mangunguma'literall ymean s 'weeder'.

Cropcompetitio nfro mweed svarie swit hth etim eo fwee d infestation,th etyp eo fweed san dthei rdensit yan dth estag eo f thegrowt ho fweeds .Weed sar eclassifie da sgrasses ,broadlea f weeds,an dsedges .A numbe ro fweed sconsidere d importantb y 176 farmersar egive ni nAppendi xIV .Th emos tseriou scompetitio ni s fromgrasse salon esinc ethe ymak ealmos tth esam edeman dupo nth e environmentbecaus eo fsimila rgrowt hhabit sa sric ei nterm so f rootgrowt han dfoliag echaracteristics .The yar eals omor e difficultt ocontro lcompare dt oth eothe rtw owee dtypes .

Theexten tt owhic hweed sca nb econsidere da ris kfacto rdepend s onth edegre et owhic hwee dincidenc ei spredictabl ea swel la s theexten tt owhic ha nactua lwee dinfestatio nca nb econtrolled . Withrespec tt oth efirs tfactor ,farmer sgiv eth eimpressio n- andobservatio ntend st oconfir mthi s- tha tthe yar equit eabl e topredic twee dincidenc efo rspecifi cfields .Suc hpredictio ni 3 basedo nthei rknowledg ewit hrespec tt oth ewee dan dcro phistor y ofthei rfield sa swel la sth epreviou syear' swee dincidenc ean d levelo fwee dcontrol .However ,th eactua ldegre eo finfestatio n isstil llargel ydependen to nth eactua lrainfal lpatter nan d watercondition si nth efiel ddurin gcro pdevelopment .Certai n weed specieswil lonl ygerminat eunde rparticula rmoistur ean d temperaturecondition san dma ysta yi nsit ui nth esoi lfo r prolonged periods.Fo rinstance ,man yweed s(e.g .grasses )wil l notgerminat eunde rfloode d fieldcondition san dwhe ngerminate d willb ekille dwhe nsubmerge d forsom etime .Du et opoore rwate r controlconditions ,highe rpositione d fieldsar econsidere d tob e moresusceptibl et owee dinfestatio ncompare d tolo wlyin gfielfi s wherecontinuou sfloodin gi spossible .Th ewors twee dinfeste d fieldsar efoun djus tbelo wth euplan d fieldswher esubstantial ! amountso fwee dseed sar edeposite d fromuncontrolle dwee dgrowt h inuplan darea sa swel la si nfield ssituate da tth een do f waterwayswher estagnan twate rals oresult si na depositin go f weedseeds .

Iti sals oa commo nobservatio ntha tfields ,wher ecarabao sare , allowed tograz edurin gth edr yseason ,ar emor einfeste dwit h weedscompare d tofield swher ecarabao sd ono tenter .Thi si s probablydu et oth epresenc eo fwee d seedsi nlivestoc kmanure .I t isno tpossibl et orefrai nothe rfarmer sfro mgrazin gthei r animalsi nfield sonc ethe yar eharvested .Th eonl ypossibl ewa y toprotec tone' sfiel di st ohav eeithe ranothe rcro pfollowin g riceo rt oploug hth efiel dshortl yafte rharvesting .

Thecontinuou scultivatio no fdr yseede dBE- 3crop si sknow nt o resulti na nincreas ei nwee dpopulation .Becaus eo fit stal l stature,wee dcontro li sno trequire da tth elate rstage so fcro p growthallowin gwee dplant st omatur ean dproduc eseeds .Th e continuouscultivatio no fdr yseede dBE- 3als oresult si npoo r levelled fieldswit hth eassociate d problemo fpoore rwate r controlan da nincreas ei nwee dinfestatio ni ncertai npart so f thefield .Hence ,ever ytw oo rthre eyear sdr yseede dBE- 3crop s havet ob ealternate dwit htransplante d BE-3t oallo wfiel dlevellin gan dreduc ewee dinfestatio na swel l ast ofacilitat eeasie rhandweeding .Thi si susuall yn oproble mi n dryseede dHY Vcrop sa ssuc hcrop sar efollowe d bya secon dwe t seededric ecrop . 177 Thereplacemen to fth etal lBE- 3variet ywit hth esemi-dwar fHY V varietiesha sinitiall y resulted inincrease dwee dproblem si n fieldsplante d tothes elatte rvarieties .Th etraditiona lvariet y hasdroop yleaves ;th esemi-dwarf sar eshorte ri nstatur ean dhav e erectleaves .Therefore ,mor eligh tpenetrate sth ecro pcanopy , andmor eweed semerg ean dsurvive .However ,doubl ecroppin gwit h thesesemi-dwar fvarietie si sobserve d byfarmer st ohav ea wee d reducingeffec tdu et oth emid-seaso nincorporatio no fwee dplant s during soilpuddlin gfo rth esecon dcro pan dth eide atha tcertai n latematurin gwee d speciescanno tproduc eseed sdurin gth eshor t growthduratio no fth emoder nvarieties .O nth eothe rhand ,th e increasei ncultivatio no fHYV san ddoubl eric ecroppin gha s aggravatedwee dproblem sdu et oth estron gincreas ei nth e occurrenceo fEchinochlo acrus-gall i(paray-paray) ,a grass ywee d specieswhic hi sdifficul tt ocontrol .

Earlycontro lo fweed si simportan tfo robtainin ghig hyields . Timelywee dcontro li smor eimportan tan dals omor edifficul ti n directseede dcrop stha ni ntransplante d rice.Wee dincidenc ei s mostseriou si ndr yseede dcrop ssinc eth einitia ldr yfiel d conditionsfavou rth egerminatio nan dgrowt ho fgrasses .Becaus e fieldsar eno tsubmerge ddurin gth eseedlin gstag eo fth ecrop , grassyweedseed sfin dth erigh tcondition st ogerminat ean dgro w togetherwit hth eric eseedlings .Becaus eo fthei rvigorou sgrowt h characteristics,thes eweed sma yeasil youtgro wan dsuffocat eth e riceseedling sa ta nearl ystage .I ncas eo fa heav ywee d infestation,suc ha conditio ni sdifficul tt ocontrol .A swil lb e indicated furtheron ,weedin ga newl yemerge dric ecro pi softe n impossiblewithou tcausin gsubstantia ldamag et oth ecrop .Thus ,a goodleve lo fwee dcontro li sa pre-requisit efo rsuccessfu ldr y seededric ecrops .

Farmerswill ,therefore ,hesitat et ogro wdr yseede dcrop sunles s theyexpec ta relativel yweedfre eseedbe d orhav esufficien t resourcesa tthei rdisposa lt ocontro la nunexpecte d highwee d infestation.Fo rinstance ,th ecro pseaso no f1979-8 0wa s particularly drydurin gth elate rgrowt hstag eo fth eBE- 3cro p whichstimulate dwee dgrowth .A sa reaction ,farmer splante da muchsmalle rare at odr yseede dBE- 3crop si nth efollowin gyea r replacing themwit htransplante dBE- 3crops .Furthermore ,fo rdr y seeded ricecrops ,i ti scommo nt owai twit hseedin gunti l weedseedshav egerminate dafte rth efirs tploughing .Thus ,b y observingwee demergenc eafte rth efirs tploughing ,farmer sma y changethei rfar mplan so nth ebasi so fth eobserve dearl ywee d incidence.We tseede dric ecrop sar eles ssusceptibl et owee d infestationbecaus eweed sar eincorporate d intoth epuddle dsoi l priort ocro pestablishment .However ,th eleve lo fearl ywee d controlattaine di nwe tseede dric ecrop si sfa rles scompare dt o transplanted crops,becaus efield shav et ob edraine dbefor e seedingwhic hfavour sth egerminatio nan ddevelopmen to fgrasses .

Otherpractice st oreduc ewee dinfestatio ninclud eth eus eo f cleanric eseeds .See d selectionan dharvestin gar eusuall y 178 carried outbefor eth emai nharvest ,ofte nb ypanicl ewit hth eus e ofth efinge rblad eharvestin gknif e(kayok) .Cuttin go fweed so n thelevee so fric efield si sconsidere d importantt oreduc ewee d infestation.Th erelativel yhig hseedin grate sfarmer sus ei n directseede dric ecrop s(aroun d 130kg/ha )ma yi npar tb e considereda wee dcontro lpractice .Fo rwe tseede drice ,Mood y (1977)reporte d lesswee dcompetitio na sseedin grate sincrease d inth erang eo f8 0t o20 0kg/ha .

Apartfro mth eabov ecultura lpractice st olimi twee dincidence; , directcontro lpractice sconsis to fa numbe ro fphysica lan d chemicalcontro lmethods .Physica lmethod sinclud eprope rlan d• preparation,han dweeding ,burnin gcro presidue san dwee dplant s duringth edr yseason ,an dfloodin gan dsmotherin go fwee dplants . Handweedin go fdirec tseede dcrop susuall ystart stw oo rthre e weeksafte rseeding .Earlie rweedin gma ycaus eseriou sdamag et o theyoun gric eseedlings .Becaus eth eseed sar erandoml y broadcast,i ti sdifficul tt oente rth efiel dwithou tphysicall y damagingth eric eseedlings .Moreover ,a tthei rseedlin gstage , certaingrass ywee d speciess omuc hresembl eric eseedling stha t evenexperience d farmershav edifficult y inrecognizin g them.Han d weedingma yno talway sb epossibl edu et ounfavourabl efiel d conditions.Mois tfiel dcondition spreven than dweedin gbecaus e thesoi li sto ostick yan denterin gth efiel dwoul dresul ti n substantialdamag et oth eric eplants .Als oth epullin go fweed ; plantswoul db eimpossibl ewithou tsimultaneousl ypullin go fric e seedlings.Du et oth esoi lstructure ,weedin gi ndr ycondition si s possiblei ndr yseede dcrops ,bu tno ti nwe tseede dcrop swher e soilsbecom ecompac tafte rdrying .I nseverel ywee dinfeste ddr y seededric ecrops ,ric eseedling sma yhav et ob epulle dand ,afte r ploughing,replante dt oanothe rpar to fth efield .

Mechanicalwee dcontro lwit hrotar yweeder s- popula ri n transplanted irrigated rice- canno tb eemploye d indirec tseede d ricecrop sdu et oth erando mdistributio no fric eseedlings . Smotheringo fwee dplant swit ha wooden ,tooth-spike dharro w (suyod)wa sa commo nwee dcontro lmetho di nth etraditiona lric e cropsan dunti ltoda yi sstil luse db ysom efarmer si nth eBE-3 ' crops.I n1980 ,farmer sstarte d toadap tthi smetho d forus ei n HYVcrops .Instea do femployin ga harro wpulle d bya carabao ,the y usea broadl yspiked ,woode nhandharro wt ocontro lweed swit hlon g rizhomes.Althoug hsuc hmetho dma yno tb econsidere d ideal,the y effectivelyminimiz eth edetrimenta leffec tweed shav eo ncro p. growth(D eDatta ,1981) .

Theus eo fherbicide si sno twidesprea d andi slimite dt o applicationso f2,4- D (2,4-dichlorophenoxyaceti cacid) .Thi s systematic,post-emergenc eherbicid ei suse di nliqui dfor man d applieda sa folia rspra ywit hth eus eo fknapsac ksprayers . Farmersfin d2,4- Deffectiv eagains tsedge san dbroadlea fweeds . Farmersd ono tappl ypre-emergenc eherbicide ssuc ha sbutachlo r whichar erecommende da sa contro lmetho dagains tearl ywee d infestationsi ndr yseede dric ecrops .Applicatio no fchemica l 179 herbicides (butachlor)immediatel yafte rseedin gwhe nth esoi li s stillslightl ywet ,o rimmediatel yafte ra germinatin grain , followed byon ehandweedin gusuall yadequatel ycontrol sweeds . Althoughfarmer sar eawar eo fth eexistenc eo fpre-emergenc e herbicides,the yhav eno tye tattempte d tous ethe mbecaus eo fth e largecas houtla yinvolve dan dth eobviou sris ktha tsuc h investmentma yprov et ob euseles si ncas eth ecro pfail sa ta n earlystage .Tha tis ,th einvestmen tha st ob emad ebefor eth e farmerca nb ereasonabl y suretha tth ecro pwil ldevelo pwell .A t therecommende d level,th eapplicatio no fpre-emergenc eherbicide s entailsa cas hcos to fapproximatel y $34pe rhectare .Thi s expenditurei sincurre d ina perio dwhe nth ehousehold' sreserve s arelo wan dexpenditur erequirement sar ehigh .Especiall y forth e non-surplushousehold sther ei sa nee dt oconserv ecas hfo rinput s forwhic hlabou rcanno tb esubstitute d (e.g.fertilizer) .Thus , althoughth eus eo fpre-emergenc eherbicide sreduce sth eyiel d risko fdr yseede d ricei tma ysubstantiall y increaseth ene t returnris ko fth ecro p(a tleas ti tdoe ss oi nth eeye so fth e farmers),especiall ywhe nth eopportunit ycos to fcas hi nth e periodo finvestmen ti stake nint oaccount .Thus ,instea do f riskingth einvestmen to fa nexpensiv epre-emergenc eherbicid e application,farmer str yt oreduc eth eris ko fa heav yearl ywee d infestationa smuc ha spossibl eb ylocatin gdr y seededric ecrop s onfield swit ha goo dleve lo fwee dcontrol .The yals otak eint o accountth eleve lo fwee dinfestatio ni nadvanc eo fcro p establishmentan dcontro lweed sa smuc ha spossibl ethroug hprope r landpreparation .

Duet oit sdependenc eo nth erainfal lpattern ,wee dincidenc eha s anuncertai ninfluenc eo nric ecro pproduction .However ,i tca nb e argued thati ti sno ta yiel dris kfacto rpe rs esince ,i n principle,i ti salmos talway spossibl et ocontro lweeds .O nth e otherhand ,t oth eexten ttha tfarmer sd ono thav esufficien t resourcesa tthei rdisposa lt oadequatel ycontro la nunexpecte d severewee dinfestation ,th epotentia ldamag edu et oweed sma y stillb econsidere da ris kelement .Suc hris kenter sproductio n decisionsprimaril yfro mth ecos tsid eo fproductio nrathe rtha n fromth eoutpu tside .I ncas eo fa sever ewee dinfestation ,th e amounto flabou rrequire dt oproperl ywee da fiel d issubstantia l andofte nexceed sth elabou ravailabilit y ofth eindividua l household.Sinc ewee dcontro lcost sar estochastic ,i twil ldepen d onth eresourc epositio n('fire-fightin gcapability' )o fth e householdwhethe ri tca nmobiliz eth eextr ainvestmen trequire dt o controla nunexpecte dsever ewee dinfestation .Yiel dris kdu et o weedsi sthu sno tresourc eneutra lan dwil ldiffe racros s householdcategories .

7.1.4 Pestan ddiseas econtro l Inth eusuall ywar man dhumi dhabita to fth eric eplan tbot hpes t anddisease sar econsidere dmajo rris kfactor stha t- i fno t controlled- ma ysubstantiall y reduceth eoutpu to fcro p productionactivities .Th egenera lproble mo frapi dpes tbuild-u p 180 andspreadin go fdisease srequire stimel yan dadequat econtro lo n thepar to fth efarmer .Th edegre et owhic hfarmer sca nb e j expectedt ocontro lpes tan ddiseas einfestation swil ldepen doi l theirunderstandin go fpest san ddiseases ,thei rfamiliarit ywit h controltechniques ,an dth eavailabilit yo fresource sfo r implementingthem .O nth eothe rhand ,th edegre et owhic hfarmer s wantt ocontro lpes tan ddiseas edamag ewil ldepen do nth e perceivedbenefit sa swel la sth epossibl enegativ eeffect s associatedwit hth eus eo fcontro lmethod s(e.g .pesticides) .Fro m discussionswit hfarmer si twa sclea rtha tthe ywer emos t concernedwit hdamag ecause db yinsec tpests .Th edamag ecause db y otherpest ssuc ha sbird san drodent swa sconsidere dminor ,a t leasti nrecen tyears .Th elimite dimportanc efarmer sattac ht o damagescause db ydisease si slikel ydu et oth efac ttha tthe yd o notrecogniz elea fdamag ea scause db ydiseases .

Recognitiono finsec tpest si sa requiremen tt othei reffectiv e control.Employin ga nopen-ende dquestionnair ean dphotograph so f pestsan dpes tdamage ,farmer swer easke dt oindicat ewha tpest s theyconsidere d important;ho wth epes twa sdiagnose di nth e field;wha tit seffec twa so ngenera lcro pgrowth ;th epercentag e ofdamag ei nterm so fyiel dlos scause db ya light ,medium ,an d severeinfestation ;whe nan dunde rwha tcondition sth epes t normallydevelops ;an dmethod san dtimin go fpes tcontrol .I n totaleigh tinsec tpes tspecie saffectin gric ecro pproductio n * wereidentifie db yth emajorit yo ffarmer s(Appendi x V). Fourpes t speciesar econsidere do fmino rimportance :mol ecricket s (Gryllotalpaafricana) ,lea ffolder s(Cnaphalocroci smedinalis) , ricecasewor m(Nymphul adepunctalis) ,an darmy-wor m(Mythimn a separata).The yeithe roccu rearl yi nth egrowt hcycl eo fth eric e plants othei reffec to ncro pgrowt hca nstil lb eremedie do r i peststha tar erelativel yeas yt ocontro lwit hcommercia l pesticides.Fou rinsec tpest sar econsidere do fmajo rimportance : stemborers(e.g .Scirpophag aincertulas ,Tryporyz a innotata), ! brownplan thoppe r(Nilaparvat alugens) ,gree nlea fhoppe r (Nephotettix spp.),an dric ebu g(Leptocoris a oratorius).The yma y eitherinflic tdamag ethroughou tth egrowt hcycl eo fth eric ecto p orattac kdurin gth esensitiv egrai nfillin gstag eo fth eric e plant.The yar egenerall ymor edifficul tt ocontro ltha nth eabov e describedearl yseaso ndefoliators .

Incontras twit hth econclusio nreache db yth estud yo fLitsinge r eta l(1978 )fo ra nearb yresearc hsite ,farmer sappea rt ob e * quitecapabl eo fidentifyin gvariou sinsec tpest s(Appendi xV).'I n fact,the yrecogniz eth epest swhic hwer eindicate d byth eIRRI * croppingsyste mtea ma sbein gth emajo rpest si nth eare atha t' needt ob econtrolled .Although ,th eloca lnomenclatur ema ylac k preciseword st odistinguis hbetwee nrelate d insectspecie ssuc h asleafhopper san dplanthoppers ,o nth ebasi so fcolou r differencesfarmer sidentifie dthre edifferen tspecie so f planthoppersan ddistinguishe d betweenplan tan dleafhoppers . Furthermore,farmer sappea rt ohav ea goo dapprehensio no fth e developmentcycl eo finsect san do fth ecircumstance sunde rwhic h 181 theyten dt odevelop .

Insectcontro l Methodsemploye db yfarmer st ocontro linsec tpest sconsis to f culturalpractice san dapplicatio no fcommercia lpesticides . Traditionalmethod so fpes tcontro lhav ealmos tdisappeare dsinc e theintroductio no fpesticide si nth emi d1960s .

Culturalcontro lmethod sinclud eearl ytimin go fcro p establishmenti norde rt ob eahea do fa seriou spes tbuild-up ; cleanbund saroun dric efield s(weed sar econsidere dhos tplant s forcertai n pests);plantin go flong-maturin g ricevarietie si n betweenfield splante dwit hshort-maturin g varieties(an dt o lesserexten tvic eversa )i sconsidere d dangerousi nterm so fa n increasedchanc eo fpes tinfestatio nderive dfro madjacen tfields ; transplantedBE- 3crop sar econsidere d tob emor esusceptibl et o brownplan thoppe rinfestatio nbecaus ethes einsect slik et osta y inth edecaye d leaveso fth enewl ytransplante d riceseedlings ; densecrop sar econsidere dt ob emor esusceptibl et opes t incidence;certai nfarmer sindicate d thatheav yfertilize d ricei s morepron et opes tdamag ebecaus e 'fertilizermake sth este m soft'.Ther ei sn oagreemen tamon gfarmer swhethe rth ene w varietiesar emor eresistan tt opest stha nth eexistin gvarieties . Certainfarmer smaintai ntha tIR3 6i sa ssusceptibl eo reve nmor e susceptiblet oinsec tpest sa sBE-3 ,despit eth eallege dpes t resistanceo fth eforme rvariety .

Forchemica lcontrol ,farmer sgenerall y usesprayabl eformulation s ofrelativel y inexpensivebroad-spectru m pesticidessuc ha smethyl - parathionan dendrin .Th emajorit yo ffarmer sdoe sno tspra y accordingt oa pre-determine dschedule ,bu tdecid eupo nth e occurrenceo fth epes twhethe rt ospra yo rnot .Althoug h historically,extensio nwit hrespec tt opes tcontro lha sstresse d theimportanc eo ffixe d sprayingcalendars ,mos tfarmer sd ono t considersuc ha strateg y 'necessary'.The yargue :'Ever yyea ri s different.Certai nyear syo uhav et ospra ya lo tan dothe ryear s youd ono t(pan uigon) .Bu ti ti sver yimportan tt oalway shav e somecas ho nhand ,s oyo uca nbu ychemical si fnecessary .I tca n bever ydangerou st odela yspraying!' .

Thedecisio nt ospra ygenerall ydepend so nth etim eo foccurrence , thetype ,an dth edegre eo fpes tinfestation .A sindicate dabove , earlyseaso ndefoliator sar eno tconsidere dt ob erea lthreat st o finalyield s('th e cropca nrecover') ,an di fa ninfestatio n becomesserious ,farmer sfin di teas yt ocontrol .Eve na nearl y infestationo fstemborer si sconsidere d ofmino rimportanc esinc e 'theric eplan tca nproduc ene wtillers' .However ,th eclose rth e cropgrowt hi stoward sth eflowerin gstage ,th emor eseriou s farmersbecom ewit hrespec tt oinsec tpes tcontrol .A tthi sstage , stemboreran dbrow nplanthoppe rinfestatio nar eviewe db yfarmer s asseriou syiel dreducin gfactors .Sprayin gagains tthes epest s hasa hig hpriority , 'theni ti sver yimportan tt ospray .I fI d o nothav emone yI borro wi tfo rtha tpurpose .Yo ubette rus esom e 182 moneymean tfo rfertilize rtha nno tt ospray 1.Contro lo fric e bugsdurin gth emilkin gstag eo fric ei sconsidere d evenmor e important.

Iti sdifficul tt oevaluat ewhethe rfarmer sachiev erecommende d levels.Litsinge r et_al ^(1978 )foun dthat ,althoug hfarmer s generally followed therecommende damount so fpesticide spe r sprayerloa d (bottlecup so rtabl espoon spe rlitre )a sstate do n thecontainers ,the yuse d farto ofe wspraye rload so na hectar e basist oachiev erecommende d levels.However ,calculation so na i perhectar ebasi sma yofte nb eerroneou sbecaus efarmer scommonl y applyspo ttreatment so rspra yonl ycertai n 'boxes'o fa parcel .

Althoughfarmer swil lgenerall yno tagre ewit hth eide atha tthe y usesub-letha ldose so fpesticides ,attitude stoward sth enee dan d levelo fsprayin ggive na certai npes tincidenc ediffe r substantiallyamon gfarmers .Ther ei sa mino rgrou po ffarmer s thatspray sirrespectiv eo fth edegre eo fincidence .On esuc h farmerwhe naske dwh yh ealway suse d suchhig hleve lo f pesticides: 'Ireall yha da goo dcontro lagains tpests ,bu tthi s yearther ear eonl yfe wpests .I reall ycanno tsto pmysel ffro m spraying.I fI se einsects ,I hav et ospray !I a muse dt oi t becauseo fm yfather .Bu tI observe dtha ton efarme rnea rm y parcelonl yspraye donc edurin gth eflowerin g stage,an di twa s enough.H eha da goo dyield' .Thi sgrou po f 'heavyusers ' functionsa sa kin do fearl ywarnin gantenn afo rth emajorit yo f farmerswh od ono tspra yunles sther ei sa seriou sleve lo fpes t incidence: 'Thisyea rther ei sn orea lpes tproblem ,bu tstil l certainguy sar esprayin ga lot ,becaus ethe yar euse dt oit .Lik e myneighbour ,h espraye d likecraz yan dstil lha dth esam eyiel dI had.I twa sno treall ynecessar yt ospra ya lot' .Finally ,there : isa thir dgrou po ffarmer swhic honl y sprayswhe nothe rfarmer s arespraying : 'Farmerso nth eothe rfield swer esprayin gtoo ,s oI hadt ospray' .

Toevaluat efarmers 'ow nfeeling swit hrespec tt opes tdamag e control,the ywer easke dt oasses sth eexpecte d yieldlos s(i n termso fth enumbe ro fbag so fric eou to ftwenty )unde rheavy , medium,an dmil dpes tincidenc ewit han dwithou tpes tcontro lfo r thepes tcomple xtake na sa whole ,a swel la sth enumbe ro fyear s outo fte nsuc hinfestatio nwoul doccur .Thes equestion swer e askedfo rthre edifferen ttype so fric ecrops .I ncontras twit hI the 'Litsingersurvey' ,farmer sa tthi slocatio nindicate d thati n termso fexpecte dyiel dlos sth efirs tHY Vric ecro pi smor e susceptiblet opes tinfestatio ncompare d toth esecon dHY Vcro p (Table7.1.1) .Th esusceptibilit yo fth elong-maturin gBE- 3 varietyi sroughl yequa lt oth esecon dHY Vcrop .Th eprobabilit y ofoccurrenc eo fa ninfestatio ni nth efirs tHY Vcro pi ssomewha t lowercompare d tobot hothe rtype so fcrops ,however ,farmer s indicatedtha tth eeffec to fsuc hinfestatio ni ssevere ri nterm s ofth eexpecte dyiel dloss .Further ,fro mTabl e7.1. 1 itals o appearstha tfarmer sexpec ta reasonabl edegre eo fpes tdamag e controlwit hthei rpresen tus eo finsecticides .Fo ral lcro p 183

Table7.1. 1 Farmers'assessmen to fpe rcen tyiel d reductiondu et opes t incidence forthre elev/el so fpes tinfestation ,wit han dwithou t insectpes tcontrol ;al l sample farmers probabilityo < occurrenceo fthre e pest infestation levels(b ) andattache d %yiel d reduction(a ) Cleanyiel d Heavy Cledium Light Typeo fvariet y reduction (a) (b) (a) (b) (a) (b) Without insectpes t control HYV (1stcrop ) 26.6 45.0 23 29.0 33 16.9 44 (.27) 1) (.24) (.35) (.33) (.29) (.41) (.29) HYU (2ndcrop ) 19.2 30.9 26 19.4 38 19.7 36 (.21) (.26) (.33) (.31) (.30) (.32) (.32) BE-3 20.1 33.4 25 22.1 35 12.3 40 (.32) (-32) (.37) (.33) (.32) (.36) (.42) Withinsec tpes tcontro l HYU (1stcrop ) 15.3 27.5 39 2) 16.3 44 9.2 46 (•29) (.31) (.32) (.38) HYU (2ndcrop ) 10.6 17.9 42 10.7 45 5.4 50 (.21) (.28) (.25) (.26) BE-3 11.4 19.0 43 12.1 45 6.9 44 (.35) (.37) (.32) (.42) 1) Figuresi nparenthese sar ecoefficient so fvariatio n (25respondents) . 2) Percentagereductio ni n %yiel d reductiondu et oinsec tpes tcontrol . types,expecte dyiel d lossdu et opes tdamag ei sreduce d byove r 40%whe ninsecticide sar eapplied .However ,i ti sals oclea rtha t mostfarmer sd ono tperceiv eful lcontro lo fpes tdamag epossible . Withpresen tpes tcontro lpractices ,farmer sstil lexpec ta yiel d losso fove rone-fourt ho fth egros syiel do fth efirs tHY Vcro p ifthi scro pi sseverel ypes tinfested .Th eexpecte dyiel dlos s overal lpes tdamag estate sfo rth esam ecro ptyp ei sabou t15% , whereasfo rbot hth esecon dHY Vcro pan dth eBE- 3cro pth e expectedyiel dlos si sabou t11% .Mos tfarmer smentio ntha tth e costattache d tohig hpes tcontro llevel si si nexces so fth e benefits.Accordin gt othem ,th epotentia lbenefit so fhig hlevel s ofpes tcontro lar eto oeasil ynullifie d byothe r- non - controllable- environmenta lfactor ssuc ha sdrough ta tth e reproductivegrowt hstage .

Fromth eabov ei ti sconclude dthat ,althoug hfarmer sar equit e confidentabou tth eleve lo fpes tcontro lthe yca nachieve ,yiel d damagedu et opest san ddisease sremain sa seriou sris kfacto ri n riceproduction .I tshoul db erealize d thati ti sver ylikel ytha t damagedu et odisease si sconfounde dwit hpes tdamage .Hence ,i t ispossibl etha tpar to fth eabov eindicate d 'non-controllable pestdamage 'i si nfac tdu et odamag ecause d bydiseases .Farmer s may (quiterightly )no tfollo wal lrecommende d pestcontro l practices.Th emajorit yo ffarmer sdoe sno tus epes tspecifi c insecticides,wherea sonl yfe wfarmer sus eprophylacti c 184 applicationsagains tearl yinfestation so fstemborer san dcas e worms.Give nth emino rimportanc efarmer sattac ht oth eyiel d damagecause d bythes eearl y seasonpests ,prophylacti c applicationsar ei nthei rvie wno teconomicall yattractive . Furthermore,economi cthreshold sutilize d indeterminin g recommended controlpractice sfo rlea ffolders ,ric ebugs ,cas e worms,an dstemborer sma yno tdiffe rver ymuc hfro mth erules-oft - thumbpresentl yemploye d byfarmers .

7.1.5 Riskcontro lan dcro pproductio nplannin g Apartfro mth eabov eris kcontro lmeasure si ncro pmanagement , riskcontro li sals oa ninheren telemen to fth efarmers 'cro p productionplannin gprocess .Thi selemen to fris kcontro li sa built-incharacteristi c ofth etw oprincipa lway sb ywhic hfarmer s simplifyth ecro pproductio nplannin gproblem .First ,the yusuall y dono tdrasticall yalte rfar mplan sfro mon eyea rt oth enext . Second,the ybrea ku pth eplannin go fcro pactivitie si na numbe r ofconsecutiv e stagestha tar esolve dsequentially .

Clearly,croppin gstrategie san dfar mplan sfollowe db yfarmer s areth eresul to fa lon gproces so fexperimentatio nan dadaptatio n carriedou tb yfarme rhimsel fo rbase do nth eexperienc eo f predecessors.Thes epattern shav eprove nt ob eviabl egive nth e localclimati can dsocio-economi ccircumstance sa swel la sth e resourceendowment so findividua lhouseholds .Thus ,th eattitud e ofmos tfarmer si st ob ecautiou si nchangin gexistin gcroppin g strategies.A swil lb ediscusse d inth enex tsections ,change si n croppingstrategie sar eth eresul to fa gradua linsertio no fne w cropactivities .I nthi sproces sfarmer sasses sho wsuc hne w activitiesfi ti nwit hth eexistin gcroppin gsystem .Th epressur e tochang efar mplan sma yresul tfro mchange si nth edecisio n makingenvironmen t (e.g.prices ,ne wtechnology ,change si nth e behaviouro fothe rfarmers )o rfro minterna lpressure swithi nth e household,e.g .du et ochange si nth eresourc ebas eo rexpenditur e requirements.

Another featureo ffarmers 'plan si stha tthe yar eexpresse di n termso fa conditiona l 'if.Whe nasked ,farmer sreadil ypresen t theirplan sfo rth ecomin gseason ,however ,wit hth eusua lremar k 'ifth eweathe rpermits' .Whe nsubsequentl yaske dwha tkin do f alternativesthe yconside rwhe nth eweathe rdoe sno tallo wth e implementationo fth eplan ,the yclearl yhav ei nmin dwha tkin do f alternativecrop so rcroppin gpattern st ofollo w(fall-bac k strategies).A swil lb ediscusse dbelow ,fo rthi svillag eth e initialonse tpatter no frainfal lcriticall ydetermine sth e sequenceo fcro pestablishmen tan dsubsequentl ymanagemen t throughoutth eseason .Du et oa lat eonse to fth egrowin gseaso n plannedcro pproductio nactivitie sma yno tb efeasible ,thu s requiringth efarme rt ocompletel ychang ehi sfar mplan .

Farmers'plannin gi sneithe rbase do nsom esor to faverag e rainfallpatter nno ro nrainfal lcondition stha toccu rmos t 185 frequently.Instead ,the ytak eint oaccoun tvariou spossibilitie s regardingth eonse tan dterminatio no fth erainfal lseason .Thus , farmerspla ni nterm so fcroppin gstrategie sbase do npossibl e rainfallscenario srathe rtha ni nterm so ffixe dcroppin gpattern s basedo na naverag erainfal lpattern .Suc hstrategie sinclud e optionsho wan dwher et ostar tan dwha tt od oi fa certai n situationdevelop sdurin gth einitia lphas eo fth egrowin gseason . Informulatin g strategies,farmer sconcentrat eo nthos edecision s thatar e 'nearby',i.e. ,wha tcrop st oplan tfirst ,wher et ostar t ploughing,ho wmuc hfertilize ri srequire d forth efirs tfe w months(i.e .unti lth enex trice/dagma yharvest) ,bu tals otakin g intoaccoun tpossibl ecro poption san dmanagemen tproblem sdurin g themi dan dth een do fth emonsoo nseason :th epossibilit yo f secondric ecro pestablishment ,plantin go fmungbean so rcowpe a afterBE- 3i nDecembe ro rearl ypost-monsoo nuplan dcrop si n lowlandarea sfollowin gric e(e.g .squash) .I nth eactua l managementan dadaptatio no ffar mplans ,farmer softe nmak eus eo f rules-of-thumbbase do npas texperienc esuc ha scut-of fdate sfo r cropplantings ,fiel dpriorit y forcro pestablishmen ti nrelatio n towate ravailability ,fertilize rlevels ,etc .I nth ecas eo fne w productionactivities ,farmer sgraduall y tendt odevelo psuc h rules-of-thumb throughexperimentatio n (Section7.3) .

7.2 Doubleric ecropping :Profitabilit yan driskines s Thepotentia lfo rcro pintensificatio ni nrainfe dwetlan darea s throughdoubl eric ecroppin gi sdetermine d byrainfal lan dth e positiono ffield si nth etoposequence .Th enorma lrainfal l distributioni nth estud yare ai smargina lfo rdouble-croppin go f rainfed rice.However ,du et osurfac ean d sub-surfacemoistur e enrichment standingwate ri nrelativel y low-lyingfield softe n extendssubstantiall y intoth edr yseason .T oreduc eth eris ko f secondcro pfailure ,a nearl yestablishmen to fth efirs tric ecro p isrequired .

Asindicate db yth efarmers 'assessmen to fwate ravailabilit yfo r thevariou slan dunit s(1 )(Figur e7.2.1) ,th epotentia lfo r doubleric ecroppin gusin gdirec tseede d ricei ndr ysoi l conditionsi sparticularl y relevantfo rfield stha tli ei nbetwee n thehighes tan dlowes tlandscap epositions .Fo rsideslope swit h good internalan dsurfac edrainage ,a singl eric ecro pca nb e growni nmos tyears ,eithe rprecede db ya drylan dcro p(usuall y maize)o rfollowe d bya drylan dcro p(e.g .squash ,tomatoes) . However,fo rsideslop efield swithou ta supplementar y sourceo f water,growin gcondition sfo rric ear emargina lan di ti sno t uncommont ogro wdrylan dcrop sinstea do fric e (dagmay).Fo r partiallyirrigate dareas ,moistur econdition sar esuc htha t doublecroppin gwit hwe tseede dric ecrop si spossibl ei nalmos t allyears .

Theassessmen to fth efeasibilit yan dperformanc eo fdoubl eric e croppingpattern si scomplicate d duet oth eyear-to-yea rvariatio n inrainfal lpatter nan dassociate dris kfactors .Sinc eth e 186

Cumulatiw probability 1.51 High sklf skve 1.01- IIU, ,\ .5 - # V\

II III HlX/ " I IRainM I NX / / II Waterway \ \ / / I III Irrigated | \ V^ X ^. 1 1 I I I i \ \-

1.5 P"" III II I I II 111

/vvr i i i i i i\.\. >»^

Fig.7.2. 1 Farmers'assessmen to fwate ravailabilit yi n lowlandfields ,expresse di nterm so fth ecumulativ e probabilityo ffield sbein gfloode d(Wee k1=1- 7Jan. )

'dry seeded - wet seeded rice' (DSR-WSR)patter n requires a favourable rainfall pattern, i.e. early onset and late decline qf the growing season,i tma y frequently occur that aDSR-WS R pattern cannot be executed. In such a case,farmer s change to different crops and different cropping patterns.I n determining the profitability and riskiness of double rice cropping (and as a matter of fact for most other cropping strategies)suc h adaptation of initial plans based on actual rainfall conditions should be taken into account.I n fact,omissio n of the possibility of cropping plan adaptation may result in a grave overestimation of the riskiness and underestimation of the profitability of double rice cropping.

In order to assess the performance of cropping patterns taking into account rainfall variability, the following stepshav e to be taken.First ,i tha s to be established what kind of alternative crop options farmers may followwhe n a planned pattern cannot be executed, either because rainfall conditions do not allow the establishment of the first crop of such pattern or because the first crop failsa t an early growth stage.Second , the likelihood that the planned pattern willb e successfully executed has to b£ determined aswel l as the likelihood of successful alternative ' patterns,i n case the intended pattern can not be realized. Third, an assessment must bemad e of the level and variability of cost and returns of individual cropswithi n these patterns.Fourth , based on the likelihood of occurrence of the various cropping patterns and their economic returns,th e profitability of the cropping strategy must be determined relative to the profitability of alternative strategies for the landscape.Fifth , the 'fit'o f the cropping pattern in the cropping system has to beanalyze d on the basis of itscompetin g requirements for land, labour and cash 187 vis a visth ereturn stha tca nb eexpecte d relativet oth ereturn s ofalternativ epatterns .

7.2.1 Croppingpatter nstrategie s Thevariou stype so frice-base d croppingstrategie sconsidere db y farmersfo rth ecro pseaso no f1979-8 0ar eshow ni nFigur e7.2.2 . Firstcro poption sfo rlowlan d fieldsinclud edr yseede dHY Vo rBE - 3ric ecrops ;th eestablishmen to fcor ncrops ;continu ewit ha standingdr yseaso ncrop ;o rwai tfo rrainfal ltha tallow sth e establishmento fwe tseede do rtransplante d rice.I fearl y rainfallcondition sar einsufficien t fordr yseede dric eo rcorn , farmersma yswitc ht oa nearl yestablishmen to fwe tseede dHY V ricecrop si nJun ei ncas eo fearl ypondin go fwate ro rma yhav e

continue uaitfo r dry season rice crop crop

jarly failure

early UJSR HYV

CZIU i TPR i ! BE-3 [ U J 1..

SQUASH 1

relay NUNG

dry season dry season crop crop

Figure 7.2.2 Rice-based cropping patterns 188 towai twit hcro pestablishmen tunti lJuly .Farmer splannin gt o havea dr yseede dBE- 3ric ecro pma yswitc ht otransplante d BE-3, providedthe yhav eenoug hmone yt ofinanc eth etransplantin g operation.I ncas esuc hfinancia lmean sar eno tavailable ,farmer s mayb eforce d toestablis ha we tseede dBE- 3o rwe tseede dHY V ricecrop .

Bothdr yseede dan dearl ywe tseede dHY Vcrop sca nusuall yb e followedb ya secon dwe tseede do rtransplante dHY Vcro pa swel l asb ya transplante d BE-3crop .A si tturne dou ti nth ecours eo f the1979-8 0season ,eve nth erelativel y latewe tseede dHY Vcrop s (established atth ebeginnin go fJuly )wer estil lfollowe db ya lateestablishmen to fa secon dric ecrop .However ,fo r 1979,suc h latesecon dcro pplantin gwa scertainl yno tconsidere d anoptio n inth ecroppin gplan so ffarmers .Th eusua lcro poption sfollowin g mediumo rlat ewe tseede dHY Var ecrop ssuc ha ssquas ho rmung . ForBE- 3crops ,option safte rth eharvestin g ofthes ecrop si n December includemun go rcowpe a(o ra mixtur eo fthes etw ocrops ) relayed intoth eric estubble .

Inorde rt oreduc eth eeffec to frainfall-relate d crop establishment risks,farmer semplo yvariou scut-of fdate sbefor e and/orafte rwhic hth eestablishmen to fth ecro pbecome sto o risky.Fro ma nintervie whel di nSeptembe r 1979,i tappeare dtha t thesecut-of fdate sar erathe rwel ldefined .Farmer sshowe da a highdegre eo fconcensu sconcernin gthes edates ,althoug hsom e minorvariation sacros slan dunit soccurred .Th ecut-of fdat efo r apalay-an gric eseedin go rcor ncro pestablismen ti sconsidere d tob eth een do fApri lo rth efirs twee ko fMay .Plantin gafte r thatdat ei sthough tt ob eto orisk ybecaus eth echanc eo fheav y rainfalli nMay ,damagin gth eungerminate dseeds ,i sconsidere d toohigh .Th ecut-of fdate ,o rrathe rth eplantin gwindo wfo r samaraseeding si sfro mth efirs twee ko fMa yunti lth een do fth e month,bu tpreferabl ybefor eth ethir dwee ko fMay .Samar aric e seedingsbefor etha tdat ear econsidere d toorisk ydu et oth e possibilityo fa dr yperio dafte rth epre-germinate dseed shav e emerged.Seeding safte rth een do fMa yar eto orisk ybecaus eo f thepossibilit yo fheav yrainfal lcausin gpondin gan dsubmergenc e ofth eemerge d riceseedlings .Thu sfarmer sperceiv ea ver ynarro w plantingwindo wfo rsamar aseedings .Als ofo rsecon dric ecro p seedings,farmer slargel yagre eabou tth efina ldat ebefor esuc h seedingsshoul dtak eplace .Fo rth esomewha tdrie rlan dunit s 'plateaurainfed 'an d 'plainrainfed ' (Section 5.3),th efina l establishmentdat ei sconsidere dt ob emid-October .Fo rth elan d units 'plateauwaterway 'an d 'plainwaterway' ,secon dric ecro p establismenti sstil lconsidere d possibleunti lth een do f October.Th eseedin gwindo wfo rmun gcro pestablishmen tfollowin g awe tseede dHY Vcro po nfield swit hadequat edrainag ei sfro m lateOctobe runti lth ethir dwee ko fNovember .Th elates tdat efo r seedingmun go rcowpe aafte rBE- 3i sconsidere d tob efro mth e thirdwee ko fDecembe runti lth een do ftha tmonth .

Exceptfo rsecon dric ecrops ,th epatter no fcro pestablishmen t 189 forth ecro pseaso no f 1979-80,wa si nclos econformit ywit hthes e cut-offdates .I nfact ,farmer swh odi dno tplan tcor no rdr y seededrice ,use dthes ecut-of fdate s(amon gothe rthings )t o explaintha tthe ywer eto olat ei npreparin gthei rfield st o safelyestablis hthes ecrops .However ,a sbecam eapparen tfro m plantingdecision smad eb yfarmer si n198 0an d198 1(Sectio n7.3) , cut-offdate sar eno ta srigi da sth eter mimplies .The yar e generallyuse da sreferenc edate sbefor eo rafte rwhic hcrop sca n berelativel ysafel yplanted ,wherea sperceive dris ko fpoo rcro p developmento rcro pfailur eincrease sth elate ro rearlie rth e cropi splanted .Moreover ,cut-of fdate schang ea sfarmer sgai n moreexperienc ewit ha ne wtyp eo ftechnology .Fo rexample , initialcut-of fdate sfo rdr yseede dHY Vcrop swer ebase do nth e farmers'experienc ewit hdr yseede dBE-3 .Thes ecut-of fdate s turned outt ob erathe rconservative .I nth eabsenc eo fa secon d ricecro ppossibility ,ther ewa sn orea lpressur ewit hBE- 3t o establishth ecro pa searl ya spossible .

7.2.2 Croppingstrateg yperformanc e Whatcroppin g patternwil lb erealize d inan yparticula rseaso n dependso nth erainfal lpatter ni ntha tseaso na swel la so nth e firstcro pfarmer sar eplannin gan dabl et oestablish .T oasses s theperformanc eo fth eabov ecroppin gstrategie si nterm so fth e likelihood thatth eplanne d patternca nb erealize do rtha ta switchha st ob emad et oa nalternativ epattern ,th einfluenc eo f variationsi nth erainfal lpatter no ncroppin gpatter nfeasibilit y needst ob eanalyzed .A wate rbalance/croppin gpatter nsimulatio n model (Boltonan dZandstra ,1980 )wa suse dt omimi cth e variability inth eonse tan dterminatio no fth erainfal lseason , employinga time-serie s (16years )o factua lrainfal ldat afro ma nearbyrainfal lstation .Fo rth evariou slan dunits ,thi smode l allowsa nassessmen to fwhethe rrainfal land/o rsoi lmoistur e conditionsar esufficien tfo rlan dpreparatio nan destablishmen t ofth efirs tan dsecon dric ecrop sa swel la scor nan dmungbea n crops.I tdetermine sth eemergenc edat eo fdr yseede dric ecrop s andgenerate sdat ao nth eincidenc eo fdrough tstres so rprematur e floodingo festablishe d crops.Th esimulatio nmode lals oinclude s thevariou scut-of fdate sfo rcro pestablishmen ta sindicate db y farmersa swel la sa yiel dpredictio nroutin efo rsecon dric e cropsbase do nth eincidenc eo fwate rstres s(Bolton ,1980) .

Theresult so fth ecroppin gpatter nsimulatio nmode lfo rtestin g thetechnica lfeasibilit yo fa DSR-WS Rpatter nfo rth elan dunit s 'plateaurainfed 'an d 'plainrainfed 'ar epresente d inTabl e 7.2.1.Th eplanne dDSR-WS Rpatter ni srealize do nth eplai nan d plateaufields ,i n31 %an d44 %o fth eyear srespectively .O nbot h landunits ,th eestablishmen to fdr yseede dHY Vcrop si spossibl e inroughl ythre eyear sou to ffour .However ,becaus eo fa mor e rapidwate raccumulatio n inplai nfields ,dr yseede dric ecrop s oftenfai ldu et ofloodin go fth efiel dbefor esee dgermination . Forth eplai nfields ,mor etha nhal fo fth edr yseede dcrop sfai l duet oearl ydrough to rprematur efloodin go fth efield .Fo rth e 190

Table7.2. 1 Simulationo fth e performanceo fth e cropping patternstrateg y DSR-USR;1 6year srainfal l(0.2 0h aplot ) Plain Plateau

Patterns realized (%) DSR 6 6 UISR- Mungbea n 25 31 Total single rice 31 37

DSR -WS R 31 44 WSR -UIS R 37 18 Total double rice 68 62

Pattern failures (%) DSR early failures 40 20 2nd crop failures 36 50

Successful double rice cropping 44 31 plateaufields ,th eris ko fearl ycro pfailur ei ssubstantiall y less,wit hcro pfailure si ntw oyear sou to fseven .Hence ,fo r plainfield swe tseedin gofte nreplace sdr yseeding ,i nsuc ha wa y thata 'wetseede d- we tseede drice 1 (WSR-WSR)patter ni s realized in37 %o fth eyears .A doubl eric ecroppin gpattern , irrespectiveo fth eplantin gmethod ,i splante di nmor etha n60 % ofth eyear so nbot hlan dunits .

However,th esimulatio nmode lpredict sa substantia lnumbe ro f secondcro pfailures .Fo rth eplai nfield sroughl yone-thir do f thesecon dric ecrop sha syield sles stha n30 0k gpe rhectare , whereasfo rth eplatea ufield shal fth enumbe ro fsecon dcrop s failed.Becaus eo fthei rlat eplantin gdate ,thes efailure s particularlyoccu rfo rsecon dcrop stha tar eprecede d bya we t seededcrop .Whe nthes esecon dcro pfailure sar esubtracte dfro m thetota lnumbe ro fdoubl eric ecrops ,th emode lpredict s successfuldoubl eric ecroppin gi n44 %an d31 %o fth eyear sfo r theplai nan dplatea ufields ,respectively .

Thetechnica lfeasibilit yo fth ealternativ ecroppin gpatter n strategy 'corn- we tseede dric e- mungbean 'i spresente di nTabl e 7.2.2.Thi sstrateg yinclude sth epossibilit yt oswitc ht oa secondric ecro pplantin g (insteado fmungbean )i ncas esuc his 1 feasible.I nbot hplai nan dplatea ufields ,earl yseaso ncor n plantingsoccur si n25 %o fth eyears .Fo ra simila rnumbe ro f years,th eplanne d patterni srealize d forth eplatea uposition , whereasfo rth eplai nfield sthi soccur si n19 %o fth eyears .Th e percentageo fdoubl eric ecrop srealize dwit hthi scroppin g strategyi ssubstantiall y belowtha to fth eabov ediscusse d patternwit hdr yseede dric ea sfirs tcro poption .Fo rth eplai n position,a doubl eric ecroppin gpatter noccur si n44 %o fth e years,whic hi sabou tone-thir dles scompare dt odoubl eric ecrop s realizedwit hdr yseede dric ea sfirs tcro poption .Fo rth edrie r 191

Table7.2. 2 Simulationo fth eperformanc eo fth ecroppin g pattern strategy Corn-UISR-CTung;1 6year srainfal l (0.20h aplot )

Plain Plateau

Patterns realized (%) USR 6 6 USR -Nungbea n 31 38 Corn -US R- Mungbea n 19 25 Total single rice 56 69 Corn -US R- US R 6 USR -US R 38 31 Total double rice 44 31

Pattern failures (%) Corn early failures 25 19 Second crop failures 43 40 Mungbean failures 25 12 Successful double rice cropping 25 19 plateauposition ,th enumbe ro fdoubl eric ecrop swit hcor na s firstoptio ni shal fo ftha twit hdr yseede dric ea sa firs tcro p option.Successfu ldoubl eric ecroppin g (i.e.,afte rsubtractin g thesecon dcro pfailures )occur si n25 %an d 19%o fth eyear sfo r theplai nan dplatea ufields ,respectively .

Fromth eabove ,i tca nb econclude dtha thavin ga dr yseede dHY V asfirs tcro pplantin goptio nsubstantiall y increasesth echanc e ofa successfu ldoubl eric ecro pcompare d tohavin gcor na sa firstcro poption .Fo rrainfe d plainfields ,th emode lpredict sa n increasei nsuccessfu ldoubl eric ecrop sfro m22 %t o44% ,wherea s forrainfe d plateaufields ,th echanc eo fa successfu ldoubl eric e cropsincrease sfro m19 %t o31% .

7.2.3 Economicreturn st ocroppin gstrategie s Basedo nth ecos tan dreturn so findividua lcrop swithi ncroppin g patternsan dgive nth echanc eo foccurrenc eo feac ho fth evariou s croppingpattern sassociate dwit hfollowin ga certai ncroppin g strategy,i ti sno wpossibl et odetermin eth eeconomi creturn st o croppingstrategies .Th eprofitabilit y ofth evariou scroppin g strategieswil lb eassesse di nterm so fth egros smargi nt ofamil y factors.Tha tis ,al lpaid-ou tcos tar esubtracte d fromth egros s return,excep tfo rth elandren tpayment .Further ,sinc eth emai n questioni swhethe rdoubl eric ecroppin gallow sa remunerativ e absorptiono ffamil ylabour ,i ti sassume dtha tal lcro p operationsar ecarrie dou tb yfamil ylabour ,excep tfo rthos e operationstha trequir ea hig hlabou rinpu ti na shor tperio d (transplantingan dharvesting) .I naggregatin gth ecos tan d returnso findividua lcrop sfo reac ho fth eoccurrin gcroppin g 192 patterns,possibl ecarry-ove reffect sbetwee ncrop smus tb etake n intoaccount ,e.g .lan dpreparatio nfo rth efirs tric ecro pi s highlyreduce di fsuc hcro pi sprecede db ya cor ncro po ra faile d dryseede dric ecrop .Further ,t oth eexten ttha tinput sincurre d withfaile dcrop scanno tb econsidere d beneficiala sinput sfo r thesucceedin gcro p(e.g .seeds ,labou rfo rcro pestablishment) , thecos to fthes einput smus tb einclude d inth etota lcos to fth e croppingstrategy .

Table7.2. 3present sth eleve lo fpaid-ou tcos tan dth egros s margint ofamil yfactor spe rhectar ea swel la spe rlabou rhou r forindividua lcrop san dcroppin gpatterns .Th epresentatio nof ^ datai srestricte dt oth erainfe dplai nposition .Apar tfro mth e twocroppin gstrategie sdiscusse dabove ,als oth ecos tan dretur n ofth etw oBE- 3base dric ecroppin gpattern sar eincluded .Th e grossretur nfigure sfo rric ecrop sar ederive d froma fertilize r responsefunctio nan dyiel dsimulatio nstud ywhic har ediscusse d indetai li nChapte r8 .The yrepresen tgros sretur nlevel sfo r normalfertilize rinputs .Th egros sretur nestimate sfo rth enon - ricecrop sar ebase do ncro pproductio ndat aobtaine ddurin gth e threeyea rperio do f1978-1980 .Als oth elabou rinpu tan dmateria l costfigure sar ebase do nth e1978-8 0productio ndata .Fo rth e labourinput ,a distinctio ni smad ebetwee nlabou rsupplie db y£h e householdan dhire dlabour .Th ehire d labourinpu ti slimite d tb thetransplantin gan dharvestin go frice .Powe rcos tinclude sth e paymento fmechanica lric ethreshing .Th emateria linpu tfigure s

Table 7.2.3 Costan dretur no f individualcro p activities,croppin gpatterns ,an dcroppin g strategies;rainfe dplai nfield s

Family Hired Material Gross margin Gross labour labour Power input Total to family factor* return input cost cost cost cost ha hr ($) (hrs) ($) ($) ($) ($) (I) ($cts) Individual crops DSR HYV 450 335 50 25 53 128 322 0.96 WSR HYV (1st) 450 266 50 25 51 126 324 1.22 WSR HYV (2nd) 1) 310 168 34 17 45 96 214 1.27 WSR HYV (2nd) 2) 183 168 24 12 35 71 112 0.67 DSR BE-3 423 350 47 23 42 112 311 0.89 TPR BE-3 423 215 87 23 40 150 273 1.27 Corn 58 115 1 1 57 0.50 Mungbean 49 78 13 13 36 0.46

Patterns DSR(HYV)-WSR(HYV) 760 503 84 42 98 224 536 1.07 WSR(HYV)-WSR(HYV) 633 434 74 37 86 197 436 1.01 Corn-UISR(HYV)-nungbean 557 459 50 25 65 140 417 0.91 USR(HYV)-Hungbean 499 344 50 25 64 139 360 1.05 Corn-TPR(BE-3 )-Nungbea n 530 408 87 23 54 164 366 0.90 DSR(BE-3)-l»lungbean 472 42B 47 23 55 125 347 0.81

Strategies DSR(HYV)-WS R(HYV ) 629 476 70 35 92 197 431 0.91 Corn-li)SR(HYV )-Nungbea n 567 414 62 31 73 165 402 0.97 Corn-WSR(HYV)-Nungbean 3) 510 381 51 25 63 139 372 0.98 ;

1) SecondWS R cropfollowin gDS R asfirs tcrop . 2) SecondUIS Rcro pfollowin gWS R asfirs tcrop . 3) Withoutoptio nt oestablis ha secon dWS Rcro p insteado f mungbean. 193 representaverage sfo rth ethre eyea rperio dan dinclud eseeds , fertilizers,pesticide san dherbicides .

Thefirs tpar to fTabl e7.2. 3 showsth ecos tan dretur no fric e cropactivitie san do fth etw omajo ruplan dcrop stha teithe r precede(corn )o rfollo wric ecrop s(mungbean) .Th eindicate d yieldleve lfo rdr yseede dan dfirs twe tseede dHY Vcrop sassume s normalcro pgrowt hdevelopmen tan da goo dleve lo fwee dcontrol . Incalculatin gth ecos tan dretur no fcroppin gstrategies ,i ti s assumed thata nearl yfailur eo fdr yseede dHY Vwil lb ereplace d bya we tseede dcrop .Excep tfo rth ehighe rlabou rinpu tfo r weeding,othe rinpu tfactor sfo rdr yseede dHY Var eassume d tob e similart owe tseede dcrops .I ncomputin gth ecos tan dretur no f secondHY Vcrops ,a distinctio ni smad ebetwee nsecon dric ecrop s followingdr yseede dric ean dsecon dcrop sfollowin gwe tseede d rice.Th eforme rca nb eestablished ,o naverage ,on emont h earlier,thu sexperiencin ga muc hlowe rris ko fdrough tstres s duringth ereproductiv egrowt hstag e(Chapte r8 )and , consequently,show sa highe rgros sretur nlevel .Th egros sretur n levelso fBE- 3crop sar ever ysimila rt othos eo fth eHY Vcrops . Atnorma lfertilize rdosage sth eBE- 3crop syiel dsomewha tlowe r thanth eHY Vcrops ,bu tth emarke tpric efo rBE- 3i ssomewha t higher.Th elabou rinpu tfo rdr yseede dBE- 3i sroughl ysimila rt o thelabou rinpu trequire dfo rdr yseede dHYV .Althoug hBE- 3stay s inth efiel dfo ra muc hlonge rperiod ,th epresenc eo fstandin g wateran dth eheigh to fth eplan tar eusuall ysufficien tt o controlweed sa tth elate rgrowt hstag eo fth eplant .Transplante d BE-3ha sth elowes tfamil ylabou rinpu trequirement .Simila rt o dryseede dBE-3 ,th ewee dcontro lcos ti slo wan dtransplantin gi s assumed tob ecarrie dou tb yhire dlabourers .

Thesecon dpar to fTabl e7.2. 3 showsth ecos tan dretur no f croppingpattern semployin ga simpl eaggregatio no fcost san d returnso findividua lcrops .O fthes ecroppin gpatterns ,th eDSR - WSR patterni sth emos tattractiv ebot hi nterm so fth ereturn st o familyfactor spe rhectar ean dpe rlabou rhour .Compare dt oth e alternativeHY Vpatter n 'corn- we tseede dric e- mungbean' ,th e grossmargi nt ofamil yfactor spe rhectar eo fth eDSR-WS Rpatter n isabou t30 %higher .Th eincrementa lretur npe rlabou rhou ro f thispatter nrelativ et oth e 'corn- we tseede dric e- mungbean ' patterni sabov eth eongoin gwag erate .Thi simplie stha tth eDSR - WSRpatter ni seconomicall yattractiv ebot hfo rhousehold swit h amplefamil ylabou rresource stha tattemp tt omaximiz eoutpu tpe r unito flan dan dfo rhousehold swit hlimite d labourresource stha t attemptt omaximiz eoutpu tpe rlabou rhour .Th eBE- 3base d croppingpattern sar eclearl yth eleas tprofitable .However ,th e returnspe rlabou rhou ro fth etransplante d BE-3patter nar e similart othos eo fth eHY Vpatterns .

Thedifference sbetwee nthes ecroppin gpatter nactivitie sbecom e muchles spronounce dwhe nth echanc ei sconsidere d thatsuc h patternsma yactuall y berealize da swel la stak eint oaccoun t possibleswitche st oothe rpattern si ncas esuc hi sno tpossible . 194 Inth ethir dpar to fTabl e7.2.3 ,th ecost san dreturn so f cropping strategiesar epresente d basedo nth eprobabilit y weightedmea no fth ecost san dreturn so fth evariou scroppin g patternsrealize dthroug hthes estrategies .Fro mthes e calculations,i tca nb econclude d thati tdoe sno tmak emuc h differencei nreturn spe rhectar ean dpe rlabou rhou rwhethe rtlh e DSR-WSR strategy isfollowe do rth ealternativ e 'corn- we tseede d rice- mungbean 'strategy ,i ncas eth elatte rallow sth eplantin g ofsecon dric ecrop swhe nsuc hi spossible .Eve ncompare dt oa 'corn- we tseede dric e- mungbean 'strateg y thatdoe sno t consider secondric ecro pplantings ,th ebenefit so fth eDSR-WS R patternar emuc hles spronounced .

Ofcourse ,th equestio narise swhethe r statisticalmean so f outcomeso fstrategies ,tha tconside rth eoutcome so factivitie s inth elon gterm ,hav ean ymeanin gwithi nth econtex to ffarmers ' decisionmaking .Base do nth eevidenc econcernin gth eadoptio no f theDSR-WS Rcroppin gpatter npresente di nSectio n7.3 ,i tappear s thatcroppin gchoice so ffarmer sar eguide db yrelativel ysimpl e economicretur ncalculation ssuc ha spresente d inth esecon dpar t ofTabl e7.2.3 ,wherea si nassessin gth eris kattache d tosuc h croppingpattern sthe ythin ki nterm so fth eabov ecroppin g strategies.Th eimplicatio ni stha tfarmer shav ea rathe rpositiv e assessmento fth ebenefit so fcroppin gpatter nactivitie san d perceivea muc hlowe rretur nris ka sstric tadherenc et oon e particularcroppin gpatter nwoul dindicate .

7.2.4 Cropping strategyris k Riski nterm so fth eoutpu tvariabilit yo fcroppin gstrategie s resultsfro mtw odifferen tsources .Th efirs tsourc ecomprise sth e variabilitydu et oth eoccurrenc eo fth edifferen tcrop so r croppingpattern sactuall y realizedcause db ydifference si nth e year-to-yearrainfal lpattern .Th esecon d sourcecomprise sth e outputvariabilit yo findividua lcrop si nth ecroppin gpattern .

Basedo nth eabov einformatio nregardin gth eperformanc eo fth e croppingstrategy ,i ti sstraightforwar d todetermin eth e variability causedb yth eoccurrenc eo fdifferen tcroppin g patternsresultin gfro mvariation si nth erainfal lpattern .Th e realproble mlie si ndeterminin gth eoutpu tvariabilit yo f individualcrop swithi ncroppin gpatterns .Thi si sdu et o difficultiesi nassessin g (1)th eincidenc eo fth eearlie r discussedris kfactor saffectin gcro pgrowt h(e.g .wee dincidence , pestinfestation) ,an d (2)whethe rsuc hris kfactor sactuall y adverselyaffec tcro pgrowth .A swa sdiscusse d inSectio n7.1 , finalyiel dris ki sth eresul to fa grea tnumbe ro findividua l riskfactor stha toccu ra tdifferen tstage so fth egrowt hcycl eo f thecro pan dtha tma yo rma yno tb econtrolle d byfarmers .B y intervening inth eproductio nprocess ,farmer swil lattemp tt o reduceth eeffec to fthes efactor so ncro pgrowt ha sthe yoccu ri n thecours eo fth egrowt hcycl eo fth ecrop .Fina lretur nris ko f individualcro pactivitie swil lthu sb ea functio no fth e 195 influenceo funcontrollabl eris kfactor ssuc ha sdrough tstres s duringseedlin gstag ean dris kfactor stha tar epotentiall yunde r thecontro lo ffarmer sbu tfo rsom ereaso ncanno tb econtrolled , e.g.du et olabou rconstraints .Controllabl eris kfactors ,suc ha s weedincidence ,essentiall ycaus euncertaint ywit hrespec tt oth e anticipated costo fproduction .

InChapte r8 ,th evariou smethod st oquantitativel yasses scro p activityris kwil lb ediscussed .Regardin gth eris ko fcroppin g patternstrategies ,th eanalysi swil lb econfine d toa qualitativ e assessment.Base do nth evariou saspect so fDSR-WS Rric ecroppin g considered above,th emai nrisk sattache d tothi spatter na s comparedt osingl eHY Vcroppin gca nb edescriptivel y summarizeda s follows:First ,du et oa nearl yfailur eo fdr yseede drice ,th e farmerface sth elos so fseed san dlabou rinvestements .Th eris k ofsee dlos s($25/ha )ma yloo mlarg eespeciall yfo rnon-surplu s householdshavin ginsufficien t seedstock san dric efo r consumption.Th eris ko fa los so flabou rinvestment s($38/ha )i s particularly relevantt ohousehold stha thav et ohir elabou rfo r cropestablishment .Second ,excessiv ewee dgrowt hi ndr yseede d ricema yrequir ea heav ylabou rinpu tfo rweedin gan dpossibl y replanting.Farmer swit hinsufficien tlabou rma yhav et oploug h thecro pan d incurth esam elosse sa sdiscusse dabove .Third , farmersma yno tb eabl eo rotherwis ema yge tseriousl ydelaye di n theestablishmen to fth esecon dric ecro pi ncas eo flo wfamil y labouravailabilit y combinedwit ha tigh twag elabou rmarket . Fourth,becaus eseedin go fth esecon dric ecro poccur sa tth e heighto fth erain yseason ,farmer sma yfac eth eris ko fsee do r seedlinglos sdu et ouncontrolle d flashflood swashin gou tnewl y seededfields .Fifth ,dependin go nth eseedin gdate ,farmer sfac e a substantialris ko fsecon dcro pfailur edu et odrough tstres s duringth ereproductiv egrowt hstage .Th elos sincurre d ismuc h highercompare d toa nearl yfailur eo fdr yseede drice .Apar tfro m thelabou rinvestmen t ($50/ha)an dseed s ($18/ha),farmer sals o loseth efertilize rinvestmen t ($30/ha).Again ,riskin gth elabou r investmenti sparticularl y seriousfo rfarmer swh ohav et ohir e labourfo rcro pestablishment .

Apossibl ewa yo freducin gyiel dris ko fsecon dcrop si st ous e transplantinga sa nestablishmen ttechniqu erathe rtha nwe t seeding.Whe nth eseedbe di sprepare dwel li nadvanc eo fth e plantingdat eo fth esecon dcrop ,transplante d cropsma yhav ea headstarto fabou t2- 3 weeksove rwe tseede dcrops .Thi sclearl y reducesth eris ko fcro pfailur edu et olat edrough tstress . Moreover,i ti sno tnecessar yt odrai nth efiel dcompletel ya si s thecas ewit hwe tseede dcrops .Thus ,apar tfro mth eothe r agronomicadvantage sassociate dwit htransplante d ricecrop s (Section 7.1),th e 'dryseede d- transplante d rice'(DSR-TPR ) croppingpatter nha sa substantia lhighe rchanc eo fsucces stha n theDSR-WS Rpatter n(Bolton ,1980) .

However,a swil lb eshow ni nth enex tsection ,th eDSR-TP Rpatter n isno tadopte d forth efollowin greasons .First ,transplantin ga 196 secondcro pi sn oguarante efo rearl ycro pestablishment .Becaus e ofth epossibilit yo fa dr yspel lfollowin gth eharves to fth e firstcrop ,lan dpreparatio nan dcro pestablishmen tma yge t delayed,possibl yresultin gi novergrow nric eseedling si nth e seedbed.I nth ewors tcase ,afte rseedbe d establishment,i tma y notb epossibl et oestablis ha secon dric ecro pa tall .Second , andprobabl ymor eimportant ,becaus eo fth erestricte dwag elabou r marketi nth evillage ,i tca nb ea seriou sproble mt ofin dhire d labourfo rtransplanting .A tth etim elabou ri srequire d forthi s operation,othe ran dbette rpayin gwag elabou ractivitie sar e competing forlabour ,suc ha sric eharvesting ,lan dpreparatio n forth esecon dcrop ,an dhaulin go fric efro mfar-awa yfields . Againthi sma ycaus ea dela yi ncro pestablishment .Third , transplanting involvesa hig hinvestmen tearl yi nth egrowt hcycl e ofth eric ecrop ,wherea sth ereturn so nthi sinvestmen tar e highlyuncertain .Thus ,th ecombine d effecto fhig hinitia l investmentcos tassociate dwit htransplantin g (includingth etim e required inorganizin ga hire dlabou rgroup )an dth epossibilit y thattransplantin gma yge tseriousl ydelayed ,essentiall ymake s thetransplantin go fsecon dric ecrop sa hig hris kventur ei n termso fne treturn st ofamil yfactors .

7.2.5 Croppingstrateg yfi t Thefina lste pi nevaluatin gth eattractivenes so fdoubl eric e croppingshoul dconcer nth e 'fit'o fth ecroppin gpatter ni nth e overallcroppin gsystem .Th edegre eo f 'fit'o fa strateg y considersit scompetin grequirement sfo rland ,labou ran dcas hvi s a_vi sth ereturn stha tca nb eexpecte d relativet oth eresourc e requirementsan dreturn so falternativ estrategies .Fo rexample: , suchanalysi stake sint oaccoun tth eopportunit y costo ffamil y labourdetermine d byth ebenefit sforegon ewhe nlabou ri suse di n alternativeactivities .Suc hanalysi sshoul dals oconside rth e opportunitycos to fcas haffectin gbot hinpu tprice san dth e perceived benefitso factivities .Fo rexample ,fo rpoo rhousehold s theperceive d benefitso fa nearl ycor ncro pharveste ddurin gth e leanperio dma yli esubstantiall y aboveth emarke tprice .Cor n substitutesric etha totherwis eha st ob eborrowe da tth eloca l creditmarke tagains ta stee pinteres trate .

Astandar d techniqueusuall yemploye di neconomic st oanalyz esuc h problemsi slinea rprogramming .Thi stechniqu eallow sa quantitativeassessmen to fth eimportanc eo fconstraint s(e.g . resourcelimitations )i nlimitin gth efeasibilit yo factivitie s andthu sth eoutpu tderive d fromth eproductio nsystem .I nth e usualapplicatio no fthi stechniqu et ochoic eproblem sinvolvin g riskyactivities ,resourc econstraint sa swel la sinpu t requirementsar econsidere d fixed,i.e. ,ther elevel sar e predetermined.Ris ki susuall yconfine dt oactivit yreturns .Th e non-stochasticcharacte ro fth elinea rprogrammin gmode li sthu s largelyretained .Suc hmodel sar einadequat et oanalyz eth e croppingstrateg yfi ti nth eoveral lcroppin gsyste mbecaus ebot h theresourc econstraint san dinpu trequirement so fsuc hstrategie s 197 landan dlabou rresource sca nb euse deffectivel ydepend so nth e uncertainonse tan ddeclin eo fth egrowin g season,wherea slabou r requirementsfo rreplantin go rweedin gdepen do nth eearl yseaso n rainfall.I nturn ,croppin g strategiesinterac twit huncertai n resourceconstraint san dinpu trequirement so fothe rcroppin g strategies.Whe nw efurthe rad dt oth echoic eproble mth e uncertaintywit hrespec tt oth eavailabilit y ofwag elabou r opportunties,credi tavailability ,etc. ,i twil lb eclea r- withoutgoin gint ofurthe rdetai l- tha tsuc hanalysi sbecome s verytenuous ,dat ademandin ga swel la stim econsumin gan da tbes t mayprovid ea reasonabl eapproximatio nt orea lproductio n circumstances.Althoug heconomi cchoic emodel sexis ttha ttak e intoaccoun tsom eo fth eabov eindicate d uncertainties,thes e modelsar edifficul tt oappl yi nactua lpractice .Mor e importantly,i ti squestionabl ewhethe rth eresult sfro msuc ha n exercisear eo fan yus et ofarmer sor ,otherwise ,ca nhel pt o explainfarmers 'behaviour .Thi spoin twil lb etake nu pagai ni n Chapter9 .

7.3 Processan dpatter no fdoubl eric ecroppin gintroductio n Basedo nth eabov etyp eo fanalysi s- whic hconsider slong-ru n expectedcos tan dreturn so fcroppin gpatter nstrategie s- t oman y outsidersth eDSR-WS Rdoubl eric ecroppin gtechnolog ywoul dsee m tob eto orisk yfro ma productio npoin to fview :th efirs tcro p facesa sever eris ko ffailur edu et odrough tdurin gth ebeginnin g ofth egrowt hcycle ,wherea sth esecon dcro pface sa sever e droughtris kdurin gth elatte rpar to fth egrowt hcycle .Whe n theserisk sar econsidere dwithi nth econtex to fth erelativel y lowadditiona lreturn stha tca nb eexpecte d fromthi spatter ni n thelong-run ,i twoul d a_prior ino thav eappeare da viabl e alternativet oexistin gpatterns .I ti sthu srathe rsurprisin g thatfarmer sthemselve sstarte dt oexperimen twit hthi s technology.

Below,th eproces sb ywhic hdoubl eric ecroppin gwa sintroduce d andgraduall yadopte d byfarmer swil lb eanalyzed .Th eadoptio n situationdiffer sfro mth eusua lsituation .Th einnovatio nwa sno t introduced fromoutsid eth evillag eb ya nextensio nservic eo r otherorganization ,bu twa sdevelope d fromwithi nth efarmers ' community,withou tan ysubstantia lsuppor to rpressur efro m outside.A numbe ro fvaluabl elesson sca nb elearne d fromstudyin g thisadoptio nprocess ,particularl y regardingth emanne ri nwhic h farmersgraduall ychang efar mplan san ddea lwit hinnovatio nrisk . Thus,befor ediscussin gwha tcategorie so fhousehold sadopte d doubleric ecropping ,a brie fchronologica laccoun twil lb egive n ofth eadoptio nproces sdurin gth eperio do f197 8unti l1982 .I n describing thisprocess ,a distinctio nwil lb emad ebetween ,o n theon ehand ,th ekin do fcroppin gpattern sfarmer swer eplannin g toimplemen tand ,o nth eother ,th ecroppin gpattern sthe y actually realized (2).Fo rth e1978-7 9croppin gseason , informationabou tfarmers 'cro pproductio nplannin gi slacking , 198 thusonl yactua lmanagemen tpattern sar ediscussed .

7.3.1 Farmers'experience swit hdr yseede dric ean ddoubl eric q cropping Thefirs tattemp tt odr yseedin ga nHY Vcro poccurre d in197 7wit h theIR3 0ric evariety .Th eexperimen twa sundertake nb ya farme r (arespecte dopinio nleader )o na partiall yirrigate dsideslop e areawher eh eusuall ycultivate ddr yseede dCamoros .Thi snon - photosensitivereddis hgrai nvariet yha sa growt hduratio no f about4 months .Farmers 'previou sattempt st ogro wa secon d transplantedHY Vcro pafte ra dr yseede dCamoro sfaile dbecaus eo f itslat eplantin gdate .Th epalay-an gIR3 0cro pprove dt ob e successful.However ,th esecon dcrop ,a transplante d IR36wa sa failurebecaus eo fver ypoo rpost-monsoo nrainfal lconditions .

Ricecro pmanagemen t1978-7 9 Apparently,base do nth efavourabl eexperienc ewit hdr yseede dHY V in1977 ,a fe wothe rfarmer sstarte dexperimentin gwit hdr y seedingHYV si n1978 .Th eearl yonse to fth epre-monsoo nrainfal l facilitated theestablishmen to fdr yseede dcrops .O fth efiv e farmers,tw oestablishe d dryseede dIR3 0(o fwhic hon eha da portionmixe dwit hIR29 )an dthre efarmer sestablishe d dryseede d IR36.Thes edr yseede dHY Vcrop soccurre d onrelativel ysmal l areascoverin gabou t5 %o fth etota lric eare ao fth esampl e farmers.Al lfarmer sha dobtaine d experiencewit hdoubl eric e croppingi npreviou syears .Fou ro fthe mbelonge d toth emiddle- 4 aged household category,tw oo fwho mt oth enon-surplu san dtw ot o thesurplu shouseholds .On efarme rbelonge dt oth eol dhousehol d > category.Th eresult sobtaine dwit hth edr yseede dHY Vcrop swer e mixed,dependin gmainl yupo nth eleve lo fwee d infestationan d weedcontrol .Yield spe rhectar erange dfro m0. 9 tons/hat o4. 1 tons/ha.Averag eyield swer ei nth eorde ro f2. 3tons/ha ,a leve l wellbelo wth eaverag eyield sobtaine dwit hwe tseede dHY Vcrops .

Therainfal lpatter ni n197 8als ofavoure dth eestablishmen to f secondric ecrops .Mor etha nhal fo fth esampl efarmer s(63% ) established asecon dric ecro pcoverin g 19%o fth etota lric e area,o fwhic h25 %wa sprecede d bya dr yseede dHY Vcrop .I nthi s yearfarmer swer estil li nth eproces so ffindin gth ebes ttyp eso f cropestablishmen ttechniqu ean dric evariet ya swa sindicate db y thediversit yi nth etype so fdoubl eric ecroppin gpattern san d: ricevarietie sused .A si tturne dou ti nth enex tseason ,thi s! yearessentiall ymark sth efina lstag ei nth etransitio nfro m * doubleric ecroppin gpattern sbase do ntransplante d ricea ssecon d cropt opattern sbase do ndirec tseede dcrops .Thi syea rals o marksth eoncomin gdominanc yo fIR36 .Apar tfro mth eDSR-WS R patterncoverin g 19%o fth edoubl eric ecro parea ,th elarges t areao fdoubl eHY Vric ecrop sconsiste d ofa we tseede d- we t seededrice '(WSR-WSR )patter n (54%),stil lincludin gsuc hric e varietiesa sIR26 ,IR30 ,IR1561 ,an dIR29 .Othe rdoubl eHY Vric S croppingpattern swer ecompose do f 'transplanted- we tseede d rice'(TPR-WSR )(12% )an d 'dryseede d- transplante drice * 199 (DSR-TPR) (6%). Two double rice cropping patterns were observed to have transplanted BE-3 as the second crop,i.e. ,WSR-TP R (8%); TPR- TPR (10%). The post-monsoon rainfallwa s not particularly favourable for crop development.A number of late planted rice crops failed due to drought stress.Th e average yield of second crops following dry seeded rice was 2.3 tons/ha,rangin g from 1.8 tons/ha to 2.6 tons/ha.Secon d crops following wet seeded or transplanted rice crops had a substantial lower yield of 1.2 tons/ha onaverage .

Rice crop planning 1979-80 The area planned to be double cropped with a DSR-WSR pattern increased substantially for 1979 compared to the actual area planted to this pattern in 1978.Th eare a roughly tripled covering 13% of the total rice area,wherea s the percentage of farmers planning to have DSR-WSR increased from 17%t o 33%(Tabl e 7.3.1).

Management 1979-80 The crop season of 1979-80experience d excellent initial conditions for the establishment of dry seeded crops.Rainfal l in April was sufficient to allow a first ploughing of fields (bungak) not yet ploughed in the dry-season.Wee d seeds could germinate and rainfall inmid-Ma y allowed for a second ploughing after which the fieldswer e dry seeded in slightly moist conditions (samara seeding). Because the rainfall pattern facilitated a bungak ploughing in April,afte r which farmers could assess thewee d infestaton in their fields,a substantial number of farmers that had not planned to have dry seeded HYV still decided to establish

Table7.3. 1 Plannedan drealize ddoubl eric ecroppin gpattern sa spercentag eo f totalric eare aan dtota lnumbe ro fsampl efarmer s(i nparentheses ) 1978 1979 1980 1981 1982 DSR- IDS R planned 12.8(33 ) 13.7(38 ) 23.9(61 ) 26.2(61 ) realized 1) 3.5(17 ) 10.6(42 ) 13.4(42 ) 20.4(48 ) DSR- TP R planned realized 1.1( 8 ) 1.4( 4 ) 1.8( 9 ) WSR- WS R Planned 15.2(42 ) 24.0(67 ) 22.6(61 ) 21.8(57 ) realized 8.6(29 ) 8.9(29 ) 25.0(79 ) 23.6(61 ) Other planned 3.6(13 ) 0.1(8 ) 1.2( 9 ) realized 5.8(21 ) 0.1( 4 ) 2.7(13 ) 2.2( 9 ) Total planned 31.6(75 ) 38.5(83 ) 47.6(87 ) 48.0(87 ) realized 19.0(63 ) 21.3(63 ) 41.1(79 ) 48.0(83 ) 1) Realizedpattern sexclud eearl yfaile ddr yseede dric ecrops ,bu tinclud e failedsecon dric ecrops . 200 this crop,wherea s anumbe r of other farmers decided not to establish a dry seeded HYV crop because of anticipated weed problems.Th e percentage of farmers actually establishing a dry seeded HYV crop increased from 21%i n 1978 to 69% (!) in 1979,wherea s the area roughly quadrupled, covering- 1' two yearsafte r the first farmer started with dry seeded HYV cropping - 17%o f the total rice area. It is interesting to note that during this year farmers attempted to intercrop cornwit h dry seeded rice based on their experience with the existing intercrop of dry seeded Camorosan d corn.Th e effort,however ,wa s not successful and not repeated during the study period.

Rainfall conditions after seeding did not favour crop development. The germination rainswer e not enough to sufficiently penetrate the soil resulting in poor and incomplete germination.Afte r the seeds had germinated, a dry spell of about 3week salmos t killed the young rice seedlings.Th e drought problem was aggravated by a severe attack of mole crickets.Becaus e of these two problems,a large part of the planted rice crops failed. Roughly one-third of the area planted todr y seeded HYV area failed and had to be entirely re-seeded, effecting 46%o f the farmers.O f the remaining area, a substantial number of cropswa s heavily infested with weeds requiring in part pulling of seedlings after which the field had to be ploughed again and subsequently replanted. Households with insufficient labour towee d theDS R crops had problems in finding wage labourers.Th e surviving dry seeded HYV crops recovered fairly well. If anything, it showed the drought tolerance of this rice variety which turned out to be at least as good as that of theBE- 3 variety.

Due to the uneven germination of the rice crop, farmers encountered a new problem with dry seeded HYV crops:uneve n maturity and staggered harvests.Becaus e of the dry spell inMay * after part of the seeds germinated, rice plants inon e and the same field differed 3week s inmaturity , causing severeproblems ! with harvesting. Some farmers had tous e the old fingerblade knife for panicle harvesting,wherea s others employed spot harvesting. Because of the photo-sensitivity of BE-3,th e problem of uneven maturity following uneven germination does not occur in thiscrop . Uneven germination was due to the rather rough way of seedbed preparation, simply using ploughs as usually employed with BE-3 crops, causing seeds to be positioned at different depths in the1 soil and leaving large soil clods preventing the light rains to penetrate underneath. Based on thisexperience , farmers started £o employ a better type of seedbed preparation the following year, consisting of two ploughings followed by a harrowing.Th e average yield of harvested dry seeded HYV cropswa saroun d 2.3 tons/ha, ranging from 1.0 tons/ha to 3.3 tons/ha.Poo r yields were especially due tonon-controlle d weed infestations resulting fro* non-availability of labour to carry out the weeding operations, whereas good yieldswer e obtained with crops thatwer e pulled and replanted. 201 After the harvest of the first rice crop (formos t farmers in the second week of September), soilmoistur e conditions did not allow land preparation for the second crop.Utterl y frustrated, farmers had towai t until the firstwee k of October before they could start ploughing their fields.Th e first farmer harvesting dry seeded rice had towai t onemont h after the harvest of the first crop before he could start preparing the land for the second crop. Obviously, due to thisdr y period, the benefit of advancing the establishment date of the second rice crop through dry seeding the first crop entirely disappeared.

However,a s depicted in Figure 7.3.1, for this particular year the establishment of two rice crops on rainfed fields would not have been been possible without the use of dry seeding.O f the total area of double rice crops,mor e thanhal f was preceded by a dry seeded HYV crop.Th e remaining area of double rice cropswas ,fo r a large part,establishe d in partially irrigated fields.O f the total area planned with second rice crops following wet seeded rice asa first crop,40 %wa s actually not established atall .

Similar to the 1977season ,lat e season rainfall conditions were disastrous to crop development.Fro m the second half of October - thus right after the fields had been drained for thewe t seeding of rice - until the last week of November hardly any rainfall occurred. Roughly 60%o f theare a planted to second rice crops failed due to drought stress during the vegetative growth stage. Only crops in partially irrigated areas survived this drought period, yielding 1.8 tons/ha onaverage .

Planning 1980-81 Despite the poor results obtained in the previous season with the

Cumulativeare aestablishe d(2n dric ecrop ) (%) 100 wetseede d wetseede d rainfed -* irrigated 80 - dry seeded /

SO

40 *

20

40 41 42 43 44 45 46 47 Weeknumbe r Fig.7.3. 1 Cumulativeare aestablishe d u/ithsecon d ricecrop s byweek ;croppin g season1979-8 0(Wee k 1=1-7 Jan.) 202 DSR-WSRpattern ,fo rth eseaso no f1980-8 1a somewha tlarge rare a wasplanne dt ob edoubl ecroppe dwit hthi spatter ncompare d toth e plannedare ai nth epreviou sseason .Als oth epercentag eo f farmersplannin gt ohav edoubl eric ecroppin gwit hDSR-WS R slightlyincrease d from33 %i n197 9t o38 %i n1980 .However , compared toth eactua larea splante dt odr yseede dHYV si n1979, , therewa sa reductio ni nbot hth eare aan dth enumbe ro ffarmers . Theare adecline dwit h12% ,wherea sth epercentag eo ffarmer s decreasedwit h16% .

Incontras tt oth emor eo rles sstabl eare aplanne d tob ecroppe d withDSR-WSR ,th eare aplanne dt ob edoubl ecroppe dwit hWSR-WS R showsa dramati cincreas eo f58 %compare d toth eplanne dare ai n 1979,wherea sth epercentag eo ffarmer splannin gt ohav esuc ha patternincrease d from42 %t o67% .Compare d toth eactua lare a planted toWSR-WS Ri n 1979,th eincreas ewa seve nmor edramatic , from9 %o fth etota lric eare ai n197 9t o24 %i n1980 ,wherea stjh e percentageo ffarmer sincrease d from29 %i n197 9t o67 %i n1980 ,

Thesefigure sindicat ea stron gdeterminatio namon gfarmer st o continuewit hdoubl eric ecroppin gbu ta reserve dattitud etoward s dryseede dric ecropping .Thi sdeterminatio nresulte dno ti nth e leastpar tfro mth elo whousehol d incomesrealize di nth epreviou s season.A sdiscusse di nSectio n6.3.3 ,th edeb tpositio no fmos t householdsha dsubstantiall y increased.Household ssimpl yneede da goodleve lo fcro pincom efo reconomi csurviva lan dhope dfo ra favourablerainfal lseason .However ,i ti sstil linterestin gt o notetha ti nspit eo fth egenerall y poorresult sobtaine dwit h doubleric ecroppin gi n1979 ,a large rnumbe ro ffarmer s apparentlyevaluate dth efeasibilit yan dprofitabilit yo fdoubl e ricecroppin gmor epositively .Interview sreveale dth estron g demonstrationeffec to fa fe wsuccessfu ldoubl eric ecrop sdurin g apoo rrainfal lyear .Th emajorit yo ffarmer sattribute dth e previousyear' sfailur et oth eexceptionall yunfavourabl erainfal l patternan dno tt oth etechnica linfeasibilit yo fdoubl eric e croppinggive nnorma lrainfal lconditions .Mor eimportantly , becauseo fth epoo rgrowin gcondition si n197 9farmer sbecam e awareo fth edrough ttoleranc eo fth eIR3 6variety .A numbe ro f dryseede dIR3 6crop sha dsuccessfull y surviveda sustaine d droughtperio ddurin gth eseedlin gan dearl yvegetativ egrowt h stage,wherea sa numbe ro fsecon dwe tseede dIR3 6crop sstil lha d reasonableyield sdespit ever ydr ysoi lcondition sdurin gth elat e reproductivestage .

Thegenera limpressio ngaine dfro mdiscussion swit hfarmer swa s thatthe yha dbecom emor econfiden ti nth efeasibilit yo fa WSR-^ - WSRcroppin gpatter no nwaterwa y fields.Althoug hmos tfarmer s agreedtha tdr yseedin gric ewa sa soun d strategyt oobtai n successfulsecon dric ecrops ,th erisk sassociate dwit hdr yseede d riceclearl youtweighe d thebenefit sexpecte d fromthi scro pi n termso fadvancin gth eplantin gdat eo fth esecon dcro pt oa n earlierdate .Further ,mos tfarmer s(especiall y thosewh odi dpla n tohav edr yseede drice )ha dencountere d severeproblem swit hcro p 203 management.Heav ylabou rinput swer erequire d forweedin gan d replantingth edr yseede dric ecrop sa tth etim elan dpreparatio n andestablishmen to fothe rric ecrop sha dth ehighes tpriority .I n 1979,i twa sgenerall ydifficul tt ofin dwag elabou rt ocarr you t suchtasks .

Fora considerabl enumbe ro fhouseholds ,anothe rimportan treaso n forno tplannin gdr yseede dric ewa stha tthe ysimpl ycoul dno t riskth esee dlos sassociate dwit hdr yseede dric ebecaus eo fa n extremely tightric estoc ksituatio nan da hig hdeb tposition .Fo r similarreasons ,a larg enumbe ro ffarmer sgav ehig hpriorit yt o cornplanting si nFebruar yan dMarc h- facilitate d bya nunusua l occurrenceo fscattere d rainfalli nthes emonth s- instea do f leavingth efiel d vacantfo rdr yseede dric ei nApri lo rMay . Moreover,farmer sobserve da hig hleve lo fwee dinfestatio n (grasses)i nthei rcor ncrops ,probabl ycause d byth eextende d periodso fnon-floode d fieldsdurin gth epreviou sseason .

Management1980-8 1 Bothpre-monsoo nrainfal lcondition san dfiel dcondition si nth e 1980seaso ndiffere d substantially fromthos ei nth epreviou s season.I ncontras tt o1979 ,a larg enumbe ro flowlan d fieldswer e cultivatedwit hcor ncrops .A nunusuall yheav yrainfal la tth een d ofMarc hallowe d landpreparatio ni nearl yApril ,afte rth eto p soilha dbee nsufficientl ydrie dout .A fe wfarmer s- al lo fth e middle-aged surplushousehol d category- mad eus eo fthi s conditiont oestablis ha palay-an RHY Vcrop .A fe wothe rfarmer s- allo fth emiddle-age d householdcategor y- ploughe dth efiel din - betweenth estandin gcor ncro pi npreparatio no fa samar aHY Vcro p inMay .However ,i ncontras tt o197 9season ,th epre-monsoo n rainfallpatter ni n198 0di dno tfavou rth eestablishmen to f samararic eseedings .Fro mth ebeginnin go fApri lunti lth elas t weeko fMay ,n osignifican trainfal loccurred .Whe nfinall ya numbero fday so fmil drainfal loccurre da tth een do fMay , farmersplannin gt ohav edr yseede dric estil lestablishe dthi s cropi nth efirs tan dsecon dwee ko fJune .The yexceede dth e earlierindicate d cut-offdat efo rdr yseede dric eestablishmen t withtw ot othre eweeks ,thereb ytakin ga substantia lris ko fa n earlycro pfailur edu et oprematur efloodin go fth efield . However,suc ha conditio ndi dno toccu ran drainfal lcondition s afteremergenc ewer efavourabl efo rfurthe rcro pdevelopment .Th e harvesto fth edr yseede dric ecrop soccurre di nth ethir dwee ko f September.Th epalay-an gric ecrop swer eharveste da tth esam e timea sth esamar acrops .Althoug hth eforme rcrop swer e established onean dhal fmont hearlier ,insufficien trainfal l caused seedlingemergenc ea tth esam etim ea sth elatte rtyp eo f crops.Yield sobtaine dwit hth edr yseede dric ecrop swer e excellentwit ha naverag eyiel do f3. 9tons/ha ,70 %highe rtha n theaverag eyiel dobtaine d in1979 .Lowes tyield swer ea shig ha s 2.5tons/ha ,wherea sth ehighes tyiel dreache d6. 0tons/ha .

Mid-seasonrainfal lcondition swer ever yfavourabl efo rth e establishmento fsecon dric ecrops .Rainfal lcondition sallowe d 204 wetseedin go fric efro mth een do fSeptembe rthroughou tth emortt h ofOctober .Thus ,righ tafte rth eharves to fth efirs tdr yseede d ricecrop slan dpreparatio nfo rth esecon dcro pcoul dstart . However,becaus eo fth elarg eincreas ei nth eare ao fsecon dric e cropplanting s- roughl ytwic eth eare ao fsecon dric ecrop s established inth epreviou syea r- a numbe ro ffarmer sencountere d severeproblem si nfindin g labourfo rlan dpreparation .I nfact , farmersha dt ooffe rdifferen tkind so fincentive s(e.g .highe r wagesi nth efor mo fric epayments ,goo dmeal san dampl edrinks ) toattrac tsufficien tlabou r- fo ra larg epar tfro moutsid eth e village- fo rtimel ycro pestablishment .

Alsolat eseaso ngrowin gcondition swer ever yfavourabl efo rcro p development.Yield so fsecon dric ecrop sreache da hig haverag e levelo faroun d 2.3tons/ha ,rangin gfro m1. 2tons/h afo rth elat e plantingst oa hig h4. 0tons/h afo rearl yplanting sfollowin gdr y seededrice .Fo ra partiall y irrigatedric efield ,a yiel do f 5.2tons/h awa srecorded .

Planning1981-8 2 Thisseaso nshow sa shar pincreas ei nth eare aplanne d tob e doublecroppe dwit hth eDSR-WS Rpattern .Th eare aincrease dwit h 75%,wherea sth epercentag eo ffarmer sincrease d from38 %t o61% . Aswil lb ediscusse d inSectio n7.3.2 ,thi sincreas ei ndr yseede d areamainl ycam efro mnon-surplu shouseholds .Th eyoun gnon - surplushousehold sagai nplanne dt ohav ea DSR-WS Rpatter no na smallportio no fthei rfield s(15%) ,wherea sth emiddle-age dnon - surplushoushold smor etha ndouble d theare aunde rthi spattern [ from19 %i n198 0t o46 %i n1981 .Th eare aplanne d tob egrow nt oa WSR-WSRpatter nappear st ostabilize .Bot hth enumbe ro ffarmer s andth eare adecrease d somewhat,especiall ywhe ncompare dt oth e actualare aan dactua lnumbe ro ffarmer sgrowin gthi spatter nii » 1980.Thi slevellin gof findicate stha tal lirrigate d fieldsan d favourablewaterwa yparcel sar eno wdefinitel yplanne dt ob e croppedwit ha WSR-WS Rric epattern .

Management1981-8 2 Pre-monsoonrainfal lcondition si n198 1wer ever ysimila rt oth e 1980season ,wit hth eexceptio ntha ti traine ddurin gth ethir d weeko fApril .Thi srainfal lwa sjus tenoug ht oallo wlan d preparationfo rpalav-an grice ,provide dth efiel dha dbee n ploughedi nJanuary .A fe wfarmer simmediatel yestablishe dthis i crop,wherea sth emajorit yo ffarmer splannin gt ohav edr yseede d riceploughe d thefiel dfo rth esecon dtim ebu twaite dfo rth e rainsi nMa yt oestablis ha samar aric ecrop .I nMay ,i trained ! severaltime sbu tth eamoun tan dintensit ywer eno tenoug ht o allowfo rth epreparatio no fsamar aric eseedlings .Instea do f waitingfo rsufficien trainfal la sthe ydi di nth epreviou s season,a substantia lnumbe ro ffarmer sstil lemploye dth epalay - angestablishmen tmetho ddurin gth esecon dhal fo fMay .I ndoin g so,farmer sagai nexceede da nearlie restablishe dcut-of fdate , i.e.,n oestablishmen to fpalay-an gric eafte rth een do fApril sA heavyshowe rdurin gth elas tda yo fMa yfinall yallowe d land i 205 preparation (bungak)o nfield stha tha dno tye tbee nploughe d duringth edr yseason .Afte rthes efield sha dsufficientl ydrie d out, thesecon dploughin gwa scarrie dou timmediatel y followedb y aharrowin gan dsamar aseeding .

Bothth efarmer' sris ktakin gi nestablishin g latepalay-an gcrop s andth eattempt so ffarmer st oestablis hsamar aric ecrop sunde r sub-optimalsoi lcondition si nJun e(norma lcut-of fdat ethir d weeko fMa ybecaus eo fth eris ko fprematur eflooding) ,show stha t farmerswer ever ydetermine d tohav ea doubl eric ecro pan ddi d anythingthe ycoul dt oenhanc eth esucces so fthi spattern . Despitepoo rcondition sfo rdr yseede dric ecro pestablishment , almostal lfarmer splannin gt ohav eth eDSR-WS Rpatter nactuall y dids oi na nare aslightl yles stha nplanne d (seeTabl e7.3.1) .I t furtherindicate stha tth edr yseede dric etechnolog yi semploye d muchmor eflexibl eb yfarmer stha nthe ythemselve sindicate di n 1979. Thisseaso nals oshow sth edramati cimpac tdr yseedin gric e hado nadvancin gth eplantin gdat eo fth efirs tric ecrop .Figur e 7.3.2 showstha twithou tthi scro pestablishmen ttechnique , plantingo fric ecrop si nrainfe dfield scoul dno thav estarte d beforeth ethir dwee ko fJuly .Becaus eo fth eus eo fth edr y seedingtechnique ,mor etha nhal fo fth eric eare a(excludin g sideslopean dirrigate d fields)ha dactuall y beenplante db ytha t date!

Asever ewee dinfestatio ndevelope di nmos tdr yseede dric ecrop s duet oth eoccurrenc eo fa nintermitten ttyp eo frainfal lpatter n locallyknow na sburo-balangtang ,meanin g 'iti scontinuousl y rainingbu ti ti sno tenoug hfo rstandin gwate ri nth efield' .

Cumulative percent area Rainfall (weekly total)

TOY JUNE JULY AUGUST " SEPT

Figure 7.3.2 Cumulative area established uith first rice cropsb yuiee k(1981-82 ) 206 Similart o1979 ,a numbe ro ffield sha dt ob epulle dan d replanted.Fo rth efirs ttime ,farmer sstarte dt ous esmal ltooth - pikedhandharrow st ocontro lweeds .Thi sweedin gmetho d isa n adaptationo fth eearlie rdescribe dweedin gtechniqu euse di ndf y seededBE- 3crops .Despit eth ewee dproblem ,yield sobtaine dwi£ h dryseede dric ei nthi syea rwer ea sgoo da si nth epreviou syear . Againaverag eyield swer earoun d3. 9tons/ha ,rangin gfro m 2.5tons/h at o4. 7tons/ha .

Similart o1980 ,rainfal lfacilitate d theestablishmen to fsecon d ricecrop srigh tafte rharvestin gth efirs tcrop .However ,fo rth e firsttime ,farmer sencountere d problemsi nfindin glabou rfo rth e popularan drelativel ywell-pai dric eharvestin gan dric ehaulin g activitydurin gmid-October .Thi sresulte d fromth esimultaneou s harvestso fbot hth elarg eare aestablishe d withdr yseede dric e crops-tha tdu et olat erainfal lgerminate d late- an dearl ywe t seededric ecrops .A sshow ni nFigur e7.3.2 ,a larg eare ao f secondric ecrop s(58% )wa sestablishe d ina perio do ftw oweeks . Theproble mi nfindin glabou rfo rhaulin gric ean dlan d preparationo fth esecon dcro pwa sfurthe raggravate d bya sever e cashshortag etha toccurre di n thevillag edu et olo wdagma yprice san dth elac ko fbuyer sfo r thenewl yharveste d rice (3).Fo rhousehold swit ha limite dsuppl y offamil ylabour ,bot hproblem saffecte d timelyestablishmen to f secondric ecrops .Simila rt o1980 ,lat eseaso nrainfal lwa s favourablefo rcro pdevelopment .Secon dcro pyield swer esomewha t lowercompare d toth epreviou sseaso nwit ha naverag eo f 2tons/ha ,rangin gfro m0. 4tons/h at o4. 4tons/ha .

Planning1982-8 3 Theadoptio no fdoubl eric ecroppin gappear st oconsolidat ei n^h e seasono f1982-83 .Th eare aplanne dfo rWSR-WS Ragai nslightl y decreased infavou ro fa mino rincreas ei nth eare aplanne dfo r DSR-WSR.Th etota lare aplanne d tob edouble dcroppe dwit hric e cropsappear st ostabiliz earoun da leve lo fon ehal fo fth etota l ricearea .O fthi sarea ,th elarges tpar t (55%)i splanne dt ob e grownt oa DSR-WS Rpattern .Th etota lnumbe ro ffarmer splannin g tohav edoubl eric ecroppin go nsom epar to fthei rlan dals o stabilizes.Simila rt o1981 ,87 %o fth efarmer splan st ogro wa doubleric ecrop ,o fwhic h35 %opt sfo ra DSR-WS Rpattern ,30 %fo r aWSR-WS Rpattern ,an dth eremainde rfo ra combinatio no fthes e patterns.

7.3.2 Riskan dadoptio n Fromth eabov edescriptio no fth eadoptio nproces so fdoubl eric e cropping,i twil lb eclea rthat ,simila rt oagronomi cresearch, ; experimentationi sa majo rtoo lo ffarmer st oreduc euncertaint y regardingth eperformanc eo fa technolog ywit hregar dt oit s performancei nspecifi cfield san dit soveral lfi ti nth ecroppin g system.Onc etechnolog yha sbee ni nus efo rsom etime ,farmer s graduallyge ta bette rnotio no fth eprofitabilit yan drisk s involvedi nth etechnolog yan dwil lb ebette requippe d toevaluat e 207 theadvantage san ddisadvantage so factivitie sincludin gth erisk s attached.I nth epreviou ssection ,i twa sindicate d thata tleas t anumbe ro ffarmer sar equit eabl eexperimentors .I ti sa fallac y tothin ktha tfarmer sonl yobtai non eexperimen tpe rseason ,an d thatconsequentl y farmers'experimentatio ni sa lon gtim eaffair . Theheterogeneit y oflan dan dwate rresource si nthi senvironment , togetherwit hrainfal lvariability ,allow smultipl eobservation s ina rathe rshor ttim espan .Technologie sfo rwhic hth einnovatio n riski slo war edistinguishe d fromhig hinnovatio nris k technologiesi ntha tthe yallo wexperimentatio no na smal lscale . Theabilit y toexperimen twit hne wtechnolog ywil lprimaril y dependo nwhethe rth etechnolog yrequire scas houtlay sand/o r whetheri ti sdivisible .Thus ,a distinctio nshoul db emad e betweenne wtechnologie stha tar ebulk yan drequir erelativel y largecas houtlay s(e.g .tractors )an dtechnologie stha td ono t (e.g.improve d seeds).Wit hrespec tt oth eformer ,wealt hstatu s islikel yt ob ea primar ydeterminan tfo rdifference si n innovationan dadoptio nbehaviou rbecaus epoo rhousehold ssimpl y lackth efinancia lmean so racces st ocredi tsource st oventur e intosuc hactivities .Fo rexample ,investment si nth elimite d numbero fric emills ,thresher san dric eblower si nth evillag e wereal lmad eb yth eriches tgrou po ffarmers .

Asecon d factordeterminin ginnovatio nris ki swhethe rne w technologieslin ku pwit hth eknowledg ebas eo ffarmers .Perceive d innovationrisk swil lb ehighl yreduce d incas efarmer sar e capableo fassessin gth efeasibilit yo fne wtechnologie so nth e basiso fthei rexperienc ewit hfactor sdirectl yinfluencin gth e performanceo fth etechnology .I nthi srespect ,th eabov e describedcroppin gpatter ntechnolog ydiffer sentirel yfro m technologiessuc ha sartificia lfertilizer so rpesticides .I n perceiving thepossibilit yo fne wcroppin gpatterns ,farmer sca n drawupo nthei rintimat eknowledg econcernin grainfal lpattern s andth emicro-ecolog yo ffields .Base do nthi sknowledge ,the yar e ablet ointerpre tth eresult so fexperiment sconducte dwit hthes e patterns.A sdiscusse dabove ,becaus eo fthi sknowledge ,farmer s wereno tdejecte d afterth einitia lpoo rresult swit hth eDSR-WS R patternan ddi dno tconclud etha tth etechnolog ywa sinfeasible . Although,a swil lb ediscusse di nChapte r8 ,farmer sals o experimentwit hfertilizer sthe yessentiall ylac kth ebasi c knowledgeregardin gfertilize rtechnolog yt oadequatel yinterpre t theresult so fsuc hexperiments .Despit eth efarmers 'lon g experiencewit hfertilize rtechnolog ya swel la sthei rintuitiv e graspo fho wt ous eit ,th ebasi celement so fthi stechnolog yar e notpar to fth efarmers 'knowledg ebase :i nessence ,farmer sus e itbu td ono tunderstan di t(se eals oGoodel le tal^ ,1982) .Thi s mayno tb ea proble ma slon ga sth etechnolog ywork san di ssimpl e enought ob eapplied .However ,i fth eperformanc eo fth e technologychange sfo rwhateve rreason ,farmer sfac ea seriou s problemi nterm so fadaptin gth etechnolog yt osuc ha ne w situation. 208

Percent area double rice crop (*) Youngnon-surplu s 60 households

40

20 .

—r— 1 -r r 1978 1979 1980 1981 1982

60 Middle-aged non-surplus households

40

20 0SR - USR

—i 1 l —I— 1978 1979 1980 1981 1982

Young surplus 60 households

40 .

20 .

Middle-aged surplus 60 - households

40 -

20

—t 1 1 1 1— 1978 1979 1980 1981 1982

Old surplus 60 Fig.7.3. 3 Percentage ofdoubl eric e households cropso f totalric earea ;averag e perhousehol d category (1978-82);• 40 1982i sare a planned)

20

—I 1 —I 1 1 1978 1979 1980 1981 1982 209 Adoptionpatter n Figure7.3. 3 showsth eare adoubl eric ecroppin ga spercentag eo f thetota lric eare afo rth evariou shousehol d categoriesfo rth e periodo f1978-82 ,excludin gpartiall yirrigate d fields.Excep t forth elas tyear ,thes efigure srepresen trealize d doublecroppe d areas,irrespectiv eo fsecon dcro pfailure .Becaus eo fth elarg e numbero fdr yseede dcro pfailure si n1979 ,als oth etota lare a established withdr yseede dHY Vcrop si sshow nfo rtha tyea ri n ordert oindicat eth eintende d areat ob edoubl ecroppe dwit hDSR - WSR.

Theconsisten tdifference si nth erat eo fadoptio no fdoubl eric e croppingbetwee nth eyoun gan dmiddle-age d householdsi sstriking . Differencesbetwee nthes ecategorie simmediatel y starta tth e earlystag eo fth eadoptio nproces san dremai nthroughou tth e observationperiod .I n1978 ,th emiddle-age d non-surplus householdscultivate d thelarges tare aunde rdoubl eric ecropping , onaverag eroughl y30 %o fthei rtota lric earea ,followe d byth e middle-aged surplushousehold swit h23% .Bot hyoun ghousehol d categoriessho wa lo wleve lo fdoubl eric ecroppin gwit h8 %o fth e totalric earea .O fth edoubl eric earea ,th emiddle-age d surplus householdshav eroughl yhal fplante dt oth ene wDSR-WS Rpattern , compared to37 %o fth emiddle-age dnon-surplu shouseholds .O fbot h theyoun ghousehol dcategorie salmos tth eentir eare ao fdoubl e ricecrop sconsiste d ofth eWSR-WS Rpattern .Als oth eol d householdcategor yha sa smal lare aunde rdoubl eric ecrop ssom e parto fwhic hwit hth eDSR-WS Rpattern .I tshoul db enote dtha t thechoic efo ra dr yseede dHY Vcro pa sfirs tric ecro pi na doubleric ecroppin gstrateg yi sindicativ eo fth efarmers ' determination toai ma ta doubl eric ecrop .

In1979 ,th eare aunde rDSR-WS Rincrease d foral lhousehol d categories.Als obot hyoun ghousehol dcategorie shav esom eare a underDSR-WSR ,wit hth enon-surplu shousehold shavin gth elarges t area.Whe nth efaile ddr yseede dHY Vcrop sar econsidere d asbein g intended forDSR-WS Rcroppin gan dadde dt othi scroppin gpatter n (indicated inFigur e7.3. 3 bya nasterix) ,th eare amean tt ob e planted toDSR-WS Rsubstantiall y increasesfo rth emiddle-age dan d oldhouseholds .

Whencompare d toth eare aintende d tob edoubl ecroppe dwit hDSR - WSR (i.e.,includin gearl yfailure so fdr yseede dHY Vcrops) ,198 0 showsa declin ei ndoubl ecroppin gwit hDSR-WS R foral lhousehol d categories.Bot hyoun ghousehol dcategorie sd ono tplan tan ydr y seededHY Vcrop .Th emiddle-age d andol dcategorie ssho wa sligh t decline.Du et oth efavourabl erainfal lpatter nfo rsecon dric e cropestablishment ,th eare aplante dt odoubl eric ecrop s increaseso rremain sstabl efo ral lhousehol dcategorie sbecaus e ofth elarge rare aplante d toth eWSR-WS Rpattern .

Theseaso no f198 1show sa substantia lincreas ei nDSR-WS R croppingfo rnon-surplu shouseholds ,apparentl y supported bya n improved risktakin gcapacit yresultin gfro mth egoo dproductio n 210 seasono f1980 .Especiall yth emiddle-age dnon-surplu shousehold s showa shar pincreas ei nth eare aplante dt oDSR-WSR ,fro m17 %o f thetota lric eare ai n198 0t o43 %(! ) in1981 .I nfact , considering thedeclin ei nth eare ath efollowin gyear ,i tappear s thatthes ehousehold smove dto ofas ti nadoptin g theDSR-WS R l pattern.Excep tfo rth eol dhouseholds ,als oth eothe rhousehol d categoriessho wa nincreas ei nDSR-WS Rcroppin gi n1981 .Th eol d household categoryshow sa shar pincreas ei nth eare acultivate d withth eWSR-WS Rpattern .

For 1982,especiall yth emiddle-age d surplushousehold spla na substantialexpansio no fth eare aunde rDSR-WS Rcropping ,largel y atth eexpens eo fth eare aunde rWSR-WSR ,wherea sth eopposit e occursfo rth emiddle-age d non-surplushouseholds .Fo rth eothe r household categories,th eare aDSR-WS Reithe rremain sstabl eo r increasessomewhat .

Sincelan dtyp ei sa majo rdeterminan to fth efeasibilit yan d profitability ofdoubl eric ecropping ,Figur e7.3. 4 showsth e adoptionpatter no fhousehol dcategorie sfo rtw omajo rlan duni t groupingsfo rwhic hdoubl eric ecroppin gi sfeasibil ebu trisky , i.e.,rainfe d andwaterwa y fields,excludin gth edr ysideslop ean d partiallyirrigate d fields.Th eadoptio npatter nb ylan duni t groupclearl yshow sth efarmers 'preferenc efo rlocatin gdoubl e ricecroppin gpattern so nwaterwa yfields .A sca nb eexpected , waterwayfield ssho wa mixtur eo fDSR-WS Ran dWSR-WS Rcroppin g; patterns,wherea sth eDSR-WS Rpatter ndominate so nth erainfe d fields.A sfirs thousehol d category,middle-age d non-surplus i householdsreac ha ful lcoverag ewit hdoubl eric ecroppin go n waterwayfields .Fro m 1980onwards ,i norde rt oincreas eth erat e ofdoubl eric ecroppin go nthei rfarms ,thes ehousehold swer e forcedt oincreas eth erat eo fdoubl eric ecroppin gwit hth eDSR - WSRpatter no nth emor erisk yrainfe d fields.I n1981 ,als oth e middle-aged surplushousehol dcategor yalmos treache dful l coveragewit hdoubl eric ecroppin go nwaterwa yfield san dwa s forcedt omov etoward sth erainfe d fields.Bot hth eyoun gan dol d householdcategorie sstil lhav eampl eroo mt oincreas eth erat eo f doubleric ecroppin go nwaterwa yfields .

Theoveral lconclusio ntha tca nb ederive d fromth eabov eadoptio n patterni stha tbot hmiddle-age dhousehol dcategorie splaye da majorrol ei nintroducin g theDSR-WS Rpatter ni nth evillag ean d continued tohav eth elarges tare aplante d tothi spatter ndurin g thestud yperiod .Despit ethei rlo wris ktakin gcapability ,th e non-surplushousehold si nthi scategor y showeda considerabl e perseverancei nincreasin g theare aunde rDSR-WS Ra sshow nb yth e largeare aunde rthi spatter ni n1981 .I nshar pcontrast ,bot h younghousehol dcategorie ssho wlo wadoptio nrate sthroughou tth e studyperiod .However ,agai nth enon-surplu shousehold sappea rt o beth emos tseriou si nimplementin g doubleric ecroppin ga s indicated byth ecomparativel y largeare aunde rdoubl eric e croppingwit hdr yseede dric ea sfirs tcrop .Th eol dhousehol d categorytake su pa positio ni nbetween .Simila rt oth emiddle - 211

youngsurplu shousehold s BO* youngnon-surplu shousehold s

60*

40* 20* n I J .1 -n y n„B 1978 1978 1980 1981

80* middle-agednon - middle-aged surplus surplushousehold s households 60* .

*0*

20* 1 LliJ Jl I •! •! nl / \ rainfed waterway

old surplushousehold s

I I wetseede d- we tseede d rice

^M dryseede d- we tseede d rice

nB n LEIJ 1978 1979 1980 1981

Figure7.3. 4 Percentagedoubl eric ecrop si nrainfe dan dwaterwa y fields;averag epe rhousehol dcategor y(1978-82 )

aged households,the y showa gradual increase in the area under DSR-WSR and WSR-WSR, but at a substantially lower pace.

What are the underlying variables causing this sharp difference in adoption behaviour? Adoption studies have historically stressed the importance of wealth asa majo r factor determining differences in adoption behaviour.However ,a s indicated byDeWal t and DeWalt (1980), one should be careful toassum e a direct relationship between wealth and innovation adoption.The y discuss four different theoretical models that haveappeare d in the literature regarding the relationship between these two variables.Th e first model asserts a strong similarity in adoption behaviour among small farmers.Th e asumption onwhic h this so-called homogeneity model is based isa n apparent homogeneity in socio-economic status among relatively small agricultural producers.I tals o follows from the earlier mentioned studies that viewed small farmers as uniformally conservative and resistant to change (e.g.Foster , 1965; Rogers, 1969). From numerous studiesan d again supported by 212 findingsfro mthi sstudy ,i twil lb eclea rtha tincom ean dwealt h differences- eve nwithi na napparentl yhomogeneou sgrou po fsmal l farmersa spresentl y studied- ar esubstantial .Further ,th eabov e descriptiono fth eadoptio nproces sunderline sth efac ttha t conservatism orresistanc et ochang ecanno tb econsidere da generalbehaviou rmod eo fsmal lfarmers . i

Thesecon dmode lpostulate sa simpl epositiv erelationshi pbetwee n wealthan dadoptio nrates .Thi sso-calle d linearmode lassert s i thatwithi nan ycommunit yth ewealthie rhousehold sar elikel yt o beth efirst ,o rprincipal ,adopter so fne wtechnology .The yhav e betteracces st oinformatio nan dhav ea highe reconomi cris k takingcapability .Thi smode li sintuitivel yth emos tappealing; . However,th eabov eadoptio npatter nsupport sneithe rth evie wtha t wealthdetermine sth erat ea twhic hinnovation sar eaccepted ,no r theide atha texperimentatio ni sa prerogativ eo frelativel y wealthy farmers.Th eadoptio npatter nclearl yshow stha tver yppp r householdsar ewillin gan dd otak einnovatio nrisks .Despit ethfei r limitedris ktakin gcapability ,th emiddle-age dnon-surplu s householdswer ever yactiv ei nth einitia lstag eo fexperimentin g withdr yseede dHY Vcrop san dthu scarrie da larg epar to fth e innovationrisk .

Apartfro mwealth ,th ethir dmode linclude sth enotio no fsocia l risktaking .Thi sso-calle dmiddle-clas sconservatis mmode l assertstha tpeopl eo fver ylo wwealt hstatu san dpeopl eo fver y highwealt hstatu sar elikel yt ob eth emai nan dfirs tadopters )o f innovationsbecaus ethes egroup sd ono tpu tthei rsocia lstatus ,i n thecommunit ya tris kwhe nadoptin ginnovations .I ncontrast , middle-classgroup sten dt obehav ei nconformit ywit hestablishe d behaviourpattern si norde rt osafeguar d theirpresen tsocia lan d economicstatus .I nothe rwords ,th esocia lris ktakin gcapabilit y ofthi slatte rgrou pi smuc hsmalle rcompare d tohig han dlo w statusgroups .Th evalidit yo fthi smode li sdifficul tt otes t i withth epresen tdat ase tbecaus e- fo rreason smentione dearlie r- thesmal lgrou po fric hfarmer si nth evillag ei sno trepresente d inth esample .However ,th emiddle-age d surplushousehold sca nb e considered torepresen twha tcoul db ecalle dth emiddle-clas soi f farmersi nthi scommunity .Fro mth eadoptio npatter no fthi s group,i ti sclea rtha tthei rbehaviou ri sno ti nconformit ywit h thismodel .Bot hlo wan dmiddle-clas sfarmer sar eamon gth eearl y adopterso fth einnovation .I nfact ,th egrou pwit hth ehighes t percapit aincome ,i.e. ,th eyoun gsurplu shouseholds ,ar eth e slowestadopters .Further ,simila rt oth efindin gb yDeWal tan d DeWaltwit hrespec tt ofertilize radoptio nrates ,th eadoptio no f thene wrisk yDSR-WS Rtechnolog yb ypoo rhousehold si sno tsimpl y behaviouralidiosyncrasy ,i.e .lo wstatu speopl ebehavin ga s nonconformists:i ti sa matte ro feconomi csurvival .

Thefourth ,so-calle dmodifie dmiddle-clas sconservatis mmode l combinesth eidea so fth elinea ran dmiddle-clas sconservatis m model.I tha sbee nadvance db yCancia n (1967)an dteste dfo r severaldifferen tsituation s(Cancian ,1980) .Cancian' smode l 213 followsth elinea rmode li nregardin gth elowes teconomi cclas sa s unablet oinves ti nne wopportunities ,wherea sth ewealthies t groupi smos tlikel yt oadop tinnovation sbecaus eo fthei rsecur e economicposition .Fo rth emiddle-clas sgroup ,Cancia n distinguishesbetwee na nuppe ran da lowe rrank .Th eforme rgrou p showsinnovatio nbehaviou ri nconformit ywit hth emiddle-clas s conservatismmodel ,wherea sth elatte rgrou pi swillin gt otak e risksi nadoptio nbehaviou rbecaus eo fa greate rdesir et oupwar d mobility.Fo rsimila rreason sa sdiscusse d forth emiddle-clas s conservatismmodel ,i ti sdifficul tt otes tth evalidit yo fthi s model,bu ti ti sals ounlikel yt ob eapplicabl et oth epresen t case.

Apartfro mth eweaknes so fth eabov eadoptio ntheorie si nno t differentiating betweentype so finnovation sbase do ndifference s ininnovatio nrisks ,a critica lvariabl elackin gi nth eabov e modelsi sth elif ecycl estag eo fth ehousehold .Thi svariabl e doesno tonl ydetermin eth elabou ravailabilit y andincom e requirementso fth ehouseholds ,i tma yals oexplai ncyclica l dynamicsi nadoptio nbehaviour ,i.e. ,th eide atha twhe n householdsmov et oa ne wlif ecycl estag ethe ygraduall ychang e theirmanagemen torientatio nan dmanagemen tpattern .

Theabov eadoptio npatter nclearl yindicate sunderlyin g differencesi nmanagemen tpatter nbetwee nhousehold si ndifferen t lifecycl egroups .Household si nth efirs tlif ecycl estag e(i.e . theyoun ghousehol dcategories )ten dt ochoos efo rth erelativel y easyt omanag esingl erice-base dcroppin gpattern smainl y consisting ofBE- 3cro pactivities .Fo rth esurplu shousehold si n thiscategory ,thi si sprimaril ydu et othei rlimite davailabilit y offamil ylabour .The yconside rth eris ko fno tbein gabl et o controla nearl ywee dinfestatio ni ndr yseede dHY Vcrop sto ohig h becauseo fth edifficultie sthe yexpec ti nfindin gwag elabou r whensuc ha situatio noccurs .I neffect ,thei r'fire-fightin g capability'- th ecapacit yt otimel yremed ypoo rcro pcondition s- isinsufficien tt oallo wDSR-WS Rcropping .Moreover ,th eadvantag e ofearl yric ecro pestablishmen tdoe sno tappea lt othe mbecaus e theyexpec tsimila rproblem si nfindin glabou rfo rsecon dcro p establishmentan dthu sar eno tcertai nwhethe rthe ywil lb eabl e totimel yestablis ha secon dcrop .Also ,sinc ethes eyoun gsurplu s householdshav emor etha nenoug hric eproductio ncapacit ywit h singleBE- 3ric ecrops ,the yd ono thav et otak eth epotentia l managementrisk sassociate dwit hDSR-WS Rcropping .Instea do f takingwha tthe ycal l 'thehassl eo fdoubl eric ecropping 'the y investmuc ho fthei row nlabou ri nuplan dcro pactivities .Durin g theric egrowin gseaso nthe yconcentrat eo ndagma y(a searlie r discusseda lo wrisk ,highl yprofitabl ecro prequiring ,however , largecas houtlay sfo rfertilize rearl yi nth eseason) ,wherea s duringth epost-monsoo nseaso nthe ygiv epriorit yt osquas hwhic h isa labou rintensiv ecro pwit hpotentiall yhig hreturns ,bu twit h ahig hpric eris klevel .

Foryoun gnon-surplu shouseholds ,th enee dt osatisf ydail y 214 subsistencerequirement swit hlimite dlabou rresource san dmeagr e financialreserve sha sa majo rimpac to nthei rmanagemen tpattern . Toavoi dheav yborrowin gfo rconsumptio npurposes ,thu sreducin g theavailabilit y ofcredi tfo rinvestment si nagriculture ,thes a householdsofte nhav et oengag ei nwag elabou ractivitie searl yi n thecroppin gseason .Give nth elimite dan duncertai navailabilit y ofsuc hwag elabou ropportunitie s(Sectio n5.2.5) ,wag elabourer s havet ob eavailabl ewhe nsuc hopportunitie sarise .Protectin g ; one'spositio na sa wag elaboure ri nth epersonalize dwag elabou r marketo fth evillag eimplie stha t 'oneshoul dneve rsa yno 'wha n anotherfarme rask syo ut owor ko nhi sfarm .Hence ,i norde rt o reduceth eris ktha tow ncro pactivitie sma yb edelayed ,poo r householdswit hlimite d labourresource sten dt ochoos eself - employedcro pproductio nactivitie stha td ono trequir eheav y labourinvestment sdurin gth eperio dtha twag elabou ractivitie s areavailabl e (ploughing,transplanting ,weeding) ;tha tar e flexibleenoug ht oallo wpostponemen to fcro poperations ;an dtha t havea cas hinpu tprofil erequirin gcas hinput slate ri nth e season.Therefore ,i ti sno tsurprisin gtha tthes ehousehold sals o growrelativel y largearea so fBE- 3crops .O nth eothe rhand , thesehousehold sar emor epresse d togro wHYV san ddoubl eric e cropsbecaus eo fthei rlo wincom epositio nan dth eadvantag eo f havinga nearl yric eharves twit hHY Vcrop sfo rconsumptio n purposes.

Incontras twit hyoun ghouseholds ,household si nth esecon dlif e cyclestag e (i.e.,middle-age d households)hav ebot hampl e availabilityo ffamil ylabou ran da hig hleve lo fhousehol d expendituresi nterm so fric erequirement san dcas hrequirement s forth eschoolin go fchildren .Becaus ethes ehousehold shav eth e labourresource sa swel la sth ereaso nt ointensif y landuse ,i t isno tsurprisin gtha tparticularl ymiddle-age d householdsstarte d experimentingwit hth eDSR-WS Rpattern .Apar tfro mth ebenefi to f increasing thereturn spe rhectar ewithou tan yincreas ei nth e ! paid-outcos to fric eproduction ,cultivatin g parto fth efar m withDSR-WS Rals oreduce sth echanc etha tlabou rmus tb ehire dfo r landpreparatio ndu et oit sspreadin geffec to nth eoveral llabou r inputprofile .I tdoe sno tonl yallo wa mor eeffectiv eus eo flan d resources,i tals ofacilitate sa mor eeffectiv eus eo fth efixe d familylabou rresources .Lan dpreparatio nan destablishmen to fdr y seededric ecrop soccur sdurin ga perio dwhe nusuall yonl ycor no r dagmayar eplanted .

Giventh edifference sbetwee nthes etw olif ecycl egroups ,i tca h beexpecte d thatwhe nyoun ghousehold smov etoward sth een do fth e firstlif ecycl estage ,th emanagemen torientatio no fthes e householdswil lgraduall ychang ea sfoo drequirement sincreas ean d childrengraduall ystar tparticipatin gi ncro pproductio n activities.Especiall yth eris ko flo wproductio ndu et owee d infestationo fdr yseede dHY Vcrop sdecline sa sweedin gi sa n activitytypicall ycarrie d outb ychildren .I nthi ssituation , surplushousehold sar elikel yt ostar tconcentratin gmor eo fthei r ownlabou ro nric ecro pproductio ni norde rt ointensif yric e 215 croppinga tth eexpens eo fnon-ric ecro pcultivation .Non-surplu s households,becaus eo fthei rsmalle rfar mareas ,ar elikel yt o continuet ob eengage d inwag elabou ractivitie sbu twill ,a tth e sametime ,intensif yric ecro pproduction .Th eabov eadoptio n patternals osupport sth evie wtha twhe nhousehold smov etoward s thethir dlif ecycle ,the yar elikel yt oreduc eth eare aunde r intensiveric ecropping .Fo rhousehold sa tthi slif ecycl estage , riceconsumptio nrequirement san dcas hrequirement sfo rschoolin g willdeclin ebecaus echildre nhav efinishe d theireducatio nan d areleavin gth ehousehold .

Ofcourse ,give nth emultitud eo fothe rfactor sdeterminin gth e choiceo fcro pactivities ,th eabov erepresentatio no ffactor s determiningadoptio nbehaviou ri ssomewha tschematic .Furthermore , thenumbe ro fhousehold spe rcategor yi sver ysmall .However ,th e consistencywit hwhic hcertai ncategorie so fhousehold sar eo rar e notincline dt oemplo ydoubl eric ecroppin gstrongl ysupport sth e ideatha t- apar tfro mwealt h- th elif ecycl eha sa stron gimpac t onth eadoptio nbehaviou ran dcro pactivit ychoic eo fhouseholds . Becauseo fthei rlo wman-lan d ratio,youn ghousehold sfac ea muc h highermanagemen tris ktha nmiddle-age d households.Although , youngnon-surplu shousehold sar ehar dpresse d tointensif yric e cropproduction ,the yclearl yfac eth ehighes tmanagemen trisks . Theyhav ebot hinsufficien t familylabou ran dinsufficien t resourcest ohir elabou rt oremed yadvers ecro pgrowt hconditions . Youngsurplu shousehold sma yencounte rproblem si nfindin ghire d labourdurin ga tigh twag elabou rmarke tsituatio nand ,give n theirincom eposition ,fin dmuc hles sreaso nfo rintensifyin gric e cropproduction . THEIMPORTANC EO FRIS KI NFERTILIZE RDECISION SFO RRIC E PRODUCTION

Inth epreviou schapter ,i twa sshow ntha tadaptatio no ffar m plansi sa ke yaspec to ffarmers 'decisio nmakin gan dris k reduction strategies.Adaptatio noccur si nth ecours eo fyear sa s a resulto fchangin gtechnology ,lif ecycl estag eo fth ehousehol d andoveral lsocio-economi c conditionsa swel la swithi nyear si n responset oactua lenvironmenta lconditions .Throug h 'adaptive planning'farmer sattemp tt oobtai nth ebes toutpu tfro ma cro p productionsyste mwhic hdepend so nuncertai nrainfal lan da variablegrowin gseaso nduration . Sequentialcro pchoic ean d : flexiblecroppin gpatter nstrategie swer eobserve da sth emai n elementso fsuccessfu lplannin gan dadaptatio nt ouncertai n environmentalconditions .

Thischapte rspecificall y dealswit hdecision srelate d toth eug e offertilize rinput si nric ecro pproduction .Sinc eth e introductiono ffertilize rresponsiv eric evarieties ,artificia l fertilizershav ebecom ea nimportan tmean st oincreas ecro p productionan dsustai nlan dproductivity .T osom eextent ,th eus e offertilizer san dassociate d cropinput sha sbecom ea prerequisite formeetin ghousehol dconsumptio ngoal s(Chapte r4)s . Itis ,however ,a commo nobservatio ntha tther estil lexist sa • widega pbetwee nwha tyield sar epresentl yconsidere d possibleif i rainfedarea san dwha tfarmer sactuall yd oobtain .Insufficien t useo ffertilizer sha softe nbee nindicate da sa majo rfacto r explaining thisdiscrepancy .Empirica lstudie shav einvariabl y showntha tfarmer swh oadop t 'modern'varietie sappl yfertilize r ata muc hlowe rrat etha ntha tpredicte d byeconomi ctheory ,give n prevailingmarke tprice san dexperimenta lrespons e(Davi dan d Barker,1978) .I nth eliterature ,variou shypothese shav ebee npu t forwardexplainin gth ediscrepanc y betweenactua lan doptima l fertilizerrates : First,experimenta lan don-far mfertilize rrespons ema ydiffe r substantially reflecting thehighl ycontrolle dcondition sunde r whichfertilize rrespons ei smeasure d inexperiments .Further ,th e withinan dbetwee nfar mvariatio ni nth equalit yo flan dan dwate r managementma yb esubstantia l- particularl y soi nrainfe d areas,- resultingi na rang eo foptima lfertilize rlevel srathe rtha non e singleoptimum . Second,insufficien tattentio nma yhav ebee npai dt ocas h constraintsa tth efar mlevel .Impute d costo finput sbase do n ongoinginteres trate sma ypoorl yreflec trea lopportunit ycos to f capitali ncas eo fimperfec tcapita lmarkets .Specifically ,poo r farmersma yhav elimite dacces st ocredit . Third,institutiona larrangement ssuc ha sshar etenanc yma yreduc e optimalfertilize r levelsrelativ et othos epredicte d forfixe d rentcontracts . 217 Fourth,insufficien to rineffectiv eus eo fothe rinput si nric e cropproductio nma yreduc eth eyiel drespons et ofertilizer . Resourcepoo rfarmer sma yappl yles sfertilize rdu et oconstraint s onth eleve lo fapplicatio no fothe rinputs . Fifth,farmers 'perceptio no ffertilize rrespons ema ydiffe rfro m empiricalfindings .Thi sma yi npar tb edu et olimite dinformatio n and/orunderstandin go ffertilize rtechnolog ya swel la s associatedcro pproductio ntechnology . Sixth,farmer sma yno tai ma tmaximu mprofits .I ti sa commo n observationtha t- unde rcondition so fdiminishin g returns- nearlyoptima lcondition sar eindee dver ynearl yoptimal .Farmer s mayemplo ysimpl erules-of-thumb ,suc ha sa conservativ ebenefit - costratio ,t oarriv ea tsuc hnearl yoptima lconditions . Finally,mor erecentl yincrease dattentio nwa spai dt oris ka sa n additionalfacto rexplainin g sub-optimalus eo fcro pinputs .I ti s hypothesized thatfarmers 'concer nwit hadvers eenvironmenta l conditionsaffectin gagricultura lproductio nma ylea dt oris k aversebehaviou ran dinsufficien tus eo fyiel dincreasing ,bu tno t necessarily riskneutra ltechnolog ysuc ha sfertilizer .

Althoughthi schapte rprimaril ydeal swit hth eris kaspec to f fertilizeruse ,a nattemp ti smad et oapproac hth eissu efro mth e broaderperspectiv eo fth eabov eindicate dhypothese si norde rt o reduceth edange ro fa possibl ebia si nresearc horientatio n towardswha tRoumasse t(1979 )call s 'theidentificatio no f apparentris kaversion' .Tha tis ,t oattac himportanc et o identified risk,wherea si nfact ,othe rnon-identifie d variables are(par tof )th eunderlyin gcaus efo runderinvestmen ti n fertilizer,o rtha tunderinvestmen ti nfertilize ractuall ydoe s notoccu rfo rth esimpl ereaso ntha toptimu mfertilize rlevel sar e wrongly specified.Hence ,apar tfro massessin g fertilizerrespons e andoptimu mfertilize rapplicatio nlevel sunde rloca lproductio n conditionsan dsocio-economi ccircumstances ,attentio ni spai dt o theissu eo fho wan dt owha texten ti ti spossibl et oisolat eth e effectdu et oris kfro mth eeffec to fothe rvariable saffectin g fertilizerdecisions .

Thissectio npresent sa brie fintroductio nt oth emicro-economi c theoryconcernin gth echoic eo fcro pinpu tlevels .Farmers ' perceptionan dus eo ffertilize rtechnolog yi nric eproductio nar e discussed inSectio n8.1 .A nassessmen to fth erespons et o fertilizerunde ron-far mcondition sfo rIR-varietie san dBE- 3ric e cropsi spresente di nSectio n8.2 ,followe db ya nassessmen to f theris ko ffertilize rus ei nSectio n8.3 .Sectio n8. 4deal swit h theissu ewhethe rfarmers 'perception so ffertilize rrespons e differfro mempirica lestimate san dho wthe yperceiv eth eris ko f increasing fertilizeruse .I nth esam esection ,a nattemp ti smad e atquantifyin g farmers'willingnes st otak erisks .Thi schapte r willb econclude dwit ha nassessmen to fth erelativ eimportanc eo f thefarmers 'abilit y versuswillingnes st otak erisk . 218 Economictheor yrelate d toinpu tus ei ncro pproductio n Themicro-economi c theoryconcernin gth echoic eo fcro pinpu t levelsi nagricultura lproductio nactivitie si swel lestablishe d andi sdiscusse d indetai lb yHead y (1952)an di na mor erecen t contribution byDillo n (1977).Thi stheor yprovide sa 'mechanistic'choic emode ltha tconsist so fa se to fnormativ e decisionrule stha t- give nproductio nconstraint san dinpu tan d outputprice s- determine si na nunequivoca lwa yth ebes tsolutio n tochoic eproblems .A ssuch ,i tdoe sno taddres sth eissu eo fho w decisionmaker sarriv ea tchoices .

Underlyingth eeconomi canalysi so finpu tus ei sth ebiologica l relationship betweencro poutpu tan dfarmers 'controlle dan dnon - controlled inputs.Thi sso-calle d productionfunctio no rinpu ti responserelatio nset sa limi to nth equantit yo fa cro pwhic hca n beproduce dwit ha give ncombinatio no finputs .I nthi sproductio n function,apar tfro mth efarmers 'managemen tinput ,thre e differentinpu tcategorie sca nb edistinguishe d (Section3.2.1) : decisioninput s(e.g .labour ,fertilizer) ,fixe dexogenou sinput s (e.g.soi ltype ,natura lfertility) ,an duncertai nexogenou s inputs(e.g. ,rainfall ,pes tan dwee d incidence).I nth e conventionaleconomi ctheory ,i ti sno tcommo nt oaccoun tfo rth e influenceo fth euncertai nexogenou sinput so nproduction .I ti s assumed thatyiel drespons et oinput si sinstantaneou sa swel la s thatth eoutpu ti sknow nt oth edecisio nmaker ,i.e. ,price san d yieldsar eknow nwhe nth efarme rmake shi sdecisio no nth elevel s ofinput sh eintend st ouse .Further ,th eanalysi si susuall y basedo nth eassumptio ntha tther eexist sa continuou ssmoot h relationshipbetwee ninput san doutpu tan dtha tdiminishin g , returnsprevai lt oeac hinpu tfactor ,i.e. ,additiona loutpu tfro m increasingunit so feac hinpu tbecome sles san dless .

Withinthi sframework ,assumin gon eparticula routpu tY ,th e decisionrul eemploye dt oarriv ea tth eeconomi coptimu minpu t choicei st omaximiz eprofit s(p )give nth eprofi tfunction :

p= P y* Y - 2 Pxi* X i- F C (1) whereY = f(Xl,X2 ,. .,Xn )represent sa th erespons efunctio n relatingphysica loutpu tt ovariabl einpu tfactor s(XI , .. ,Xn), givenfixe d factorcos tFC ,an dP yan dPx iar eprice so fY an dli , respectively.

Theoptima lcombinatio no fvariabl einput sdepend so nth enatur e ofth ecro prespons efunctio nan dth erati oo finpu tt ooutpu t price,an dratio so finpu tprices ,bu tno to nth eleve lo finput s assumed tob efixe di nth eproductio nprocess .However , differencesi nfixe dinput sma yaffec tth eshap eo fth erespons e functionan dthu s theoptima lleve lo fvariabl einputs .I f interactionbetwee ninpu tvariable sexists ,optima linpu tlevel s willb edependen to nth elevel so fth eothe rinputs .

Whenunlimite d fundsar eavailable ,th eprofi tmaximizin ginpu t 219 leveli sfoun db yequatin gth efirs tderivative so fth eprofi t function (dp/dXi,i=l,2 , n)t ozero .Thi si softe nstate db yth e profitmaximizatio nrul eo f 'equateth emargina lproduc to feac h inputvariabl efacto rt oit sinvers epric eratio 1.Fo rth emor e commoncas etha tth etota lbudge tfo rinvestmen ti ncro p productioninput si slimited ,th eabov edecisio nrul eshoul db e modifiedt oth emor egenera lrul eo fequatin gth ene tmargina l returnsfro minvestment sfro mal lvariabl efactor sfo ral lcro p activities.

Ina forma lsense ,suc hbudge tlimitatio ni sconvenientl yhandle d byusin gso-calle d 'Lagrangemultipliers 'tha tproportionall y increaseth epric eratio so fth evariabl einpu tfactor st osuc ha n extenttha tth ebudge ti sexhausted .I fcas hexpenditure spe r hectarear elimite d tosom eleve lC ,equatio n (1)i smodifie dto :

p= P y* Y - £ Pxi* X i+ L (£ Px i* X i- C ) (2) whereL i sth eLagrang emultiplier .Then ,give ntha t 2PiX i cannotexcee d therestrictio nC ,th econstraine d optimumi s defined bydifferentiatin g equation (2)wit hrespec tt oX ian dL , equatingth e(n+1 )derivative st ozer oan dsolvin gsimultaneousl y

Py(dY/dXi )- Px i+ L * Px i= 0

n 2 Pxi* X i- C = 0 I-1 Constraintso nothe rvariabl einput sma yrequir eth eintroductio n ofadditiona lLagrang emultipliers .Fo rexample ,labou rrequire d forric ecro pproductio nma yb elimite d byth eamoun to ffamil y labouravailable .Th eanalysi sca nb efurthe rextende db y consideringmultipl eactivitie s (Dillon,1977) .

Ales sforma lapproac ho ftakin gint oaccoun tbudge tconstraint s ist oemplo ya reasonable ,predetermine d rateo fincreas ei nth e costo fvariabl einputs .Suc hopportunit ycos tconsider sth e foregonebenefit si nterm so fth emargina lne tretur nfro m alternativeinvestmen topportunitie san di sbase do nth esam e principletha ti sinvolve d inth eus eo fth eLagrang emultipliers . Fixedopportunit ycostin go fcas hinput si svali di fgoo dcredi t facilitiesar eavailable .I nsuc ha case ,th elowes tvalu efo rth e opportunitycos to fcas hma yb etake na sth elocal ,ongoin g interestrat eo nshort-ter mproductio nloans .

Optimalinpu tus ei sfurthe rinfluence d byinpu tfactor stha tar e costedproportiona lt oth eoutpu tobtained .Fo rexample ,lan dren t mayb epai da sa proportio no fth efina lharves t (sharetenancy) , similart oth epaymen to fharvestin glabour .Suc hinpu tfactor s proportionally decreaseth emargina lvalu eproduc tor , alternatively,increas eth epric erati owit hth einvers eo fth e sharefactor .I na simila rway ,percen tyiel dlosse sdu et opost - harvestprocessin g (threshing,drying ,hauling ,storing ,etc.) .t o theexten ttha tthe yar eno ttake nint oaccoun ti nth erespons e 220 function,shoul db eincluded .Cos tincurre d inth eapplicatio no f variableinput stha tvar yaccordin gt oth eleve lo fapplication;d o havea nadditiv eeffec to nth einpu tfacto rcost .

Equation (3)show sho wth evariou sfactor sinfluenc eoptimu minpu t levels.

Py (dY/dXi)- ((1+ R)/SF))(Px i+ AC )= 0 (3) whereR i sth einteres trat eo nloca lloans ,S Fi sth eshar e factor,an dA Car einpu tapplicatio ncosts .

Theintroductio no fris ksubstantiall ycomplicate sth eanalysi so f responseefficienc y (Chapter 3.2).Th efirs tproble mrelate sto | theestimatio no fth etechnica lproductio nrelationshi pi nwhic h theinfluenc eo funcertai nexogenou sfactor so nproductio n outcomesi sexplicitl yaccounte d for.I nparticula rfo rinpu t choiceproblem stha tallo wsequentia ldecisio nmaking ,th e measurement ofrespons euncertaint y ofindividua lcro pinput si s, difficult.Second ,ris kis ,t osom eextent ,no tindependen to fth e resourceavailabilit y offar mhouseholds .Certai nris kfactor sna y befull y (e.g.weeds )o rpartl ycontrolle d (e.g.pes tincidence! ) byfarmers .Third ,wit hris ksubjectiv eelement s(ris kperception s andattitudes )ar eintroduce d intoth eanalysi swhic hpreven tth e determinationo fa single ,optimu minpu tlevel .Becaus eo fthes e elementso fsubjectiv ejudgement ,th ebes toperatin gcondition s thatwoul db eappropriat efo ron eperso nma yb equit edifferen t foranothe r (Dillon,1977) . •

Inmodellin gcro pinpu tchoic eproblems ,mos tstudie shav e abstracted fromth einfluenc eo ftim eo ndecisio nmakin gan dtrea t responseris ka sno tbein gsubjec tt osequentia lcontro lb yth e farmer.I nfact ,th emos tcommonl yemploye dchoic emodel sar e simpleextension so fth eabov edescribe ddeterministi cmodel .Fo r example,Anderso ne_ ta l(1977 )sho who wth eexpecte dutilit y maximizationrul ema yb eincorporate d inth efirs torde r conditionst oderiv ea tsubjectiv eoptima lsolutions .I na simplified form,th efirs torde rconditio nfo rmaximizin gutilit y isgive na s

E(MVPi)= MFC i+ Ralr ,i=l ,. ., n (4) whereE(MVPi )i sth eexpecte dmargina lvalu eproduc to finpu ti , MFCii sth e(non-stochastic )margina lfacto rcos to finpu ti ,an d Ralri sa ris kadjustmen tfactor .E(MVPi )wil lb edetermine db y theexpecte d valueo fth euncertai nenvironmenta lfactor sinasffe r asthe yinterac twit hinpu tresponse .R ai sth efarmers 'loca l' riskaversio nparamete ra sderive db yon eo fth eearlie rdescribe d methodsan dI ri sth emargina lcontributio nt oris ko fadditiona l inputuse .Thi sdecisio nrul eimplie sa positiv eris kadjustmen t ifbot hI ran dR aar epositive ,i.e. ,a ris kavers efarme rwill ! stopshor to fequatin gE(MVP )t oMFC .Fo ra derivatio no fthi s rule,se eAnderso ne ta l (1977). 221 Safety-firstrule sar eles seas yt oincorporat eint oth efirs t ordercondition sfo roptimizatio n becausethe yd ono tassum ea continuoustrade-of f betweenexpecte d returnan drisk .Unde r strictapplicatio no fthi srul eoptima lsolution sar eaffecte d onlyt oth eexten ttha ta predetermine d incomeleve lcanno tb e attained,eithe ra ta give nfixe dprobabilit y levelo rbase do n therul etha tth eprobabilit y offallin g belowsuc hfixe dincom e isminimized .I ti spossible ,however ,t oapproximat eth esafety - firstrul ea sa standar ddeviatio nrul e (1)whic hthe nallow sfo r a similardecisio nrul especificatio na sutilit ymaximization .

8.1 Farmers'perceptio nan dus eo ffertilize rtechnolog yi nric e production Beforea nattemp ti smad et oquantitativel y assessth erespons et o fertilizerunde rfarmers 'condition san dth eeffec to fris k factorso nfertilize rresponse ,thi ssectio nwil ldea lwit hth e issueo fho wfarmer sapproac hsoi lfertilit ymanagemen t forric e cropproduction .Suc hunderstandin g isneede d toappreciat ean d interpretfarmers 'behaviou rwit hrespec tt ofertilize ruse .

8.1.1 Typeso ffertilize ruse db yfarmer s Farmersgenerall y recognizeth ebeneficia leffec to fvariou s sourceso forgani cfertilizers .Livestoc kmanur ei sconsidere d beneficialt ocro pgrowth ,bu ti shardl yuse di nric ecro p production.Apar tfro mth efac ttha tth ecollectio no fmanur eca n bea laboriou sactivit y (themai nsourc eo fmanur ebein gcarabao s thatar eno tpermanentl y stalled)a swel la stha ti tdoe sno tsee m tob esociall yfeasible ,th emai nreaso nfo rno tusin gmanur e appearst ob eth epotentia ldange ro fincrease dwee dinfestatio n inmanure d fields.I na numbe ro fcase sdelute d pigmanur ei suse d foruplan dcro pproductio n (e.g.dagmay) .

Farmersmentio nth ebeneficia leffec to fleguminou scrop so nsoi l fertility.Bot hcowpe aan dmun gar eindicate d inthi srespec tan d areuse di nrotatio nwit hothe rcrop so nth euplan darea so r followric ei nlowlan dareas .However ,thes ecrop sar eno tuse da s greenmanure .Farmer sgro wthe mfo rbea nproductio nan dd ono t incorporateresidua lgree nmatte rint oth esoil .Incorporatio no f ricecro presidues ,particularl y thestubble ,a tth estar to fth e cropseaso ni scommo npractice ,bu tth eus eo fth esickl ean d short-statured varietiesdoe sno tleav emuc hresidu eafte r harvesting.Moreover ,i ti scommo nt obur nric efield sdurin gth e dryseaso ni norde rt oreduc ewee dinfestation .Th epile so fric e strawlef tafte rthreshin gar epartl yuse d forcaraba ofodde ro r burnedt ofacilitat ea quic kestablishmen to fa secon d ricecrop . Iti sno tcommo nt osprea dric estra wove rth efield ,althoug h farmersar eawar eo fth ebeneficia leffec to nsoi lfertility .Thi s canb eobserve db yvigorousl ygrowin gric eplant si nplace swher e inth epreviou sseaso nric estra wwa spile dan dburned .

Byfa rth emos timportan tsourc eo ffertilize ruse di nric e productionar eartificia lfertilizers .Farmer shav egaine d 222 substantialexperienc ei nusin go ffertilizers .The ywer e introduceda searl ya sth emid-1960 stogethe rwit hth egradua l; replacemento fth etall ,traditiona lvarietie swit hth e(then )j ; modern,fertilize rresponsiv evariet yBE-3 .Wit hth eintroductio n ofth eM-9 9programm eearl yi nth e1970 s(Appendi x II.1),th e [ levelo ffertilize rus eincrease dconsiderably .Durin gth eshor t M-99period ,a numbe ro ffarmer sexperimente dwit hth erecommende d highfertilize rrates .However ,i twa scommo nt odistribut eth e fertilizerreceive dove ral lcrop si nth efarm .Afte rth eM-9 9• programme,mos tfarmer sreduce d fertilizerinput st oa mor e economiclevel ,partl ycause d bytigh tbudget sdu et oM-9 9loa n repayments.

Atpresent ,farmer sconside rartificia lfertilizer sa prerequisit e forsuccessfu lric ecro pproduction .Probabl ydu et oth eearlie r describedcro pintensificatio nproces sstartin gwit h(non - fertilized)cor ni nlowlan d fieldsi nth eearl y1960s ,muc ho fth e naturalfertilit yo fth eorigina lric hcla ysoil sha sbee n depleted.Soil sar econsidere d lamgudwhic hmean stha tinherentl y good soilslac kfertility .Ther ear einstance so ffarmer srentin g out(tenanted )lan dbecaus ethe ycanno tfinanc efertilize rinputj s duet odeb tinduce dcredi tconstraints . j

8.1.2 Farmers'knowledg eo fartificia lfertilizer s j Mucho fth eknowledg efarmer shav eacquire dove rth eyear sha s! beengaine dthroug how nexperience .Extensio nha straditionall y stressed theimportanc eo ffertilize rrate srathe rtha nt oinforf m farmersabou tth efunctio no ffertilize ran dfertilize r ! management.Although ,base do now nexperience ,farmer sappea rt d; havea goo dintuitiv egras po ffertilize rtechnology ,suc h experiencema ybecom eles susefu lwhe nenvironmenta lcondition s| change.I tma yb esafel yassume d thatafte ra numbe ro fyear s i farmerswil ladap tthei rpractice st osuc hne wconditions . However,a nadequat eextensio nservic ema yreduc ebot hth eperio d andth ecos to fsuc htransition . i Themos tcommo ntype so ffertilize ruse dar eure aan dammoniu m sulphate.Mor erecently ,farmer sstarte d toswitc ht oothe rtype s sucha sammoniu mphosphat edu et oproblem sencountere dwit hth e useo fth eabov enitrogen-base d fertilizers.I ngeneral ,farmer s arefamilia rwit hdifference sbetwee ntype so ffertilizer si n termso fnutrient spresent .However ,the ylac kknowledg eabou tth e variousconcentration so fthes enutrients .Instea do femployin g theseconcentrations ,farmer sevaluat efertilizer so nth ebasi so f thefollowin gthre easpects : .thei rvisua leffec to ncrop si nrelatio nt oth einheren t fertilityo fth esoil ; .th epric eo ffertilize rpe rbag ; .th eamoun to ffertilize ri nvolum eterms .

Farmersgenerall yconside rure ath ebes ttyp eo ffertilize rfo r ricecrops .The yespeciall yappreciat eth eimmediat eeffec to f 223 urea(tambok )o nth ecolou ro fth eleave sshortl yafte r application.I ncontrast ,accordin gt ofarmers ,ammoniu mphosphat e 'takesa lon gtim et orelease' .O nth eothe rhand ,thi slatte r typeo ffertilize ri sevaluate d positivelybecaus e 'itstay s long',whic hobservatio nma yb epartl yrelate dt oth efavourabl e effecto fphosphat eo nth eus eefficienc yo favailabl enitroge n giventh egenerall y phosphate-deficient soilsi nth earea . Ammoniumsulphat ei sconsidere d achea pbu tinferio rfertilize r whichi sonl yuse di ncas efarmer sd ono thav eenoug hmone yt o purchaseth emor eexpensiv eure ao rammoniu mphosphat e('it' sn o goodbecaus ei tcanno treac h4 0days ,the nth eric ebecome syello w again').

Lacko favailabl ephosphat ei nric efield sdu et oth econtinuou s useo fure aan dammoniu msulphat ean dth egenera lincreas ei n croppingintensit y isa widesprea d problemi nth eare ao fwhic h mostfarmer sar eno taware .Th eeffec to fthi sdeficienc yi s clearlyvisibl ei nfield swher edurin g thedr yseaso nsquas ho r watermellonwer egrown .Thes ecrop sar eusuall yfertilize dwit h ammoniumphosphat eo rcompoun d fertilizerssuc ha s14-14-14 .Th e residualavailabilit y ofphosphat ea tregula rspot si nth efiel d hasa ver ymarke d 'dotted'effec to nth efollowin gric ecrop , particularlya tth eearl ystag eo fcro pgrowth .Furthermore , farmersincreasingl y startt ohav eproblem swit hth eus eo fure a whichdoe sno tsee mt ob eabsorbe d byth eplant .The ycomplai n about 'riceno teatin gurea 'whic hsom efarmer sattribut et oth e poordevelopmen to fth eroo tsyste mo fth eplant .Although ,thes e effectsar eno tdirectl yattribute d tophosphat edeficiency , farmersten dt osolv eth elatte rproble mb ychangin gt oothe r typeso ffertilizer stha tusuall ycontai nphosphate .

Farmers'knowledg eo ffertilizer ssubstantiall ydiffer sbetwee n farmerswit han dwithou texperienc ewit hphosphat econtainin g fertilizers.A son efarme rexplained : 'howcoul dth ec,ro ptak e urea,th esoi li salread y 'sour'(aslum) .Th esoi llack s phosphate,bu tthe ystil lcontinu et ous eure awithou tknowin g thatther ei sn ophosphat ei nth esoil .Nitroge ni sreall ycol d andphosphat emake sth esoi lwarm .I stha ttrue?' .Th elatte rpar t ofthi sremar kseem st oindicat esom enotio no fth enee dfo ra nutrientbalanc ei nsoil srequire d forgoo dric eproduction . However,i tals oappear stha tphosphat edeficienc yi sconfuse d withth ewide rhel dnotio namon gfarmer stha tsoil sge taci dafte r continuousus eo ffertilizer s(aslum) .

Otherobservation smad eb yfarmer susin gphosphat econtainin g fertilizersthroug hmer eexperienc einclud esuc hremarkabl y accuratefinding sas :'ure ai sgoo dfo rth etiller san d16-2 0 (ammoniumphosphate )i sgoo dfo rth efruit s (panicles)', 'whenyo u apply 16-20th eleave sar eno ts owid ean dgree n (lampano),bu t thefruit sar egood' , 'withure ath ecro pgrow svigorously ,bu t thegrain sar esmal lan dno twell-fille d (huyos)'.Finally ,on e farmerindicate d thebeneficia leffec to fammoniu mphosphat eo n dry-seeded rice:'I ndry-seedin gw eus ea hig hseedin grate .An d 224 if you have a dense stand it isn o good tohav e urea,onl y for the second dressing youappl y urea.I f you use urea for the first dressing, the stemwil l become soft (due to the high crop density) so itwil l bemor e susceptible to pestsan d alsomor e susceptible to flooding'. t Apart from fertilizer type and prices,certai n farmers attach I importance to the size of the bag.Although ,al l fertilizers come in bagso f 50kg ,the y substantially differ in size.Bag so f ammonium phosphate are about 30%les s in volume compared tobagf c of urea,an d because of that farmers consider the former 'kul-ay', which term iscommonl y used for situations inwhic h something appears more than it iso r less than expected. Since farmers assess dosages in terms of volume applied rather than the amount of kg applied, they reason that toappl y the same amount of fertilizer more bags of fertilizer are required and, therefore,! the cost per application isconsidere d to be higher.

8.1.3 The amount of fertilizer applied Themanne r inwhic h farmers tend to determine theminimu m amount, of fertilizer needed for rice production is simple but effective: keep the rice crop green until the grain filling stage.Simila r to other inputs,fertilize r is primarily seen by most farmers asa control input in the sense that it isa necessar y input tokee p the crop green and give ita healthy appearance (hitsura, literally meaning face)a swel l as tocontro l the stand (density) of the rice crop (tindog). \ In general,crop swit ha low stand density (nipis)receiv e j relatively high dosages of fertilizer to induce tillering,wherea s on high density crops (gutok, literally crowded)les s fertilizet isapplie d toavoi d weak,elongate d tillers (barriri).Apar t from stand establishment,crop sar e evaluated on the basiso f even height and colour (sarama). In case certain parts of a field develop poorly they may receive a spot fertilization ahead oftfy e main application.Crop s that remain green during the growth cyc^e of the plant may not receive any fertilizer at all.Extr a high dosageso f fertilizer (gintapat)ma y beapplie d after weeding heavily weed infested fields inorde r togiv e the crop - as farmers call it- a sudden boost (nagulpihan, literally to frighten the crop). Soil quality, referred to by farmersa s 'thecapacit y of soil' (capacidad sang lupa), isanothe r factor influencing fertilizer applications.Farmer s are critically aware of these differences in soil quality and observe them by looking at the change in leaf colour during the early growth stage of the plant.Th e soonertfy e leaves turn yellow after crop establishment the less fertile the land isconsidere d to be.Lan d isconsidere d fertile if two weeks after germination the leaves still look 'pal-ay' (healthy).

Apart from soil texture - fine-textured soils (pug-a)ar e 225 consideredmor efertil etha ncoarse-texture d soils(baras-barason , buga)- difference si nfertilit yo fsoils/field sar eattribute dt o thebeneficia leffec to fsoi ldeposit so fhighe rpositione d fields (lay-on)a swel la st oth einflo wo fartificia lfertilize r nutrientsfro mhighe rpositione d fertilized fields.Generally , lessfertil elan di na simila rwate rmanagemen tgrou preceive s higherdosage so ffertilize ra ta nearlie rstag ei ncro pgrowth , whereasles sfertil epart si na fiel dreceiv ea nextr ados eo f fertilizerthroug hspo tapplication .

Generally,farmer sd ono tappl yfertilize runti lth ecro pi sfull y established anda firs tweedin g (ifrequired )i scarrie dout . Exceptfo ra ver yfe wisolate d cases,mainl yi ntransplante dric e crops,basa ldressing so ffertilize rd ono toccur .Th eabsenc eo f this- throug hth eextensio nservic e- strongl yrecommende d practicei sunderstandabl ei nvie wo fth epredominanc eo fwe t seededric ecrop si nth earea .Sinc efield shav et ob edraine d priort oseeding ,wee dinfestatio nma yb econsiderabl ean dapplie d fertilizerma yinduc ewee dgrowth .Moreover ,du et odrough tafte r drainagefertilize rma yb elost .However ,i ncertai ncases ,e.g. , aftersudde nfloodin go fdry-seede d ricecrop s(nagapuras) ,a n earlydressin gma yb erequired .

Fertilizersar emainl yapplie d inon eapplication ,bu ttw o applicationssometime soccur .Sinc eth efirs tweedin gi scommonl y carriedou ttw ot othre eweek safte rseeding ,th efirs tfertilize r applicationtake splac ethre et ofou rweek safte rcro p establishment.However ,application sma yb edelaye d duet osuc h factorsa spostponemen to fweedin g (e.g.du et oinsufficien t moistureconditions) ,famil ylabou rconstraint so rshort-ter mcas h flowproblems .Dependin go ncro pgrowt hdevelopmen tan dcas h availability,farmer sma yhav ea secon dapplicatio ndurin gth e earlyreproductiv estag e (nagabilog-bilog) .Suc hsecon d applicationi scommonl yconsidere da s 'anextr aamount 1 overan d aboveth eregula rdosag e('it' sfo rth efruits') .I tma yhappen , though,tha ta secon dapplicatio ni snecessar ybecaus eth efirs t applicationwa sno teffective ,e.g. ,du et ofloo dcondition s shortlyafte rfertilizatio no rbecaus eo fa sever ephosphat e deficiency.

Amongfarmer sther ei sa genera lconsensu so fth eminimu mamoun t offertilize rrequire d forth efirs tdressing .I ti sver ysimila r toseedin grate sfo rwet-seede d ricecrop so na volum ebasi s( 1t o 1.5 bags).Thi si sno tver ysurprisin g sincefertilize ri s broadcasti nstandin gwate ra ta simila rrat ea spre-germinate d seedsar ebroadcas tunt opuddle d soils.Th emaximu mamoun to f fertilizerfo rth efirs tdressin gi sconsidere d tob ei nth erang e of3 t o4 bag spe rhectare ,wherea sth etota lmaximu mamoun tfo r twoapplication si si nth erang eo f6 t o7 bags/ha .Th eactua l amounto ffertilize rapplie d byfarmer sis ,t osom eextent , sequentiallydecide dupon ,i.e. ,i tdepend so nth edevelopmen to f thecro punti lth etim eth efertilize ri sapplied .However , farmers'contro lo fris kfactor sprio rt oth eapplicatio no fth e 226 firstfertilize rapplicatio n (e.g.earl ydrough tstress ,incidenc e ofearl yseaso npests ,an dwee dinfestation )i sgenerall y adequate.I nsever ecases ,th eeffec to fris kfactor so ncro p growthi susuall y beremedie db yfarmer sthroug hreplanting .Thi s maysometime srequir epullin go fseedling si npart so fth efiel d followed byre-seeding .Althoug hth eleve lo fris kcontro lpartl y dependso nth eresourc eavailabilit yo ffarmers ,earl yseaso nras k factorsca ngenerall yb econsidere dt ohav ea mino rinfluenc eo n therat eo fth efirs tfertilize rapplication .Ris kcontro lafte r theapplicatio no fth efirs t(an dmain )fertilize rapplicatio ni s muchles sdu et oris kfactor ssuc ha sdrough tdurin gth e reproductivegrowt hstag eo fric eplant so rvariou stype so fpes t infestation (Section7.1.4) .

Farmersattemp tt odivid einput samon gcrop si nsuc ha wa ytha t allcrop sgro wwel l (ekonomia).However ,i ncertai ncase scrop s may- a sfarmer scal li t- b eabandone d (pabay-an),i.e. ,the y justleav eth ecro pa si ti swithou tan yfurthe rcare .Fo r instance,thi sma yoccu rafte ra heav ywee dinfestation . Furthermore,farmer sma yfavou rcertai nparcel s(usuall ythos e closet oth ehomestead )whic har emor eintensivel ymanage d (buylohan).Apar tfro meconomizin gacros scrops ,farmer sals o appeart ohav ea genera leconomizin gattitud etoward sth eus eo f fertilizer,particularl y incas efertilize rha st ob efinance d withborrowe dmoney .Loca lexpression ssuc ha s 'patass agasto ' ' (thereturn sjus tcove rth eexpenses )o r 'patasma ngihapon '(tw o optionstha tgiv eth esam eresul to rther ei sn owinner )ar e frequently usedwhe nfarmer sexplai nwh ythe yd ono tappl yhighe r rateso ffertilize r

8.2 Measuringth erespons et ofertilize runde rfarmers ' conditions Inthi ssection ,a nattemp twil lb emad et oestimat eth eyiel d responset ofertilize ro fth enewl yintroduce d varietiesIR3 6an d BE-3.Sectio n8.2. 1 reviewsapproache san dproblem si nassessin g stochasticrespons efunctions .Combinin gtw oexistin gapproaches , animprove dmetho do festimatin g stochaticrespons efunction sI s suggested.Problem sencountere d inestimatin grespons efunction s usingnon-experimenta ldat aar ediscusse d inSectio n8.2.2 .A descriptiono fth eemploye dfertilize rrespons emode li sgiven:i n Section8.2.3 ,followe db ya discussio no fth eestimate drespons e functions(IR3 6i nSectio n8.2. 4 andBE- 3i nSectio n8.2.5) .

8.2.1 Approachesan dproblem si nassessin g stochasticrespons e functions Therear eessentiall y twoway so fassessin grespons evariabilit y (Andersone tal , 1977).On ecoul db ecalle dth e 'gross'approac h inth esens etha tn oattentio ni spai dt oindividua lris kfactor s causingrespons evariability .Th eothe rapproach ,calle d analytical,explicitl ymeasure sth eimportanc eo fth evariou sris k factorsprio rt oassessin gthei roveral leffec to nyield .Th e diagrambelo wshow sth evariou smethod stha tar esuggeste d inth e 227 literature.I ti sals oindicate dtha tth emetho dapplie di nthi s studyi sa combinatio no fth eanalytica lan d 'gross'approach .

Diagram: 'Empirical'ris kassessmen tmethod s

'gross'approaches : analyticalapproaches : .cross-sectio nanalysi s .percen tdamag eapproac h .homogeneou ssub-strat aanalysi s .cro pgrowt hsimulatio n oftim eserie sdat a .residua lanalysi sfollowin g inclusiono fris kfactor s productionfunctio nestimatio n inproductio nfunctio n observedvariabilit yi n responsecoefficient s 1 method applied

8.2.1.1 'Gross'approache s Cross-sectionanalysi s Oneo fth emos twidesprea dmethod so festimatin g risko fa certai n productiontechniqu ei st ofin da secondar ydat asourc e(i.e .dat a collected byothers ,usuall yfo rothe rpurposes )o npe rhectar e yields,an dt oassum etha tth efrequenc ydistributio no fsuc h cross-section isa goo dprox yfo rth efrequenc ydistributio no f yieldstha ta certai nfarmer ,usin gth etechnique ,faces .Th e obviousweaknes so fthi smetho d isquit eseriou sfo ragriculture . Noaccoun ti stake no fth eeffec to fth evariou sdecisio ninput s (e.g.fertilizer )o nyield .Likewis ether ei sn ocontro lo n differencesi nfixe dexogenou sfactor ssuc ha sirrigation ,soi l type,terrain ,an dothe rphysica lcharacteristic so fth efarmer' s land.Bot htype so finput sar elikel yt odiffe rfro mfarme rt o farmer,wherea si neffect ,th eentir evarianc ei nyield si s attributed toth einfluenc eo fth estochasti cfactor ssuc ha s weather.

Homogeneoussub-strat aanalysi so ftime-serie sdat a Toproperl ycontro lth eeffec to nyiel do finput sothe rtha n stochasticinputs ,th esampl eo fobservation so ncro pyield sha s tob edivide d intosub-strat atha tar ehomogeneou swit hrespec tt o theseinputs .Thi simplie stha texcep tfo rth estochasti cinputs , allothe rinput shav esimila rvalue swithi neac hsub-stratu mo f observations.Fo rth evariou sinpu tlevels ,a nadequat eyiel dris k assessmentca nthe nb eobtaine d fromsuc ha dat aset ,i f observationscove ra sufficien tnumbe ro fyear st oaccoun tfo rth e influenceo fth estochasti cinput so nyield .Tha tis ,al lmajo r 'States-of-Nature'shoul dhav eoccurre d duringth eobservatio n period,preferabl yi na patter nwhic hclosel yrepresent sth e (joint)frequenc ydistributio no foccurrenc eo fthes estochasti c inputs. 228 Itwil lno tb esurprising ,tha ti nmos tresearc hsituation ssuc h typeo fdat ai salmos tnon-existent .Usuall ytime-serie so ncro p yieldsar elimite d toa smal lnumbe ro fyears ,wherea sth e multitudeo fpossibl ecombination so finput sprevent sa nadequat e divisionint ohomogeneou ssub-strata .Suc hmetho dma yb eemploye d withdat aderive d researcher-controlled experiments,wher eusuall y discreteinpu tlevel sar euse dan dwher esometime sexperiment sru n fora considersabl enumbe ro fyear s(e.g .long-ter mfertilit y trials).However ,i nexperimenta ldesigns ,th einfluenc eo f stochastic factorsi scommonl yconsidere da nuisance ,complicatin g theanalysi san dinterpretatio no fexperimenta lresults .Hence ,a maximumdegre eo fcontro love rexogenou sinfluence si sexcercised , invalidating,t oa larg eextent ,experimenta ldat afo rris k assessment.

Residualanalysi sfollowin gproductio nfunctio nestimatio n Tocircumven tth eproble mo fto osmal lhomogeneou ssub-strat a whichma yeasil yaris ewhe nth eabov emetho d isemployed ,a n alternativeapproac ht ocontro lth einfluenc eo fth enon - stochasticinpu tfactor si st oestimat ea productio nfunctio nan d assumetha tth eresidua lter mfo rindividua lobservatio ncapture s theeffec to fth estochasti cexogenou sinputs .Th ebehaviou ro f theerro rter mca nb einvestigate d fordifferen tinpu tinterval s orth efunctio nca nb eteste dfo rheteroscedasticity ,i.e .whethe r theresidual ssho wa systemati cchang ei nvarianc ewit heithe r increasingo rdecreasin ginpu tuse .I ti sobvious ,however ,tha t notonl yth einfluenc eo fth estochasti cinput si srepresente di n theresidua lterm ,bu tals oerror sdu et ovariabl emeasuremen tan d functionspecification .

Observedvariabilit y inrespons ecoefficient s Recently,Youn gan dMoun t(1979 )suggeste da metho do festimatin g yieldvariabilit y thatma yovercom esom eo fth eabov eproblems . Theyus ea varian to fth erando mcoefficien tregressio n(RCR ) model(Swamy ,1970 )t oestimat eth eintra-yea rvariabilit yi nth e responsecoefficient so fth edecisio ninpu tvariables .The y interpretthi svariabilit ya sbein gmainl yth eresul to fnon - specified stochasticinpu tvariable sinteractin gwit hthes e decisioninpu tvariables .Th eestimate dvariabilit y ofth e coefficientso fth edecisio ninput sca nthu sb euse dt oasses stth e variability inrespons edu et othes einputs .A specificatio no f theRC Rmode li spresente d inAppendi xVI .

Theclea radvantag eo fth eabov e 'gross'method si stha trecorde d observationso nth estochasti cvariables ,ofte nunavailable ,ar e notrequired .However ,a weaknes si stha tvariabilit y inyiel d- conditionalo nth edecisio nan dfixe dexogenou sinpu tvariable s- isentirel yattribute d tounknow nstochasti ceffects .Variatio n duet opossibl eerror so fobservatio nan dmeasurement ,a swel la s duet oth enon-measure d effectso fomitte ddecisio nand/o rcontex t variablesar econfounde dwit hvariabilit ydu et orea lstochasti c effects.Consequently ,i fobservation sar einaccurat eand/o ri f thesampl eo fyiel dobservation si sno tsufficientl y brokendow n 229 intohomogeneou sclasse so fdecisio nan dfixe dexogenou s variables,th eapproac hgive sno tonl ya poo restimat eo fyiel d variability butals otend st ooverestimat eit .Further ,th e 'gross' approachrequire ssufficien ttime-serie sdat ao ncro p yieldst ocaptur eth erea lvariabilit yo fstochasti cfactor s presenti nth eenvironment .

Foral lth eabov emethods ,dat arequirement sar edifficul tt o meet.Cro pyiel ddat aove rextende d periodso ftim ear eusuall y unavailable.However ,dat asource sfo rcertai nimportan t stochasticinpu tvariable ssuc ha srainfal lan dsola rradiatio n areofte navailable .Th eanalytica lapproac ht oris kestimatio n makesa nefficien tus eo fthi sinformation .

8.2.1.2 Analyticalapproache s Percentdamag eapproac h Thisapproach ,suggeste dan dapplie db yRoumasse t(1976) ,consist s ofa two-ste pprocedur ean di sessentiall ya simplifie d versiono f theRC Rmode lmentione dabove .First ,a no-damag eproductio n functioni sestimate d usingexperimenta ldata ,gathere dunde r highlycontrolle dconditions .Second ,fo reac himportan tcro p damagefacto r(k )variou s 'damagestates '(DSi )ar edistinguishe d andthei rassociate d percentyiel dreductio nlevel sar edetermine d aswel la sthei rprobabilit yo foccurrenc e (Pi).Th estochasti c productionfunctio n (specified fortw o 'damagefactors' )i sthe n definedas :

PiPj(l-DSli)(l-DS2j )* Y(N )= Uij* Y(N ) (5) whereUi ji sth erando mvariabl epercen tdamag erepresentin gth e jointprobabilit yo fth ecombine d percentyiel ddamag efactor san d Y(N)i sth e 'no-damageproductio nfunction' .Becaus eth erando m variablei sspecifie d tointerac twit hth eno-damag eproductio n functioni na multiplicativ eway ,th eabov emode lspecificatio n actuallyimplie stha tal linpu tcoefficient sar esubjec tt oth e samerando mvariation .Fo rth equadrati crespons efunction ,thi s resultsi nth eunlikel ysituatio ntha t- irrespectiv eo fth estat e ofth edamag evariabl e- th emaximu minpu tleve lremain sconstant , becauseth edamag efacto rdoe sno toccu ri nth efirs tderivativ e ofthi sfunction .Onl yth erespons et oinput sdiffer sfo r differentdamag estates .Moreover ,du et oth eparticula rrando m factorspecification ,th evariatio ni nyiel dwil lautomaticall y increasewit hincreasin glevel so finpu tuse .

Cropgrowt hsimulatio n Althoughno tfurthe rdiscusse dhere ,cro pgrowt hsimulatio ni s likelyt obecom ea majo rtoo li nth eassessmen to fcro pproductio n risks.

Inclusiono fris kfactor si nth eproductio nfunctio n Thismetho dals oinvolve sa two-ste pprocedure .First ,th eeffec t ofal lthre etype so finput so nyiel di sestimate dthroug h 230 regressionanalysis .Second ,th ejoin tprobabilit ydistributio n associatedwit hth estochasti cinpu tfactor si sassessed .Yiel d variabilityca nb edirectl yassesse db ypluggin gi nth evalue so f thestochasti cinpu tvariable si nth eestimate d responsefunction .

Incontras twit hth egros sapproaches ,th eproble mwit hth e analyticalapproache si sth eunderestimatio no fyiel dvariability . Inmos tcases ,however ,i ti simpossibl et ocaptur eal lth e stochasticinfluence stha taffec tyiel di nth especifie dmodel , i• Usually,fo rsom eo fthes evariable sobservation sar eunavailabl e orthei rprobabilit ydistributio ncanno tb eassesse ddu et olac k oftime-serie sdata .T osom eextent ,thi sproble mca nb esolve d wheni nth eabov ementione dRC Rmode limportan tstochasti cinput : factorsar eincluded .Suc hspecificatio nescape sth erigidit yo f theanalytica lapproac hb yallowin gth einfluenc eo fth enon - specifiedstochasti cinpu tfactor st owor kthroug hth eestimate d responsecoefficient si na rando mfashion .Tha tis ,th eomissio n ofris kfactor sfro mth erespons efunctio ni stranslate d into i intra-year,unstabl eregressio ncoefficients .Becaus ethi s responsemode lemploy sbot htime-serie so ncro pyiel ddat aan d time-serieso nstochasti cinpu tvariables ,i tallow sfo ra n efficientus eo fscarc eempirica ldat ai nassessin grisk .Th e modelwil lb efurthe relaborate do ni nSectio n8.2.3 .

8.2.2 Problemsi nestimatin grespons efunction susin gnon - experimentaldat a Therear ea numbe ro fproblem sassociate dwit hinpu trespons e | analysisbase do nfarmers 'cro pproductio ndata .First ,an dmos t important,i ncontras twit hexperimenta ldesigns ,th edecisio n | inputvariable sar eno tpre-selected ,researche rcontrolle d variables.Farmer sdecid ewhat ,how ,when ,an da twha tleve l inputsar eapplied .The ydetermin eth erang eo fth edecisio ninpu t variableso nwhic hobservation sar eavailable .Thi simplie stha t itma yno tb epossibl et oestimat eth eeffec to fcertai nfixe d inputfactors .Fo rinstance ,wit hth epresen tdat ase ti twa s impossiblet oestimat eth esquare dter mo fth ephosphat einpu tfo r aquadrati crespons emodel ,becaus eo fth egenera llo wleve lo f application.Alternatively ,i norde rt oestimat eth epossibl e ! diminishingeffec to fincrease dinpu tuse ,i ti srequire dtha t certainfarmer sdeliberatel yappl yrelativel ylarg eamount so f thatinput .

Second,th esam etyp eo fproble moccur swit hth eestimatio no f ! interactioneffect sbetwee ninputs .Althoug hfo restimatio n purposesi ti susuall yassume d thatrespons ei sinstantaneous ,it i shouldb erealize d thatinpu trespons ei sa dynami cproces si n whichinput sinterac twit heac hothe ri na sequentia lway .O f course,farmer sar eawar eo fthes einteraction san dbas ethei r inputdecision so nth econditio no fth ecro pa tth etim ethe yhav e tomak eth edecision .Fo rinstance ,farmer sd ono tappl yhig h doseso ffertilize ro nheav ywee dinfeste d fields.Thi ssequentia l aspecto fdecision-makin g causescertai ninpu tcombination sno tt 0 231 occuri n 'realworl ddata 'and ,consequently ,thei rinteractio n effectcanno tb eestimated .

Third,othe r problemsencountere d insurve ydat aar edifference s inth equalit yo fsimila rinput sinclude d inth esam einpu t variabledu et odifference si nmanagemen tleve l(e.g .metho dan d timingo fapplication )a swel la sth eofte ninescapabl enee dt o aggregatedifferen ttype so finput sint oon einpu tcategor y(e.g . differentbrand so fpesticides) .Especially ,wit hpes tan dwee d controlinput squalit yma ydiffe rwidel ybecaus eo fth ealmos t unlimited numbero fpossibl ecombination so fdifferen tpest sa s wella swee dcontro lmeasures .Couple dwit hdifference si nth e timingan dwa yo fapplicatio no fthes einput sa swel la sth e differencesi nth edegre ean dtyp eo finfestatio nwhe nthes e inputsar eapplied ,i tseem stha tsignifican t fixedeffect so f aggregateso fthes enon-homogeneou sinput sca nonl yb eobtaine db y purechance .

Finally,surve ydat aar eofte nno tspecificall y collectedfo r responseanalyse spurposes .I nthi scase ,efficien tus eo fscarc e manpowerresource sdi dno tallo wcontinuou smonitorin go f environmentalcondition si nric efield san dprox yvariable sha dt o beuse dt oinclud ethes eeffect si nth erepons erelationship . Waterstres sdat awer egenerate d throughth ewater-balanc e simulationmode lmentione dearlie r (Boltonan dZandstra ,1980) , usingon-sit erecorde d rainfalldata ,actua lplanting/seedin gan d harvestingdates ,an dtypica lbun dheigh tan d seepage-percolation ratesfo rth evariou slandscap epositions .Sola rradiatio ndat a wereobtaine d froma nearb yagricultura lresearc hstation .

Attemptst oinclud eth eeffec to fothe rstres sfactor sthroug h subjectiveestimate so nyiel dlos swer eunsuccessful .Farmer sha d difficultyi nseparatin g theindividua leffect so fth evariou s sourceso fstress .However ,sinc ewee dinfestatio ni sgenerall y morelocation -specifi can dles sunpredictabl ecompare d toothe r environmentalfactors ,a nattemp twa smad et oinclud ethi sfacto r asa fixe dexogenou sinpu tvariabl ethroug ha subjectiv eestimate . Foral lthei rric efields ,farmer swer easke dt oestimat eth e yieldlos sa s^ apercentag eo fth egros syiel ddu et oa heavy/normal/mild weedinfestatio nassumin gn owee dcontrol . Subsequently,the ywer easke dho wman yyear sou to fte nsuc h infestationwoul doccur .Th eexpecte d valueo fthes eestimate swa s useda sa prox yfo ra nexpecte dwee dincidenc eindex .

8.2.3 Specificationo fth efertilize rrespons emode l Giventh eabov elimitatio nan dinadequacie si nvariabl e measurement,togethe rwit hth egenera lproble mo fcapturin ga complexagricultura lproductio nproces si na singl erespons e equation,th efertilize rrespons efunctio ncanno tb eexpecte dbu t tob ea crud eapproximatio no fth etru eshap eo fth efunction . Accordingly,result sshoul db einterprete d carefully.O nth ebasi s ofa fertilize rrespons emode lspecificatio nb yRosegran t (1977), 232 employed for a different research-site in the Philippines,an d some preliminary analysis,th e following quadratic response relationship between rice yield and fertilizer is postulated:

Yi= (a+a*)+ (bl+bl')Sr N+ (b2+b2')N 2+ (b3+b3*)N P + (b4+b4')N/(Pest+l )+ (b5+b5!)W s + (b6+b6*)Ws N + (b7+b7*)Wi/(Weed+l )+ ui (6) where,

Y :unmille d rice yield (kg/ha) SrN (Sr*N) :interactio n solar radiation (kcal/cm2)an d nitrogen (kg N/ha) N2 :nitroge n squared NP (N*P) :interactio n phosphorus (kg Pesos/ha)an d nitrogen N/(Pest+l) :interactio n nitrogen and pest control cost (Pesos/ha) Ws :wate r stressdays (days) WsN (Ws*N) :interactio n water stressdays and nitrogen Wi/(Weed+l) :interactio n weed infestation index and weed control cost (Pesos/ha)

The coeffients (bi+bi1)represen t the fixed response coefficient (bi)an d the random term (bi')accordin g to the model specification given in Appendix VI.Th e (ui)represent s the error term.

Nitrogen appears quadratic aswel l as in interaction with solar radiation, phosphorus,pes t control cost,an d water stress (2). The solar radiation variable is defined as the total amount ofi solar energy received during the combined reproductive and ripening stage of crop growth.Followin g Wickam (1973), stress days are defined as thenumbe r of days in excess of three for which a field iswithou t standing water. Initially, three stress periodswer e distinguished following the three growth stages of rice crops.However , both the vegetative and ripening stress > variables appeared tohav e no effect on yield so they were not further analyzed.

The pest control variable represents an aggregated input variable in which a large number of different types of pesticides are combined through their deflated cash value.I t is specified in such awa y that it does not contribute directly to yield, but rather hasa protective influence on nitrogen response. Ina similar way, the aggregated weed control input hasa protective; effect on the intercept term by controlling thenegativ e effect of the weed incidence index.Becaus e of the effectiveness of bothtjh e pest control and - to some lesser extent -wee d control inputs will depend on stochastic events,th e influence of these inputs will be random. Only to the extent that a certain non-controlled infestation occurs in each season,wil l there be a significant 233 fixedeffec tfro mth eus eo fthes einputs .

Forth eBE- 3variety ,a dumm ywee dvariabl ewa sintroduce dfo r cropsestablishe dwit hth edr yseede dmethod .Becaus eo fth e relativelylon ggrowt hduratio no fdr yseede dBE-3 ,effectiv ewee d controlrequire sa substantiall yhighe rweedin ginpu tcompare dt o thetransplante dBE- 3crops .Suc ha situatio ndoe sno toccu rfo r theHY Vvariet ydu et oth eabsenc eo ftransplante d cropsa swel l asth esimilarit yi nweedin grequirement sfo rdr yan dwe tseede d crops(3) .

Unfortunately,becaus eo fth elimite dnumbe ro fobservation spe r period,th eabov especifie dmode lcoul dno tb eapplie d toth edat a forth eBE- 3variety .Below ,firs tth eresult sfo rth eHY Vvariet y willb ediscusse dand ,subsequently ,the ywil lb ecompare dwit h theresult sderive d forth eBE- 3variety .

Table8.2. 1 Regression coefficients (OLS)o ffertilize r response function forindividua l yearsan dfo r all years

Variable 1978 1979 1980 1981 Pooled

SrN 0.00113 (2.56) 0.00162 (5.41) 0.00152 (3.82) 0.00134 (2.59) 0.00130 (6.99) N2 -0.1019 (1.09) -0.2383 (3.65) -0.1309 (1 .98) -0.2105 (2.08) -0.1358 (3.88) Us -43.08 (1.58) -50.79 (1.72) -47.01 (1 •21) -87.33 (2.81) -54.37 (3.43) UsN -1.065 (1.99) -0.845 (1.64) -0.623 (0 .81) -0.455 (0.91) -0.934 (3.24) N/(Pest+1) 2.31 (0.51) 3.03 (0.78) -10.81 (2.48) -3.874 (1.21) -3.077 (1.70) liJi/(li)eed+1) -0.966 (1.05) -0.413 (0.48) -1.518 (1 .54) -2.883 (2.77) -1.233 (2.56) Intercept 1612 (4.10) 1322 (4.74) 1954 (4 .98) 2560 (5.47) 1900 (10.99)

R2 0.69 0.49 0.40 0.53 0.50 s.e. 611 806 1009 807 868 No. of obs. 74 97 119 101 391

Figures in parentheses are computed t-values.

8.2.4 Nitrogen reponse of IR-varieties Employingth eordinar yleas tsquar e(OLS )regressio nmethod ,firs t theregressio ncoefficient sfo rindividua lcro pseason sar e estimated.Tabl e8.2. 1 presentsth eresult so fthes eindividua l yearregressions ,togethe rwit hth eOL Sestimate swhe nal l observationsar epooled .Th ebasi crelationshi pappear st ob e relativelystabl ei nit slinea rterm ,bu tth equadrati cnitroge n termvarie ssubstantiall yove ryears .Thi sindicate sa nincreas e inth einstabilit yo frespons et onitroge nwit hincreasin glevel s ofnitrogen .Thi seffec ti sclearl yvisibl ei nFigur e8.2. 1 where formea nlevel so fsola rradiation ,th ebasi crespons esurface s forth eindividua lyear sar eshown .Consequently ,fo ra give n levelo fsola rradiation ,nitroge nlevel sfo rmaximu myiel d response (Nmax)diffe rsubstantiall ybetwee nyears ,rangin gfro m 88k gN i n197 9t o15 0k gN i n1980 .Th epoole destimat efo rNma x isaroun d 130k gN wit ha yiel drespons eo f2. 2tons/ha .Th e substantialeffec to fwate rstres so nnitroge nrespons ei sshow n inFigur e8.2.2 .

Thepoole destimat eo fth elinea rinteractio nter mbetwee nwate r 234 Yield (kg/ho)

3000

40 60 80 K» 120 WO 160 Nrtrogtn applied (kg/ho)

Fig.8.2. 1 Nitrogenrespons efunction sfo rindividua l yearsunde rfarmers 'condition s(IR-varieties ) stress and nitrogen implies a response reduction of almost 1kg , palay per stressday per kg N which - at a level of 60 kgN - amounts to 55k g palay per stressday. Combined with the effect of water stress on the intercept yield (i.e., yield at the 0N - level), it adds up toa n overall reduction of 110k g palay per stressday. Both water stress coefficients show a substantial variation over years.Thi sma y in part be attributed to the non^ included (stochastic)effec t of either the distribution of stressdays within themeasuremen t period or to differences in periods between the application of nitrogen and the occurrence i>{ stress.

The pooled estimates of the effect of phosphorus,pes t and weed control inputsar e all significantan d conform toa priori j expectations with regard to the sign of the coefficients.Howevtr , year-to-year variation is rather high and a number of individual

Rice yield (kg pday/ha) 5000

4000 ^"""" O.ttmidoys

3000 - ^0*^

10strtt s tfoys 2000

1000

20 lira* days 0 1 1 1 1 1 1 1 20 40 60 80 OO BO MO Nitrogen opplied (kg/ho '

Fig.8.2. 2 Nitrogenrespons efunction sfo rdifferen t levelso fwate rstres s(IR-varieties ) 235 year estimates have either thewron g sign and/or are not significant.Th e effect of phosphorus application is significant and relatively large for two years.Non-significan t estimates occur for the other two years.I n accordance with previous remarks, the effect of the pest control input is rather ambiguous. For two individual year regressions,th e sign of the coefficient is positive which is contrary toexpectations .Onl y 1980show sa significant negative effect of somemagnitude .Th e effect of the weed control inputs is lessambiguous .Al l years show the expected negative coefficient, but themagnitud e of the coefficient shows a substantial between-year variation.Yiel d reduction for fields with amediu m weed infestation index under zerowee d control conditions range from 11%o f the intercept yield in 1979 to 39%i n 1981.

The above discussed pooled response coefficients are unbiased, but they are inefficient.T o calculate an efficient estimator for the response coefficients the generalized least square (GLS)estimato r must beuse d (Appendix VI). The results of GLS regression are given inTabl e 8.2.2. Both coefficients of the basic response relationship (SrN and N2)ar e somewhat higher compared with the OLS estimates.Th e higher GLS estimate for the linear nitrogen term (SrN)implie s a steeper response surface.However , the stronger increase in the quadratic termmitigate s this effect to a large extent and actually causes a decrease in the Nmax level from 130k gN for theOL S estimate to 114k g N for theGL S estimate.

Table8.2. 2 Generalizedleas tsquare sestimate so fth emea nslop ecoefficient s andordinair yleas tsquare sestimate so fth epoole dobservation s

HYV varieties BE-3 variety Variable OLS GLS OLS

SrN 0.0013 (6.99) 1) 0.0014 (7.03) 0.0010 (2.17) N2 -0.136 (3.88) -0.172 (3.84) -0.128 (1.15) Us -54.37 (3.43) -56.18 (3.41) -71.75 (2.81) lilsN -0.934 (3.24) -0.780 (2.77) 0.219 (0.31) N/(Pest+1) -3.077 (1.70) -2.418 (0.74) -1.322 (0.26) NP 0.231 (2.92) 0.197 (1.66) 0.507 (2.06) li)i/(Weed+1) -1.233 (2.56) -1.391 (2.20) -0.670 (1.15) Wi(DSR) - - -0.722 (1.53) intercept 1900 (10.99) 1838 (6.42) 2012 (4.80)

R2 0.50 0.51 s.e. 868 712 No. of obs. 391 391 90

N(max) (kg/N) 132 114 108 Max. response (kg) 2350 2220 1485 max. yield (kg) 4250 4060 3500 kg palay/kg N 17.8 19.5 13.8 1)Figure si nparenthese sar e computed t-values 236 Thelinea rstres ster mi ssimila rfo rbot hregressions ,bu tthe i interactioneffec twit hnitroge ndecrease swit h16 %indicatin ga generaldeclin ei nth eeffec to fwate rstres si nth eGL S relationship.Bot hth epes tcontro lan dth ephosphoru ster msho wa substantialdro pi nsignificanc ecompare d toth eOL Slevel .Thi s canb eexpecte d sincebot hth ewithin-yea rvariatio nan dth e between-yearvariatio no fth ecoefficient sar ehigh .

Table8.2. 3 Yield responset onitroge no fHY U ricecrop s (Irrigated fields)unde r farmers'an dexperimenta l (on-station)condition s

Year Survey data (IR36) Nmax Nresp Year Experimentaldat a (IR20)1 ) Nmax Nresp

1978 Y = 1612 + 31.30N - 0.102N2 153 2401 1969 Y = 4989 + 55.13N - 0.28SN2 97 2666 1979 = 1322 + 44.71N - 0.238N2 94 2100 1970 = 3103 * 72.00N - 0.492N2 73 2634 1980 = 1954 + 40 89N - 0.131N2 156 3191 1971 = 4039 + 31 01N - 0.180N2 86 1336 1981 = 2560 + 35.12N - 0.211N2 88 1633 1972 = 3563 t 30.66N - 0.127N2 121 1850 1973 - 3543 + 43.10N - 0.167N2 129 2781 1974 = 2848 + 53.59N - 0.297N2 90 2417 1975 = 3278 + 51.45N - 0.306N2 84 2163

Mean = 1862 + 38.01N - 0.171N2 123 2331 Mean - 3623 • 48.13N - 0.265N2 97 2264 (c.v.) (0.29) (0.16) (0.38) (0.30) (0.28) (0.20) (0.30) (0.46) (0.21) (0.23) Nresp/ Nmax (kg palay/kq N) 18.95 23.34 1) Uisayas Rice Experimental Station, Hollo Province, Philippines. Response functions are for met season, irrigated rice crop, IR-varieties. Nmax is the nitrogen level at uhich the maximum yield response is obtained and Nresp is the yield response at the Nmax level.

Theestimate d 'basic'nitroge nrespons erelationshi pfo rzer o \ waterstres san doptima lpes tan dwee dcontro lcondition si s comparedwit hexperimenta l findingsfo rirrigate d ricecrop sofj a nearbyresearc h stationi nTabl e8.2. 3 (4).I ti srathe r surprising,tha tfo rmea nlevel so fsola rradiation ,th emea n maximumyiel drespons eunde rfarmers 'condition s(irrigate d fields)i sth esam ea sth eexperimenta lresponse .However ,th e• averagenitroge nrespons eove rth erang ezero- Nt oNma xi sabou t 20%les sunde rfarmers 'condition sdu et oa highe rNma xleve l caused byth ecombine deffec to fa lowe rlinea ran dquadrati c nitrogenterm .Thi sma yindicat ea generall ylowe refficienc yi n theus eo fnitrogenou sfertilize rb yfarmer sdu et osuc hfactor s ascro pmanagement ,metho dan dtimin go ffertilize rapplication , etc. Howeverfro mth esam etable ,i ti sclea rtha ti ti sno ts o muchth enitroge nrespons etha tcause sdivergenc ebetwee n experimentalan dfarmers 'yields ,bu trathe rth eintercep tyiel d whichunde rfarmers 'condition si sabou thal fth eexperimenta l results.Thi spoint st oa noveral llowe rleve lo fcro pmanagement , possiblycause db ya muc hlowe rdegre eo fpes tan ddiseas econtro l and- t oa lesse rexten t- wee dcontrol ,plantin gdensity ,etc. ^ Farmers'cost-benefi tconsideration swit hrespec tt oinpu tus eijia y (inpart )b eth eunderlyin greaso nfo rthi slowe rleve lo finpu t use. Higherlevel so fP an dK i nexperimenta ldesign sar elikel y tob eanothe rmajo rcaus efo rth ehighe rexperimenta lyiel d intercept.

Acompariso no fth erelativ estabilit yi nth eestimate d coefficientsreveal stha tbot hth elinea ran dquadrati cnitroge n 237 coefficients under farmers' conditions aremor e stable compared with experimental results.However , their combined effect - which includes the covariance between both nitrogen terms- expressed in maximum yield response showsa higher coefficient of variation under farmers' conditions (Table 8.2.3).

8.2.5 Nitrogen response of BE-3 A substantial portion of rice land inth e area is still planted to the BE-3 variety. Apart from theearlie r indicated advantages this variety has over the recently introduced IR-varieties,on e of the main reasons farmers continue to grow theBE- 3ar e thegoo d yields that can beobtaine d with this variety.Mos t farmers argue that, under normal management conditions,th e yield potential of BE-3 is quite similar to that of the IR-varieties.Result s froma response function analysis tend to support this view (Figure 8.2.3).

Yield(ton/ha )

20 40 60 80 100 120 kgN/ha

Fig. 8.2.3 Nitrogen response functions for IR-variety and BE-3

Although modern varietiesar e definitely more responsive to nitrogen,als o under local conditions,th e BE-3 variety still reachesa maximu m yield of 3.5 t/ha compared to4. 3 t/ha for the modern varieties.BE- 3 has a slightly higher yield when no fertilizer isapplied , butmea n response to themaximu m N-level (108k g N) isabou t 20%les s compared with themea n response of IR- varieties for themaximu m N-level of 132k g N.Th e significant and more pronounced effect of applied phosphorus on nitrogen reponse for theBE- 3 israthe r unexpected, butma y be due to a severer phosphorus deficiency in the plain areaswher e this crop is usually grown.

Varieties also differ with respect to the influence of water stress on yield.Althoug h in both cases onewoul d expect water 238 stresst oadversel yinfluenc enitroge nresponse ,i ncontras twit h themoder nvarieties ,n osignifican teffec to fwate rstres so n nitrogenrespons ewa sfoun dfo rth eBE- 3variety .However ,th e' influenceo fwate rstres so ntota lyiel di ssubstantia la s indicated byth esignifican tcoefficien to fth ewate rstres s variable.Th emagnitud eo fthi scoefficien t issubstantiall y highertha nth ecoefficien t forth eIR-varieties .Thi sfinding , however,shoul db ecarefull yconsidere da sth eoccurrenc eo fwaite r stressi srar efo rBE- 3crops .Durin gth efou ryea rsurve yperiod , a severestres ssituatio noccurre donce ,clearl yt oth esurpris e offarmers .I nth e197 9cro pseason ,lo wmoistur econdition s startedt odevelo pi nth emont ho fSeptember ,a tth een do fwhic h monthfarmer susuall yappl yfertilize rt oBE- 3crops .Applicatio n offertilize rwa sdelaye d by3 t o4 week san dfarmer sgav ebelo w normaldosages .A subsequen tdrough tafte rfertilizatio nprevente d farmersfro mapplyin ga secon ddose .Hence ,fo rBE- 3sever ewate r stresstend st og otogethe rwit hlo wlevel so ffertilize rgivin g riset oth enon-significan t interactionbetwee nwate rstres san d fertilizer.

Thenegativ eeffec to nyiel do fth enon-applicatio no fwee d controlinput si ntransplante d BE-3crop si sabou thal fwhe nBE- 3 isdr yseeded .Thi sshow sth esurpressin geffec ttransplantin gha s onth eleve lo fwee dinfestation .Fo rdr yseede dBE- 3crops ,th e effecto fwee dcontro linput si sver ysimila rt odirec tseede dHY V cropsa sindicate db yth ecombine deffec to fth etw owee dcontro l variablesi nth eBE- 3respons erelationship .Pes tcontro linputf c appeart ohav eles sinfluenc eo nyiel dan dar eno tsignifican tfo r similarreason sa smentione d forth emoder nvarieties .

8.3 Assessingth eris ko ffertilize rus e Onth ebasi so fth eabov ederive d responserelationships ,i ti s nowpossibl et oestimat eth evariabilit yi nnitroge nrespons efd r anyleve lo fnitroge ngive ncertai nvalue sfo rth enon-nitroge n relateddecisio ninpu tfactors .Th eestimatio nprocedur einvolve s twosteps .I ti sbes tunderstoo d interm so fth etw ocomponent so f responsevariabilit ytha tca nb edistinguishe d inth eabov e described responsespecification :

.A specifi cvarianc ecomponen tcomprisin gth erespons e variabilitydu et oth eeffec to fth estochasti cvariable s ' (riskfactors )tha tar einclude di nth erespons e relationship:wate rstres san dsola rradiation . .A rando mvarianc ecomponen twhic hcontain sth erespons e variabilitydu et oth erando mvarianc eo fth eregressio n coefficients.Thi svarianc ei sassume dt ofin dit smai n sourcei nunspecifie d riskfactor sinfluencin gth efertilize r responserelationship .

Yieldris kdu et oth eincidenc eo fwate rstres sdurin gth e reproductivegrowt hperio d I Theabov ederive drespons erelationship sindicat eth eprofoun d 239 effectwate rstres sma yhav eo nth eyiel do fric ecrop sdurin gth e reproductivegrowt hstage .Below ,th esimplifie d response functionsfo rHYV san dBE- 3ar egiven .The yonl yinclud enitroge n andwate rstres sa svariables .Th eothe rvariable sar ese ta t theirmea nvalue .I norde rt oallo wa compariso nbetwee nth eGLS - functiono fth eHY Vcrop san dth eOLS-functio no fBE-3 ,a n adjustmentha dt omad ei nth ecoefficient so fth eBE- 3respons e function.W eopte dfo ra nadjuste dBE- 3function ,rathe rtha nt o useth einefficien testimate sfro mth eOLS-regressio n forth eHY V crops.Th eadjustmen twa smad eo nth ebasi so fth epercen tchang e inmagnitud eo fth ecoefficient sbetwee nth eOL San dGL Sestimate s ofth eHY Vrespons efunction .

HYV (1st):Y = 183 8+ 39.05 N- 0.172N 2- 56.18W s- 0.78Ws N (7a) BE-3 :Y = 194 6+ 30.05 N- 0.161N 2- 74.14W s- 0.18Ws N (7b)

Forbot hHYV san dBE- 3i ti sestimate dtha tfo ra mediu mnitroge n levelo f6 0k gN fo reac hstressda youtpu ti sreduce d by10 0k g palay.However ,i ncontras twit hHYVs ,th eeffec to fwate rstres s onyiel do fBE- 3i smuc hles sdependen tupo nth eleve lo fapplie d nitrogen.

Todetermin eth eeffec to fth estochasti cvariable so nrespons e variability,th evalue so fth estochasti cvariable shav et ob e pluggedint oth erespons efunctio nan dth eassociate d responsefo r selected levelso fnitroge nneed st ob ecalculated .Th e probabilityo foccurrenc eo fsuc h 'responsestate 'i sgive n byth eprobabilit yo foccurrenc eo fit sassociate d 'waterstres s state'.I nthi swa ya probabilit ydistributio no fyiel drespons e fordifferen tlevel so fnitroge nca nb eobtained .

Analternativ eapproac hi st odetermin ea 'variancefunction 'o f responsewhic hdirectl yrelate sth evarianc eo fth estochasti c variablest oth evarianc ei nresponse .Give nth esimplifie d responserelationshi pfo rHYV s

YR(i)= 39.0 5N - 0.17 2N 2- 0.7 8Ws(i) N+ +0,19 7N P- 2.4 2N/Pes t (8) whereYR(i )i sth enitroge nrespons edependen tupo nth estochasti c valueo fwate rstres s 'state'(i )conditiona lo nth einpu tlevel s ofnitroge n (N),phophoru s (P),an dpesticide s (Pest),th e varianceo fthi srespons ei sgive nb y

2 Var (YR| N,P,Pest)Ws = 2 P(i)* (YR(i )- E(YR)) (9) whereP(i )i sth eprobabilit yo fth eoccurrenc eo fth eit hwate r stressstate .Substitutin g (8)i n(9 )w ege t

Var(YR IN,P,Pest ) „= £P(i )* (-0.7 8Ws(i) N+ 0.7 8E(Ws)N) 2 ws ,_, = (0.78N) 2* £ P(i)* (Ws(i )- E(Ws)) 2 (10) i-1 240 Hence,th evarianc eo fnitroge nrespons eca nb edirectl yrelate ^ toth evarianc ei nth enumbe ro fwate rstressday sand ,du et oth e particular specificationo fth erespons eequation ,i sfunctionall y relatedt oth esquar eter mo fnitrogen .O fcourse ,i na simila r way,i ti spossibl et ospecif yan yothe rmomen to fth enitrogen , responsedistributio na sa functio no fnitroge nan dwate rstress .

Frequencydistribution so fth eoccurrenc eo fdifferen twate r stressstate swer egenerate db yrunnin ga time-serie so f5 4yeai a ofrainfal ldat afro ma nearb yrainfal lstatio nthroug hth ewate r balancesimulatio nmode lmentione dearlie r (Boltonan dZandstra , 1980).Fo rbot hth efirs tan dsecon dric ecrops ,th esimulate d dateo fplantin gwa smad econditiona lo nsufficien twate r availability forlan dpreparatio nan dcro pestablishment .T o determineth elengt ho fth elan dpreparatio nperiod ,simila r parameterswer euse da sfo rth ecroppin gpatter nsimulatio nmode l describedearlier .I norde rt oinvestigat epossibl eestablishmen t dateso fsecon dric ecrops ,th eharvestin gdat eo fth efirs trift e cropwa sfixe da t3 week sinterval sTh eoccurrenc eo fwate rstres s forsecon dric ecrop sdepends ,t oa larg eextent ,o nth edat eo f plantingwhich ,i nturn ,depend so nth edat eo fplantin go fth e firstric ecrop, .Wate rwa sdraine d toa leve lconsidere dfeasibl e duringth eharvestin goperatio no fth efirs tcrop .Lan d preparationfo rth esecon dcro pcoul dstar tafte ra sufficien t amounto fwate rha daccumulate d andcontinue di fa certai n moistureleve lcoul db emaintained ,followe db ycro p | establishment.

Ricecrop swer econsidere dno tt oyiel dwhe nmor etha n3 0 stressdaysha doccurred .Althoug hthi sma ysee mt ob ea n optimisticassumptio n (three-fourthso fth ereproductiv egrowt h stage),i tdoe sno timpl ytha tth ecro pi sunde rsever estres s conditionsdurin gth eentir eperiod .Sinc ewate rstres si sdefine d tobegi nwit ha soi lmoistur econditio nwhe nplant sstar tt o experienceproblem swit hextractin gsoi lmoisture ,th eseverit yo f waterstres swil lincreas ewit hth eduratio no fa continuou s stressperiod .Consequently ,wate rstres si sno ta homogeneou s inputvariable .However ,th elikelihoo do fa continuou sstres s periodwil lincreas ewit hth eduratio no fth estres speriod .

Table8.3. 1 showsth eresult so fth ewate rstres ssimulatio nfo r directseede d firstHY Vcrops .Excep tfo rth esideslop eposition , noneo fth eric ecrop sru nth eris ko fcomplet efailur edu et o waterstress .I nth esam etabl eoptima lN-level san dassociate d predicted yieldsar egive nderive d fromth eearlie restimate d responseequation s(7a )an d (7b),takin gint oaccoun texpecte d waterstres slevel san dth emea n(deflated )nitrogen/pala ypric e ratioove rth efou ryea rsurve yperiod .Thi spric erati oals o includesth ecommo nharvestin g sharearrangemen tan dcos to f capital.Th erelativ evariatio n (indicatedb yth ecoefficien to f variation)i nnitroge nrespons ei shighes tfo rth esideslop earep s anddecline sa sth ewate rsuppl yt ofield simproves . 241

Table 8.3.1 Simulated mater stress levelsb ylan d unit Prob. Prob. Pred. c.v. Land unit E(li)s) SD(lils) (Us 1) (Ills-25 ) Nopt yield yield (day) (day) (*) (« (kg) (ton) HYV (1st crop) sideslope 12.3 9.4 13.0 11.0 63.5 2.3 0.42 plateau rainfed 6.7 7.8 33.3 3.7 76.1 3.0 0.29 plain rainfed 3.5 6.4 61.1 1.9 83.4 3.5 0.22 waterway 1.7 5.3 61.1 0 87.5 3.7 0.18 part, irrigated - - - - 91.4 4.0 -

BE-3 plain rainfed 2.6 5.2 64.0 0 69.5 3.1 0.13 waterway 1.8 4.9 82.0 0 69.5 3.1 0.12 E(Lls)i sth emea n number ofwate r stress days;SD(li)s )i sth estandar d deviation; Prob. (li)S 1)indicate sth eprobabilit y thatth enumbe r ofwate r stress daysar e lesso requa lt o1 ;Prob .U S 25)indicate sth eprobabilit y ofwate r stress days being2 5o rabove ; Nopti sth eeconomi c optimum fertilizer level;Pred . yieldi s predicted yield forth eeconomi c optimum fertilizer level;an dc.v . yield isth e coefficient ofth epredicte d yield level.

Despiteit slate rharvestin gdate ,th eris ko ffertilizatio no f thetraditiona lBE- 3crop si srelativel ylow .Thi sappear st ob e primarilydu et oth ewea kinteractio nbetwee nnitroge nan dwate r stress,probabl yresultin gfro mth elat eapplicatio ndat eo f fertilizeri nBE- 3crops .Als oth eincidenc eo fwate rstres si nBE - 3crop si slo wbecaus ethes ecrop sar eusuall ygrow no nth elowe r parto fth etoposequence .Sinc eearl yapplicatio nwoul dresul ti n excessivevegetativ egrowth ,farmer susuall yappl yfertilize r aroundth ethir dwee ko fSeptember ,th edat eo fth eannua lfiest a ofth enearb y town.A tthi stime ,plant shav ea considerabl e heightallowin gth epondin go fa substantia lamoun to fwate ri n ricefield swhic hfo rBE- 3ar eusuall yconfine dt oplai narea s whichallo wrelativel yhig hbunds .I fsufficien twate ri s availablea tthi stime ,wate rstres si sno tlikel yt ooccu rdurin g thereproductiv estage .I fwate ravailabilit y isinsufficient , farmersma yadjus tfertilize rlevel sdownward san dwai tfo r sufficientwate rcondition st ooccu ra ta late rstage ,afte rwhic h theystil lhav eth eoptio nt oappl ya nadditiona ldosag eo f fertilizer.Hence ,o nth ebasi so fwate ravailabilit yi n September,farmer sma yreduc eretur nris kt onitroge nb yadjustin g fertilizerlevel st oactua lwate rcondition sa tth etim eo f fertilization,i.e. ,th ewate rstres seffec twork sprimaril y throughth eintercep tterm .

Incontrast ,earl yapplicatio no ffertilize ri nth ecas eo fmoder n varietiesi simportan tt oinduc etillering .Sinc eapplicatio n occursa ta stag ewhe nplant sar estil lsmall ,onl ya limite d amounto fwate rca nb eaccumulate d inth efield .Hence ,a tth e timeo fth efirs tfertilize rapplicatio nth elikelihoo do fwate r stressdurin gth ereproductiv egrowt hstag ei sunpredictable ,an d consequently,adaptatio no ffertilize rlevel sdoe sno toccu ra si s 242

Table8.3. 2 Simulatedmate r stress levelsb y landuni t andplantin gdat e . Prob. Prob. Prob. Pred. c.u. ; Landuni t E(Us) SD(Us) (Us 1) (Us 25) nopi . Nopt yield yield1 (day) (day) (*) (*) ($) (kg) (ton) week3 9 rainfed 11.2 11.6 29.8 19.1 6 56.4 2.2 0.53 waterway 7.7 10.9 44.9 12.2 2 64.3 2.6 0.44 part,irrigate d 4.5 8.1 59.2 6.1 2 71.6 3.0 0.30 week4 2 rainfed 17.8 11.3 9.3 37.2 14 41.4 1.5 0.69. waterway 13.0 12.0 24.4 28.8 8 52.3 2.0 0.59 part,irrigate d 8.5 9.3 29.8 8.5 6 62.5 2.5 0.39 week4 5 rainfed 25.0 9.3 0 74.3 30 25.1 0.7 0.95' waterway 22.2 10.2 5.1 53.8 22 31.5 1.0 0.81 part,irrigate d 17.4 11.6 4.9 39.0 18 42.3 1.5 0.56

E(Us)th ei smea nnumbe ro fwate rstres sdays }SD(Us )i sth estandar ddeviation ; Prob.(U S 1)indicate sth eprobabilit y thatth enumbe ro fwate rstres sday sar eles so r \ equalt o1 ;Prob .U S 25)indicate sth eprobabilit yo fwate rstres sday sbein g2 5o r above;Prob .n opi .give sth eprobabilit y thatsecon dric ecrop scanno tb eplanted ;Nop t \ isth eeconomi coptimu mfertilize rlevel ;Pred .yiel d ispredicte dyiel dfo rth eeconomi c optimumfertilize rlevel ;an dc.v .yiel di sth ecoefficien to fth epredicte dyiel dlevel . thecas ewit hth etraditiona lvariety .

Theoccurrenc eo fwate rstres si nsecon ddirect-seede dHY Vcrop i largelydepend so nth edat eth ecro pi sestablished .Fro mTabl e[ j 8.3.2 itca nb esee ntha tth eprobabilit y thatwate rstres socciir s aswel la sth eduratio no fth estres sperio d sharplyincrease si s theseedin gdat ei slater .Th erelationshi pbetwee nstressday san d plantingdat ei smor eo rles slinea rindicatin g increasingrisk;i n termso fa nincreasin gchanc eo fa highe rloss .A simila rlinea r relationshipbetwee npredicte dgrai nyiel dan dplantin gdat ewa s foundb yBolto n (1980).

Theutmos timportanc eo ftimel yplantin gi sdu et oth enatur eo | thewe tseede dmetho d ofcro pestablishmen tan dth eparticula r patterno flat eseaso nrainfall .Durin gth einitia lgrowt hperio d ofwe tseede dric ecrops ,th ewate rleve li nth efiel dca nonl yIb e increasedgraduall ywit hth egainin go fheigh to fth eric e seedlings.Thus ,secon dric ecrop sar ever ymuc hdependen to nth e erraticlat eseaso nrainfal lmainl yconsistin go fa numbe ro f widelyscattere dperiod so fheav yrainfall .I fsuc hrainfal l i cannotb estore di nric efield sbecaus eric eplant sar estil lto o small,o ri fth eroo tsyste mha sno tbee ndevelope denoug ht o reachth erecedin ggroun dwate rtable ,prolonge d periodso fwate r stressar elikel yt ooccur .

Thisresult si na rathe rpeculia rshap eo fth efrequenc y distributiono fwate rstres sdistribution .A considerabl eportio n ofth eprobabilit yweigh ti seithe rfoun di nth euppe ro rlowe r tailo fth edistributio no ri nbot hdependin go nth edat eo f seeding.Moreover ,becaus ew ear edealin gwit ha frequenc y > 243 distributionwit htw odistinc tend-point s (i.e.,zer ostres san d stresscausin gcro pfailure) ,ther ei so fcours ea tendenc yfo r theprobabilit ydistributio nt ograduall ychang eit sshap efro m beingskewe d toth elef tfo rth eearl yseede dcrop st obein g skewed toth erigh tfo rth elat eseede dcrops .Becaus eo fth e skewnesso fth eprobabilit ydistributio no fyield ,representin g risko fwate rstres swit ha varianc emeasur eis ,t oa larg e extent,inadequat e(5) .

Yieldris kdu et oothe renvironmenta lfactor s Aswa sindicate dearlier ,t oth eexten ttha timportan tris k factorsar eno tinclude d inth erespons efunction ,suc huncertai n variableinfluence sar etranslate d intounstabl erespons e coefficientsove rth eyears .O nth ebasi so fth evariance san d covarianceso fth eestimate d responsecoefficients ,th eremainin g parto fth eyiel drisk ,i.e ,ris kdu et o environmentalfactor s othertha nwate rstress , canb eassessed .Th evariance-covarianc e matrixo fth erespons ecoefficient sca nb eestimate dthroug h equation6 give ni nAppendi xVI .Base do nth evarianc emeasur e

2 Var(YR I X)RCR =X 'd X (11) 2 whered isth evariance-covarianc ematri xo fth eslop e coefficients (Table8.3.3 )an d 'X'i sth evecto ro findependen t variablesinclude d inth eregression ,w eca nderiv ea 'varianc e function'o fresponse ,whic hgive sth evariabilit yi nyiel d responsedu et oris kfactor sothe rtha nwate rstres sfo ran y combinationo findependen tvariables .Unfortunately ,thi s additionalris kanalysi sca nonl yb ecarrie dou tfo rHY Vcrops . Insufficientdat afo rBE- 3prevente d theestimatio no fth e

Table8.3. 3 Variance-covariance andcorrelatio n matrixo fth eindividua l year regression coefficients

SrN Us WsN N/(Pest+1) N2 NP Wi/(Ueed+1) ('00,000) COO) (*000) Coo) Variance-covariance matrix SrN 352 Us 15.1 313 UsN 153 -315 527 N/(Pest+1) -24.2 15 -87.6 31.2 N2 -667 536 -547 -79.8 3120 NP -275 -105 -110 54.7 134 300 Uli/(liteed+1) 4.48 14 17.1 2.67 4.19 -4.38 0.844

Correlation matrix Ills 0.05 UlsN 0.36 0.78 N/(Pest+1) -0.23 0.15 -0.68 N2 0.64 0.54 -0.43 -0.26 NP -0.85 -0.34 -0.28 0.57 0.14 Uli/(Uleed+1) 0.26 0.86 0.81 0.52 0.08 -0.28 244

; Var (Yr)RCR»0

1000 Stressday s Variance of Nrespons e fordifferen t levelso f waterstres s

500

n —i-^l^^^ 1 i

C.V. = O*(YR)RCR/E(YR) 1.0

Relative variance of N response for different Stressday s water stresslevel s 80

60 / 8/

.40 — ^^^ ^ ^O^ji"

20

till 1 20 40 60 80 100 120 Nitrogen applied (kg/ha)

Fig.8.3. 1 Thevarianc ean dcoefficien t ofvariatio no fnitroge n responsedu et oth einfluenc eo fwate r stressfo rdifferen t levels of u/aterstres s incidence (IR-varieties) 245 variance-covariancematri xo fth eslop ecoefficients .

Sincew ear eonl yintereste dher ei nnitroge nrespons e variability,w eomitte dfro mth evarianc efunctio nthos evariable s havinga constan tcontributio nt ovariance ,i.e. ,thos evariable s thatd ono tinterac twit hnitroge n (Wsan dWi/Weed) .Wit hn o phosphorusinput ,an dth epes tcontro linpu tvalue da tit smea n value,th evarianc efunctio nfo rth eHY Vcrop sca nb ecompute d throughmatri xmultiplicatio n (equation 11). Iti sgive nb y

2 3 Var (YR(i)lN.P.Pest )RC R =36.0 9N + 26.9 9N - 0.18 5 N

+0.0031 2N 4+ (4.62 5N + 0.93 5N 2- 0.0054 7N 3)WS(i )

+(-3.1 6N + 0.052 7N 2)Ws(i) 2 (12)

Theeffec to fnitroge nus eo nth erespons evarianc efo rdifferen t levelso fwate rstres si sdepicte d inFigur e8.3.1 .I tshow stha t therespons evarianc edu et oris kfactor sothe rtha nwate rstres s sharplyincrease swit hincreasin g levelso fnitrogen ,bu ttha ti t ismor eo rles sindependen to fth ewate rstres slevel .However ,i f therespons evarianc ei sevaluate d relativet oth eyiel drespons e (indicated byth ecoefficien to fvariation) ,substantia lincrease s occuri nrespons evariabilit ywit hincreasin glevel so fwate r stress.

Overallnitroge nrespons eris k Finally,whe nth evarianc efunction s(10 )an d (12)ar ecombined , thejoin tfrequenc ydistributio no fnitroge nrespons efo ran yric e crop/landuni tcombinatio nca nb edetermined ,indicatin gth e nitrogenrespons evariabilit ydu et owate rstres san dothe r(non - specified)ris kfactor s(Huijsman ,1980) .Fo rtw olan dunits ,th e totalrespons evariabilit yan dth ecoefficien to fvariatio nfo r firstwe tseede dHY Vcrop sar edepicte di nFigur e8.3.2 .Fo rth e samelan dunit ,cumulativ edensit yfunction so fne treturn st o nitrogenfo rdifferen tlevel so fnitroge nar egive ni n Figure8.3.3 .

8.4 Farmers'perception san dattitude stoward sris ko f fertilizerus e Abovei twa sempiricall yestablishe d thatunde rrainfe d conditions,th eris ko ffertilize rus esubstantiall yincrease s withincreasin grate so fapplie d fertilizer.Th equestio ni sd o farmersals operceiv esuc hris kan dd oris kperception sdiffe r amongfarmers ?A searl ya s1964 ,Misr a(1964 )hypothesize d thati n decisionsabou tth eselectio no fagricultura ltechnique sfarmers ' outcomeperception san dfeeling sabou tth erisk sassociate dwit h techniqueswer eimportan tfactor sexplainin gobserve ddifference s inactua lapplie d fertilizer levelsamon gfarmers . 246

c.v. = cr( Y R1 TOT/E(YR) 1.00

Relative variance ofN respons efo r .80 two land quality groups

.60 - Rainfed plateau E(Ws)=760

.40

.20 ="

Irrigated:E(WsK >

20 40 BO 80 100 kgN/ha Fig.8.3. 2 Coefficiento fvariatio no fnitroge n responsedu et o theoveral l influenceo fris k factorsfo rrainfe d plateauan d irrigated fields (first crop, IR-varieties)

Cumi loftve probaftMv 60 N BON OON 100

.80

60 Jy

40

JO,

1y 1 F i 1 i i 20 24 Pesos

Fig.8.3. 3 Cumulative density functionso fne treturn st o nitrogen (rainfed plateau fields,IR-varieties ) 247 8.4.1 Farmers'perceptio no ffertilize rrespons e Limited researchexperienc eha sbee nobtaine d sofarwit hth e elicitationo ffarmers 'yiel d perceptions.I nSectio n3.3.1 , biasesan dproblem ssurroundin g theelicitatio na swel la s interpretationo fretur nan dris kperception swer ediscussed .Th e employedtechnique sar estil llargel yexperimental ,particularl y whenapplie dwithi nth econtex to fsemi-subsistenc efarmers . Carefulinterpretio no fresult so fan yemploye delicitatio nmetho d isthu swarranted .Further ,fo rthi sparticula rstudy ,th eabsenc e ofexperience d researchersi nth efiel do fapplie dpsycholog yan d anthropologydurin gth efieldwor kperio dwa sfel ta sa sever e drawbackwit hrespec tt oth einterpretatio no fobservation smad e duringth einterview sa swel la sth eresult sderive d fromthes e interviews.Consequently ,th efinding spresente dbelo war e inevitably,t oa larg eextent ,speculative .

Dynamicyiel dexpectation s Aninitia lattemp tt oelici tfarmers 'feeling swit hrespec tt o riceyield sinvolve d thesimpl eprocedur et oas kfarmer sa ttwo - weekinterval st oexpres sthei rfeeling sconcernin gth eric e yield,give nth eactua lstan do fth ecrop ,i nterm so fth ebes t possible,wors tpossible ,an dmos tlikel yyiel d (i.e.,a triangulardistributio n (TD))t ob eexpecte d foral lthei rmajo r ricecrops .Th emai npurpos eo fthi srelativel yintensiv esurve y techniquewa st oshe dmor eligh to nth eissu eo fho wyiel d expectationsdevelope ddurin gth ecro pgrowt hcycle ,i.e. ,whethe r andho wfarmer sadjus tyiel dperception si nth ecours eo fcro p development,specificall y underadvers eenvironmenta lconditions , andwhethe r suchexpectation srelat et oactua ldecision smade . Sinceexpectation swer eformulate d foractua lcro psituations ,i t wasexpecte d thatfarmer swoul dfin di tles sdifficul tt oexpres s themselvescompare d toimaginar y situations.T oavoi danchorin go n previousexpectations ,farmer sha dt oformulat e'fresh ' perceptionseac htime ,withou tbein ggive nthei restimate so ftw o weeksbefore .I nth ecours eo ftw oyear sth efollowin g observationswer emade :

First,farmer swer ereluctan t (orfoun di tmeaningless )t oexpres s yieldexpectation sprio rt oth estag etha tth ecro pwa sfull y established,i.e. ,tw ot othre eweek safte rseedin gi ncas eo fwe t seededcrops .Initia lcro pestablishmen ti ssee na sa critica l staget ofurthe rcro pdevelopmen ta si tdetermines ,t oa larg e extent,bot hth edegre et owhic hth ecro pca nwithstan dfutur e adversecondition ssuccessfull yan dth einput sneede dfo rweedin g andreplanting .Sinc efarmer sappea rt orequir eth eactua lcro p statuso nwhic ht obas ethei rexpectations ,i tappear sdoubtfu l whetherexpectation sformulate dprio rt ocro pestablishmen tar e relevantt odecision smad elate ri nth egrowt hcycl eo fth ecrop .

Second,farmer sha ddifficult yi nexpressin gth e 'mostlikely ' yieldestimate .Thi si srathe rsurprisin ga son ewoul dintuitivel y expectthi sparticula ryiel dexpectatio nt ostrik efirs ti nth e 248 mind of farmersa s it iscloses t towha t farmersusuall y obtaini However, in rainfed areas,moda l valuesma y not be clear in yield distributions.Furthermore , the concept presupposes that farmer4 think in probabilistic termsan d combine yield information over a considerable number of years.I tappear s that farmers base their perceptions of a 'most likely' yield on a conservative estimate;o f the best yield they (or their father)eve r obtained.Tha t is,thje y have a strong tendency toancho r on the 'best possible'yiel d aqd then toadjus t downwards toarriv e ata 'most likely' yield expectation. Given this observation, it is questionable whether 'most likely' yield perceptions or,alternatively ,moda l valueso f yield distributions have an operational meaning in actual decision making.Thi s observation supports thevie wo f Shackle (1961)tha^ t farmers perceive yield variability in terms of simple ranges rather than in terms of a number of particular yield levels with attached probabilities.

Third, hypotheses regarding the adjustment of yield expectations! in thecours e of crop development were at odds with actual findings.Th e initial yield range perceived by farmers was expected toinclud e all later expectations,wherea s the perceived yield ranges were expected to become smaller the closer the crop would be to the stage ofmaturity .Tha t with the passage of time uncertainty with respect to final yield would decrease and, consequently, inputapplication s at the later growth stages of the rice cropwoul d be considered lessrisk y compared to inputs attlfi e beginning of the crop growth period.

With respect to the first issue,i twa sa commonly observed phenomenon that end-points of later perceived ranges were above<} r below the end-points of the initial perceived range.I t appears that instead of taking into account all possible yield levels inI their initial yield range expectations,farmer s rather perceive d section of the potential rangewhic h lieswel l within themi d of• this range.The y seem to focus on a 'most likely' yield range based on a normal crop development given the initial stand ofthe i crop and planned levels of inputs,rathe r than taking into account low probability yields at the tailso f the yield distribution. Depending on actual crop growth development,range s are subsequently adjusted upward and downward or -mor e commonly - only one of the end-points isadjuste d in consecutive expectations.Figur e 8.4.1 showsa number of examples of how farmers adjusted yield expectations in reaction to the occurrence of water stress in dry seeded rice crops.Unles s a severe stressi situation develops,zer o yield expectations are not included in farmers' perceptions,no t even for the second rice cropswhic h are generally considered by farmers to be risky. If a severe stress , situation occurs,farmer s are reluctant to express any expectation atall .

Although, the hypothesized tendency that the 'best possible'an d 'worst possible'yiel d expectation would converge in the course of crop growth was generally apparent,perceive d yield ranges still, 249

Yield expectation (l/ho) But Most - lltoly

Actual yield _ Wont 22 t/ho

Form19 * .ItaplorTt—SET*^ 1 • 1 1 1

Aug Sep Oct

Fig.8.4. 1 Adjustmento ffarmers 1yiel dexpectation s inth ecours eo fcro pdevelopmen t(1979 )

remained fairly wide until harvesting.I tshoul d berealized , however, thatth eexten t towhic h such convergenceca nb eexpecte d dependso nth edistributio n ofth evariou s risk factors overth e growth cycleo fth eric e planta swel la sthei r relative importance interm so fthei r likely effecto nyield .A sindicate d earlier,health y vegetativecro p growthi sa nessentia lbu tno t the only condition forhig h yields.Fina l yields critically depend on thepanicl ean dspikele t stagewhic h occursa tabou t two-thirds of thelife-cycl eo fth eplant .An ystres s exerted onth eplan t during this stagema ycaus e substantial yield reduction. Furthermore,eve ni fa cro p reaches full maturity, accurate estimateso ffina l grain yieldma yb edifficul t tomak e because grain yields depend ona combinatio n offactor s sucha sstan d density, paniclean dspikele t numbera swel la sth epercentag eo f properly filled grains.Thes e factors often showa hig h within- field variation caused bydifference si nwate r depthan dspo t infestationso fpes tan ddiseases .Finally , farmerswh oar eno t experienced inth ecultivatio n ofmoder n varietiesma yfin di t difficult toestimat e final grain yields becauseo fth edifferen t plant type. 250 Although, farmers do not seem to actively anticipate adverse crop conditions, they do at least not reveal such attitude in their yield expectations, such observation should bemad e carefully because of the possibility of semantic inaccuracies in the questioning procedure. The local dialect lacks words to exactly translate probability heuristics used in the survey technique.! Concepts like 'themos t likely' translate into local expressions such as husto lang (it is normal)o r igo-igo lang (it is enough), whereas 'worst possible' translates into 'very bad' (minus or pigaw). The exception forms the 'best possible' heuristic for which the local dialect has the expression jackpatan (you win the jackpot). Partly due to these semantic inaccuracies there is a danger of range contraction bias, especially because of too optimistic expectations at the lower end of the range. Although, it was initially indicated to farmers that 'worst possible' could also include zero-yield expectations, thiswa s not repeated during the survey to avoid the potential danger of steering perceptions into a certain direction.

Contraction of perceived yield ranges An attempt was made to investigate the relative magnitude of this bias. A number of farmers were asked to evaluate yield variability using a technique known as the 'visual counter (VC)method' . A chart is prepared showing a number of discrete intervals along a yield range.Th e yield range given by the maximum and minimum yield level is ascertained from the farmer.Th e farmer is then given a number of counters (e.g. 25 matches). He is requested to allocate the counters over the intervals along the yield range }n such a way that, if he believes a certain yield interval to occur more frequently than another, he puts more counters in that interval.Th e ratio of the cell frequencies to the total number of counters indicates the probability of the corresponding yield interval. The probabilities may be accumulated at each cell, and when plotted against the yield range, a cumulative density function can be drawn.

It was expected that this method would result in more reliable responses. Since zero-yield levels are automatically included as outcome possibility, farmers are forced to think about low probability events.Furthermore , farmers can take more time ini contemplating and reflecting upon their yield expectations. Before farmers were actually able to apply the method, a considerable effort in explaining the technique was required and in most cases an example had first to be shown which, of course,ma y have biaSeki farmers' responses.Th e manner in which farmers reacted to the i technique differed substantially. Certain farmers found it quite interesting and carefully distributed the counters over the yield range, whereas others found it (but politely did not say so)the 1 craziest thing they ever did in their lives. In general, it was felt that - in spite of the fact that it was related to an actual crop situation - the technique was too abstract as indicated byj a young farmer who exclaimed: 'how can you expect me to think in | terms of 25 years (the number of counters used). I am only farming for 6 years!'. j ! 251 Although,mos tfarmer sfinall ycomplie dwit hth emethod ,i t remainsquestionabl ewha tth evalu ei so fth eresultin gcumulativ e densityfunction .Sinc eth emetho di sbase do nth eassumptio ntha t farmersca nattac hprobabilit yweight st oth eoccurrenc eo f different 'states'o fa continuou svariabl e (yield),th eresultin g distributionma yimpl ya certai nsophisticatio ni nfarmers ' abilityt oasses sth eoccurrenc eo funcertai nevent swhic hi s simplyno tvalid .However ,th eendpoint so fth edensit yfunctio n maybette rreflec tth epotentia lyiel drang efarmer sperceive . Table8.4. 1 showsa compariso nbetwee nyiel drang eexpectation s elicited throughth e 'triangulardistribution '(TD ) methodan dth e 'visualcounter '(VC )metho d fora sampl eo f1 9 farmersgrowin gBE- 3crop si nth eseaso no f1980 .

Table8.4. 1 Comparison between yield expectations (ton/ha)elicite d throughth e 'triangular distribution' (TD)metho d andth e'visua l counter' (VC)method ,BE- 3 rice variety (19respondents ) Yield expect. VC TD Most Average %differenc e within likely (NL) 2.16 (0.37)1 ) 2.28 (0.47) (abs.)betwee nT D = 6.5*; 10* range =76 * andV CNL-value s Worst Average probability within possible(UP ) 0.26 (0.32) 1.47 (0.39) UP(VC)tUP(TD ) 19.9*; 15-30*rang e =76 * Best Average probability within possible(BP ) 3.72 (0.39) 3.16 (0.49) UP(VC)*UP(T0) 9.5*; 0-15* range = 82* 1) Figuresi nparenthese sar ecoefficient so fvariation .

Itappear stha tth eTD-metho dresult si na mor eo rles ssystemati c contractiono fth eexpecte d yieldrang ewhe ncompare dwit hresult s derivedthroug hth eVC-method .I ncontras tt oth eforme rmethod , expectationselicite d throughth eVC-metho d frequentlyinclud e zero-yieldoutcomes ,albei ta tlo wprobabilit y levels.Visua l comparisono fth eV Ccumulativ edensit yfunction swit hth e discretevalue so fth eT Ddistributio nlearn stha tth eprobabilit y oflowe rtai lVC-value sfallin gbelo wth e 'worstpossible 'TD - expectationi sabou t20 %o naverage .O fth euppe rtai lVC-values , roughly 10%ar eabov e 'Bestpossible 'TD-expectation .Thi sfindin g appliest omos tfarmers .Fo rroughl ythree-quarter so fth e farmers,lowe rtai lVC-value sar ebelo wth e 'worstpossible 'TD - expectationi nth eprobabilit y rangeo f1 5t o30% ,wherea suppe r tailVC-value sar eabov eTD-expectation si nth erang e0 t o15% . The 'mostlikely 'expectation sare ,o naverage ,ver ysimila rfo r bothmethods ,bu tfo rsom efarmer sdeviation sbetwee nbot htype s ofexpectation sar esubstantial .Still ,i nmos tcase sth e'mos t likely'TD-expectatio ndoe sno tdiffe rmor etha n10 %fro mth e modalvalu eo fth eVC-distribution .

Sinceexpectation sar einfluence db yth etyp eo felicitatio n method,th equestio narise swha ttyp eo fexpectation sma ybes t representfarmers 'feeling swit hrespec tt oyiel duncertaint yi n actualdecisio nmaking .Give nth elikel y situationtha tfarmer s 252 perceive yield uncertainty in terms of ranges and base their i decisions on 'best'an d 'worst'outcomes ,th e question iswha t elicited yield range best reflects farmers' feelings.T o the extent that differences between methods are systematic - as it, appears to be in thiscas e - for practical reasons such question may not require specific attention since,irrespectiv e of what yield range perceptions are used, choices would be identical inI both cases.However ,t o facilitate choice between certain typeso f risky alternatives,a probability based truncation of the yield range may be required. It is,fo r example,quit e easy to construct two alternatives that are identical with respect to expected return aswel l as theend-point s of the yield range,bu t are i different with respect to yield variability and yield risk.Th e idea ist omak e oneo f the distributionsmor e 'peaked' than the other.Choic e between such alternatives based on the real endpoints of the yield range would be indeterminate. However,i f endpoints are taken at some probability level,th e adjusted endpointswil l be different and choice including risk considerations will be possible (Figure 8.4.2).

The main conclusion that can be derived from the above findingsi s that farmers neither actively anticipate severe adverse nor very favourable environmental crop growth conditions.Initia l yieldI range expectations aswel l as subsequent expectations under norial growth conditions do not include yield levels at the tails oftlk d yield probability distribution.Unles sadvers e crop conditions develop,yiel d expectations are relatively stable until the reproductive stage after which the perceived yield range become$ narrower towards theharvestin g date.I f a stress situation '• occurs, farmers adjust their yield expectations on the basis of1 actual crop development. :

Probability

contracted rangeA

maximum rangeA an dB

Figure8.4. 2 Contractiono fyiel d ranges 253 Thus,i tappear stha tinstea do fperceivin gth ewhol erang eo f possibleyiel dlevel si nthei rinitia lyiel dexpectations ,farmer s perceivea truncate d versiono fthi srang ewit ha nimplie dris k perceptiontha tma yb econsidere d ratheroptimistic .Initia lwors t returnexpectation sar eno tbase do nth ewors tpossibl eyiel deve r experienced orexpected ,bu trathe ro nvalue stha tar e substantiallyabov ethi slevel .Thes e 'worstpossible ' expectationsma yb erelate dt owha tSimo n (1955)refer st oa sa referencepoin tfo rfeeling so ffailur eo rt oShackle' sfocu slos s concept (Shackle,1961) .O nth eothe rhand ,farmer sexplai nthei r optimistic viewo flowes treturn swit ha kin do f 'peaceo fmind ' argument: 'Whywoul dw ealway sworr yabou tth ewors tpossible .I f youkee po nthinkin gwha tma yhappe nt oyou rcrop syo ubette rsto p farming,(otherwise )yo uge tgrazy!' .

Finally,sinc efarmer sadjus tthei ryiel dexpectation so nth e basiso factua lcro pdevelopment ,th equestio narise st owha t extentinitia lyiel dexpectation sca nb eemploye dt oexplai n farmers'behaviou rwit hrespec tt oinput stha tar esequentiall y appliedo rt owha texten ti ti svali dt oformulat erecommendation s basedo nsuc hexpectations .

Fertilizerrespons eperceptio n Fora mor eelaborat esurve yconcernin g fertilizerrespons e perceptionso ffarmers ,th e 'triangulardistribution 'elicitatio n procedurewa sused .I tappeare dtha tfarmer scoul dmor eeasil y relatet othi sprocedure ,whil ei ti sals omuc hles stim e demandingcompare d toth e 'visualcounter 'method .Th eresult s presented below,althoug hobtaine d forspecifi cfield so ffarmers , dono trelat et oactua lcro psituations .Therefore ,i nvie wo fth e earliermad eobservatio nconcernin gabstrac tquestions ,farmer s mayhav eha dsom eproblem si nrelatin gt oth equestionin g procedure.However ,a tth etim eo fth esurve yfarmer swer equit e experienced inthi stechnique .Moreover ,i fi ti sassume dtha t inaccuraciesan dbiase sar esimila rfo ral lfarmer si nth esample , relativedifference si nperceptio nma yb euse dt oexplai nrelativ e differencesi nactua lfertilize rapplicatio nlevels .

Farmerswer easke dt oexpres sthei rfeeling swit hrespec tt ofina l yieldstate sgive ndifferen tlevel so fnitrogen .Th equestion s werepose di nterm sof :'i fyo uappl y 'xbags 'o fure at oa particularcro po nparce lA ,wha td oyo uexpec ta sth ebes t possibleyiel dan dwha ta sth ewors tpossibl eyield' ,followe db y 'whatd oyo uexpec ta sth emos tlikel yyield '. Thi swa saske dfo r fivelevel so fnitroge n (0,1.5 ,3 ,5 ,7 bag so fure ape rhectare ) fordifferen ttype so fric ecrops .T ofacilitat ecompariso n betweenfarmers ,parcel swer echose na smuc ha spossibl ei nth e samelan duni tclas s(plai nwaterway) .Fo rothe rlan duni t classes,respons eperception swer eelicite d fortw onitroge n levels(1. 5an d3 bags/h ao furea) .Thes esubjectiv enitroge n responseperception sar euse di nth eregressio nanalysi spresente d inSectio n8.5 . 254

Table8.4. 2 Subjectivenitroge nrespons eperception s (plainwaterway) ;averag e2 5 samplefarmer s Nitrogen Worst Most Best Mean level possible likely possible expectation (kg/ha) (ton/ha) (ton/ha) (ton/ha) (ton/ha) HYV (1st crop) 0 1.03 (.26) 1) 1.45 (.23) 1.99 (.19) 1.42 (.21) 0.18 34.5 1.45 (.23) 2.35 (.23) 3.14 (.16) 2.25 (.18) 0.21 69.0 1.68 (.24) 2.80 (.23) 3.69 (.15) 2.66 (.18) 0.21 ! 115.0 1.92 (.23) 3.21 (.23) 4.18 (.14) 3.05 (.17) 0.21 161.0 2.25 (.18) 3.64 (.20) 4.57 (.13) 3.46 (.15) 0.19 HYU (1st crop) 0 0.90 (.28) 1.37 (.27) 1.91 (.24) 1.33 (.24) 0.20 34.5 1.37 (.24) 2.24 (.21) 3.04 (.17) 2.14 (.18) 0.21 69.0 1.64 (.23) 2.63 (.22) 3.44 (.15) 2.51 (.17) 0.20 115.0 1.86 (.21) 2.95 [•20) 3.77 (.13) 2.81 (.16) 0.19 161.0 2.07 (.20) 3.25 (.19) 4.04 (.13) 3.09 (.15) 0.18 BE-3 0 0.61 (.38) 1.20 [•28) 1.75 (.23) 1.14 (.25) 0.27 34.5 1.12 (.25) 2.04 (.22) 2.85 (.17) 1.94 (.19) 0.24 69.0 1.35 (.22) 2.50 (.23) 3.34 (.15) 2.35 (.18) 0.24 115.0 1.54 (.22) 2.86 (.21) 3.77 (.14) 2.69 (.16) 0.24 161.0 1.72 (.20) 3.23 (.21) 4.14 (.14) 3.02 (.16) 0.23 1)Figure si nparenthese sar ecoefficient so fvariatio n(c.v. )

Table 8.4.2 shows the results for three different crop types (dry seeded rice is excluded because of its similarity with the first wet seeded crop)fo r the sample of 25 farmers.A t all levels of fertilizer and for all 'crop states',th ewe t seeded rice crop performs best in the view of farmers followed by the traditional BE-3 crop which at low levels of fertilizer performs better than the second wet seeded rice crop.Difference s in perception between farmers- given by the coefficient of variation - tend to decline with increasing levels of fertilizer.The y are greatest for the 'worst possible' perceptions and lowest for the 'best possible' estimate.Thi s seems to indicate that farmers'perception s conform closer when yields tend tomov e towards their maximum. Thatis , perceptions differ particularly for sub-optimal growth condition^ either in terms of the effect of environmental stress conditions or low levels of fertilizers.

A comparison between themea n subjective response estimates and the empirical response function is shown in Figure 8.4.3. For ! nitrogen levels up toabou t 100k g N, the shapes of the empirical and subjective response functions are surprisingly similar for the first HYV and BE-3 crops.A t higher N-levels farmers still perceive amor e or less linear response tonitrogen ,wherea s the empirical response declines.Thi s divergence is probably due to the fact that,o n the one hand,mos t farmers have no experience with N-levels above 80 kg and simply anchor their perceptions onj their response experience in the trajectory of say 60t o8 0k g N 255

Yield (tons/ha) HYV (1st) 4.0 best possible ^

V' empirical 3.0

2.0 / / ^/^ mostlikel y

* S ———'*""" 1.0 * ^~ worstpossibl e

^_i ••»•••• i . i ...

4.0 -

3.0 .

2.0

1.0 .

40 80 120 kgN/h

4.0 HYV (2nd)

3.0

2.0 / * S

1.0

'. J .. i.i.i. 40 80 120 kgN/ha

Figure 8.4.3 Subjective responsefunction sfo rthre e types ofcrop sfo rthre etype so fcro p conditions 256 (whichexplain sth ealmos tlinea rrespons eabov eth e6 0k gN i level).O nth eothe rhand ,th edivergenc ema yb eto oaccentuate) ! duet oth eemploye dquadrati crespons efunctio nwhic hma ypoorl y representactua lrespons ea thighe rN-levels .

Analternativ ereaso nexplainin gth elinea rrespons ea thig h N-levelsi stha tfarmer sma yimplicitl ychang eperceive dcro p j conditionswhe nconsiderin ghig hfertilize rapplicatio nlevels . Thisma yi npar tb edu et oth ewa yi nwhic hth erepons equestion s wereframed ,i.e. , 'ifyo uappl ys omuc hfertilize rwha td oyou ! expect?'.Sinc efarmer sthin ki nterm so ftw osequentia l applicationso ffertilize rwhe nhig hfertilize r levelsar e concerned,ther ei sa tendenc yamon gfarmer st oargu etha ti fthe y applysuc hhig hnitroge nlevel scro pcondition smus tb e favourable.Tha tis ,a tth etim eo fth esecon dapplicatio non eo f themajo rstres sfactor s- wate ravailabilit y- ca nb equit e accuratelyassesse d byth efarmer .Thus ,yiel dperception sabov ea certainnitroge nleve lma yb esubjec tt oa nimplici tswitc hi nth e perceptiono fth estatu so fenvironmenta lconditions ,i.e. ,hig h fertilizerrate sar eonl yapplie dunde rfavourabl ecro pgrowt h conditions.Thi sma yresul ti nth ehybridizatio no ftw orespons e relationshipsa sshow nb yFigur e8.4.4 .Suc hhybridizatio nma y alsoexplai nbette rwh yfarmer shav ea tendenc yt operceiv ea mpf e thanlinea rincreas ei nthei r 'worstpossible 'perceptio na thi^ h N-level's.

Thesubjectiv eassessmen to fnitroge nrepons efo rth esecon dHY V cropi smor eoptimisti ctha nth eempirica lrepons ewoul dsuggest * Thisma yresul tfro manchorin go nth efirs tric ecro psinc e | farmershav eno tmuc hexperienc ewit hsecon dric ecro p I

subjective response yield / (twoapplications )

'hybridization'effec t

v.subjectiv e response (oneapplication )

duet oswitc hi n perceived environmentalcondition s

nitrogen

Fig.B.4. 4 Theeffec to fth ehybridizatio no ftw orespons e functions 257 cultivation.Compare d toempirica lresults ,bot hth esubjectiv e reponsean dintercep tleve li smor eoptimisti ctha nfo rth etw o othertype so fric ecrops .Thi soptimisti crespons eperceptio nma y inpar texplai nth eearlie robserve drelativel yhig hnitroge n levelsfarmer sactuall yapplie d tosecon dric ecrops .

Marginalvalu eproduc t($ ) 5.0

kgN/ha _1 -HYV (2nd) HYV (1st)

Fig.8.A. 5 Marginalvalu eproduct so fsubjectiv enitroge n responsefunction sfo rth e 'bestpossible 'growt hconditio n forthre etype so fric ecrops .

Figure8.4. 5 showsth esimilarit yi nshap eo fth emargina lproduc t curvesfo rth ebes tpossibl eyiel dconditio no fth ethre ecro p types.Thi sindicate sa simila rcoefficien tfo rth e'higher ' nitrogenter mi nth esubjectiv erepons erelatio n(visua l inspectiono fth esubjectiv erepons esurface ssuggest sa functio n ofth efor mY = a + b N+ (c/N)implyin gincreasin g linearitywit h increasingN-levels) .However ,th ecoefficien to fth elinea rter m inth erespons erelationshi p ('b' inth eabov eequation )differ s betweencrops .Farmer sperceiv ea substantia lweake rrespons et o nitrogenfo rth eloca lBE- 3variet yfo rnitroge nlevel sabov eth e 34k gN compare dt oth eIR-varieties .I nth esam efigure ,th e averageactua lapplie dmea nnitroge nlevel sfo rth evariou scrop s (plainwaterwa yfields )ove ra perio do ffou ryear si sindicated . Iti sstrikin gtha tth eassociate dmargina lproduct so fth ethre e croptype sar ealmos tequa la ta margina lbenefit/cos trati oo f about1.75 .

Perceivedris ko fnitroge nrespons e Riskperception sar einherentl ymor edifficul tt orationaliz etha n theabov emai nperformanc eexpectations .Withi nth econtex to f fertilizerreponse ,a noperationa lconcep to fris kma yb e 258

Marginalvalu eproduc t($ )

HYU (1st) 4.0 \ bestpossibl e

3.0 \ \ \\ \\ 2.0 \^ \ most likely

T^-, 1.0 ..margin& icos t *ii

worstpossibl e J 1 ._! 1 i i i 40 80 120 kgN/ha

80 120 kgN/ha

4.0

3.0

2.0

1.0

80 120 kgN/ha

Figure8.4. 6 Marginalvalu eproduc tcurve so fsubjectiv e responsefunction so fthre etype so fric ecrop sfo rthre e cropgrowt hcondition s 259 formulateda sth eprobabilit y thatth emargina lvalu eproduc t fallsbelo wth emargina lcos to fth einput .Figur e8.4. 6 showsth e marginalvalu eproduc tcurve sfo rth ethre edifferen tyiel d conditions.Th emos tstrikin gfeatur eo fthes ecurve si stha tthe y tendt oconverg ea thighe rlevel so fnitroge nwhic hma yb edu et o theearlie rindicate d 'hybridizationeffect' .A sshow nb yth e 'worstpossible 'MVP-curve ,farmer sperceiv etha treturn sar e alwaysabov e- wha tappear st ob e- a rathe rwell-define dleve l whichi sver yclos et oth eactua lcost-lin eo r 'minimumbreak-eve n return'o fnitroge n ($0.54/kgN) .

Itshoul d beremembered ,however ,tha tdu et oth epossibl e truncationo fth eyiel drang ecause db yth eemploye delicitatio n procedure,th e 'worstpossible 'retur ncurv ema yactuall y representa probabilit y boundarywher ereturn shav ea chanc eo f about20 %t ofal lbelow .Th efeelin gtha tfarmer sd ono tinclud e zeroyiel doutcome si nthei rstate dbelief sconcernin gyiel d expectationsi sfurthe rconfirme d bya ninconsisten trespons et o twodifferen tquestion srelate d toth eriskines so fsecon dric e crops.Prio rt oassessin g farmers'feeling swit hrespec tt o nitrogenresponse ,farmer swer easke dt oasses sth elikelihoo do f secondric ecro pfailur ei nterm so fth enumbe ro fyear sou to f ten,fo rcrop splante di nth efirs thal fo fOctober .Fo rfield si n theplai nwaterwa yarea ,estimate srange dfro m1 t o3 year swit h anaverag eo f1. 8years .However ,whe nquestione dabou tth e nitrogenresponse ,non eo fth efarmer sexpresse d zeroyiel da sth e worstpossibl eyiel doutcome .Althoug hsuc hinconsistencie scas t seriousdoubt so nth eadequac yo fth eelicitatio nprocedur eo rth e farmers'abilit yt oexpres swors tretur nperceptions ,i fw eassum e theset ob eindependen to fth enitroge nlevel ,w ema ystil lemplo y thema sa relativ emeasure .

Therelativ eriskines so fth ethre ecro ptype s- i nterm so fth e possibilitytha tmargina lreturn sfal lbelo wmargina lcos t- i s presented inFigur e8.4. 6 byth eshade darea sunde rth emargina l costline .Fo ral lcrops ,th epossibilit yo fa negativ emargina l rateo fretur nstart si nth enitroge nrang e34. 5- 6 9k gN ,bu t increasesmor esharpl yfo rhighe rN-level sfo rbot hth esecon dHY V andBE- 3compare d toth efirs tHY Vcrop .Fo rth eles snitroge n responsiveBE- 3crop ,eve nfo rth e 'bestpossible 'yiel d condition,margina lreturn sfal lshor to fth emargina lcos tabov e the6 9k gN level .

Withrespec tt oth esecon dcrop ,farmer sperceiv ea somewha tlowe r benefitan da highe rris ko finvestin gi nfertilize ri nth erang e 69- 11 5k gN compare d toth efirs tHY Vcrop ,bu tth edifferenc e ismuc hles spronounce dcompare d toempirical 'findings .However , ifris ki sdefine d inabsolut eterms ,fo rinstanc ea sth ewors t possibleyield-perceptio na tzer oN-level ,th eris ko fth esecon d cropi ssubstantiall y higher. 'Worstpossible 'return so fth e secondric ecro par eabou t40 %lowe rcompare d toth efirs tric e crop. 260 | 8.4.2 Farmers'attitude s towards risk j Inassessin g farmers'ris k attitudes,a distinctio n should bemad e between risk averse behaviour thatresult s from structural factors and risk aversion that isdu e todifference s in the psychological make-up of individuals (Chapter 3). The former typeo f behaviour is influenced by the farmers'ris k taking ability which - inthje ; presentcas e - isclosel y related to thecapacit y of the farm-i household to produce a surplus above basic consumption requirements (Section 6.3.3).Th e farmer'swillingnes s to takej risk (attitudinal risk aversion)i sconsidere d to be independent of the farmer's risk taking ability intha t it solely relatestl o his psychological disposition toavoi d fair bets (Lipton,1979)1 . As indicated earlier,thi s distinction hasmor e thantheoreticai l importance.Fro m a policy point of view,i f risk averse behaviqur ismainl y induced by structural factors,ther e is scope for • ] supporting poor farmers through measures that increase theirrilsj c taking capability.If ,o n theothe r hand,ris k aversion turnsotu t to bea purely idiosyncratic phenomenon,i twil l takemuc hmore ! '. effort to change risk-induced behaviour patterns. |

In eliciting farmers'ris k attitudes it is,however ,difficul t!tt > ensure that pure attitudesar emeasured .Particularl y incas etjh e ellcitation procedure involves choices related to theactua lfatrj i situation,on ema y expect pureris k attitudes to beconfounde d! > with resource-induced risk aversion.Resourc e poor farmers' ; preoccupation with thegoa lo fobtainin g minimum subsistence ' j requirements may substantially distort elicited pure risk [ attitudes. In order to reduce such influence,i twa sdecide d tot, elicit farmers' preferences for hypothetical choicealternativejs' . They involve choice options that differ with respect to the !; intensity of input use and risk fora rice production activity on a onehectar e field,wit h basic subsistenceneed sno t at risk.

Measuring farmers'willingnes st o take risk One of the standard procedures to elicit farmers risk attitudes]i s to establish their preference for simple choice optionso f the; type: . option A: a fixed income of 30bag so f rice I . option B:a 50%chanc e of no rice income and | a 50%chanc eo f 60bag so f rice |! The expected income level of both alternatives isth e same.The i risk averse farmer isexpecte d to opt for alternative A.Th e I \ procedure is to lower the fixed income value to such an extent that the farmer becomes indifferent between the twoalternatives . The fixed income under alternative Ai sidentifie d as the certainty equivalent of alternative B.Th e income difference between the certainty equivalent and theexpecte d incomeo f alternative B is the risk premium of the farmer for this particular choice.I t represents theamoun t of expected incomefejie farmer iswillin g to forego inorde r toavoi d choosing therisk y alternative B.I f a serieso f such certainty equivalents is ! 261 established,a ris kpreferenc efunctio nca nb efitte d tothes e pointsusin gregressio nanalysis .Alternatively ,on ema yus eth e riskpremiu mo fon eparticula rchoic esituatio na sa partia lris k aversioncoefficien to rpartia lris kinsuranc epremium .

Inpre-testin g thisprocedur ei tbecam eapparen ttha tfarmer sha d problemsi nrelatin gt oth e50:5 0typ egamblin gquestions .I twa s mentioned byfarmer stha tth equestion swer eindee dto omuc hlik e gambling:obviously ,i nagriculture ,choic ealternative swit h fixedoutcome so r50:5 0typ eoutcom eprobabilitie sar erathe r uncommon.T oallo wfo ra mor erealisti cset-u po fth echoic e situationw eadopte da nelicitatio nprocedur edevelope dan d appliedb yWebste ran dKenned y (1975).The yspecificall ydesigne d thismetho d tomeasur efarmers 'preference sfo rrange so foutcome s defined interm so fShackle' s(1961 )focus-gai nan dfocus-los s income.Focu sgai nan dfocu slos soutcome sar eloosel ydefine das , respectively,thos ehighes tan dlowes toutcome swhic hfarmer s wouldb esurprise d toreac hi nan yeventuality .Sinc ethi s procedureemploy srange so fyield srathe rtha nspecifi cyiel d outcomes,th etyp eo fchoic esituatio nconform sclose rt oth e manneri nwhic hfarmer sthemselve sperceiv eoutcom euncertaint y (Section8.4.1) .

Thismetho d entailsa nintervie wprocedur ei nwhic hth efarme ri s directlyconfronte dwit ha lay-ou tdescribin gth epossibl e outcomeso fa choic ei nterm so fa focus-gain ,a focus-los san da n expectedoutcom elevel .Th elay-ou tconsist so fa shee to fgrap h paper,wit hne treturn si nterm so fbag so fpala y(Y )rule dalon g thevertica laxis .Th erang eo fY i slarg eenoug ht ocove rth e potentialrang eo fne treturn stha tca nb eexpecte d froma on e hectareric efiel d (0t o6 0bag so fpalay) .Y i sdefine da sgros s yieldminu sharvesters 'share ,lan drent ,an dcas hinpu tcosts . Theonl yothe requipmen tuse dbeside sth egrap hi sa serie so f plasticstrip so fdifferen tlengths ,wit harrow smarke da thalfwa y point.I ti sexplaine dt oth efarme rtha tthes estrip srepresen t riceproductio nactivitie stha tonl ydiffe rwit hrespec tt oth e intensityo finpu tuse .Th elonges tstri p- representin gth emos t intensiveric eproductio nactivit y- i splace d firsto nth egrap h andaligne d parallelt oth eY-axis .Th efarme ri stol dtha teac h striprepresent sa rang eo fpossibl eyields .Th eexpecte d yieldi s marked onth eY-axi sb yth earro whalfwa yalon gth estrip .I ti s explained thatothe ryiel d levelsar egive nb yth ewhol elengt ho f thestri pa swel la stha tonl yonc eever yte nyear syield swil l fallsomewher ebelo wth ebotto mo fth estri pan donc eever yte n yearsabov eth eto po fth estrip .

Inthi sway ,a stri pplace do nth egrap henable sth efarme rt o visuallyappreciat ea rang eo fpossibl eyields .Afte rth elonges t stripi splace do nth egrap hwit hth earro wmarkin ga pre - specifiedexpecte d yieldY an dafte rit ssignificanc ei sexplaine d toth efarmer ,a slightl y shorterstri pi sintroduced .Th eshorte r striprepresent sa smalle rdispersio no fyiel dpossibilitie san d ispositione dalongsid eth einitia lstri ps otha tit sarro w 262 indicates the same Y as the arrow of the intial strip.Th e farmer is then asked which strip represents themor e desirable range of yields. If the initial strip is selected, the shorter strip is raised; if the shorter strip is selected, the shorter strip Is lowered.Th e shorter strip ismanoeuvre d until the farmer is indifferent towards the yield possibilities represented by the two strips.Thi s procedure was repeated two times with successively shorter strips. ' i

Numbero ffarmer s

non-surplus1 farmers K*S^<555.v

Figure 8.4.7 shows the distribution of the partial risk aversioh coefficient for the sample of 25 farmers.Thes e are computed as1 1 - (E(Y4 )/ E(Y1 ) ),wher e E(Y1)an d E(Y4)ar e the expected returns from the initial and last outcome strips,respectively . It shows that all farmers are,t o some extent,ris k averse.Non - surplus farmers appear tohav e a somewhat higher risk aversion coefficient compared to surplus farmers.However , of the latter category, some farmers are severely risk averse.Th emea n partial risk aversion coefficient for this sample of farmers is about 0.17,whic h indicates thatmos t farmers are intermediate to moderately risk averse according to the scale employed by Binswanger (1980). These findings conform closely to results obtained by Binswanger (1980)an d Sillers (1980)fo r samples of farmers in India and the Philippines, respectively.

8.5 The impact of risk on fertilizer decisions Above,a substantial number of factors thatma y influence fertilizer decisions made by farmerswer e identified and discussed. Itwa s empirically established that risk increases with increasing fertilizer use,tha t farmers also perceive increasing risk of fertilizer use,an d that all farmers are,t o some extent, averse to risk. In this last section,th e relative importance of these factors will be assessed. In particular,attentio n is paid to the relative importance of the farmer'swillingnes s to take risk asoppose d tohi s ability to takerisks . 263 Forreason sdiscusse d inChapte r3 ,n oattemp ti smad et otes tth e validityo fa specifi cmode lregardin geconomi cchoic eunde r uncertainty.Instead ,regressio nanalysi swil lb euse dt oasses s therelationshi pbetwee nth efarmer' sdeviatio nfro moptimu m fertilizerlevel san da numbe ro fdecisio nvariable san dhousehol d characteristics.Suc happroac hha sth eadvantag etha tvariable s canb esimultaneousl y testedfo rthei rrelativ eimportanc ei n explaining fertilizeruse .Give nth einadequacie si nvariabl e measurementa swel la sth eproblem sencountere d inmodellin gth e technicalrelationshi po ffertilize rrespons e (Section8.2.2) ,i t isclea rtha tth eresult sderive d fromth eanalysi sbelo wshoul d betreate dcarefully .

8.5.1 Modelspecificatio n Thedependen tvariabl efo rth eregressio ni sdefine da sth epe r centdifferenc ebetwee nth ecompute doptimu mleve lo fnitroge n (Nopt)an dth eactua lleve lo fnitroge napplie d (Nact),viz . (Nopt- Nact )/ Nopt .Fo reac hplot ,optimu mnitroge nlevel swer e computedtakin gint oaccoun tlan duni ttyp ean dtyp eo fric ecrop , andusin gfixe dinput-outpu tpric eratio sfo rnitroge n irrespectiveo fth etyp eo ffertilize rapplied .Th eregressio n analysisi slimite dt ofirs tric ecrop sbecaus eno tal lfarmer s growsecon dric ecrops .

Thefollowin gindependen tvariable sar einclude di nth eregressio n model: .surplu sare aindex : Thisinde xi sdefine da sth efar mare a remainingafte rth eare aneede dfo rbasi cconsumptio n requirementsi ssubtracted .Thi svariabl ei sa prox yfo r theris ktakin gcapacit yo fth ehousehold . .lif ecycle : Thelif ecycl estag ei srepresente dher ea sa continuousvariabl ean di sapproximate d byth efarmer' s age. Iti sexpecte d tohav ea negativ einfluenc eo nth eus e ofcas hinput si ncro pproductio nsuc ha sfertilize rbase d onth eearlie rindicate dstron grelationshi pbetwee nlif e cyclestag ean dcas hexpense sfo reducation . .ris kattitude : Theearlie rderive d partialris kinsuranc e premiumi suse da sa ninde xfo rth efarmer' swillingnes st o takerisk .Sinc eincreasin gris kaversio ni sexpecte dt o resulti ndecreasin gfertilize rapplication ,whic hi ntur n impliesdecreasin gris ko ffertilize ruse ,th eroo tvalu e ofthi sinde xi sinclude da sa variabl ei nth eregression . .respons eperception : Thisvariabl erepresent sth efarmer' s perceptiono fth eyiel dincreas eove rth efertilize rrang e 34.5-6 9k gN fo rth e 'bestpossible 'yiel doutcome san di s expressed incavan s(approx .42. 5k gbags )pe rhectare .I t is specified bycro ptyp ean dlan duni tclasses . .ris kperception : Therear etw oway st ooperationaliz eris k perceptiona sa variabl efo rregressio nanalysis .O nth e onehand ,ris kperception sma yb eexpresse d inabsolut e 264 terms,e.g. , as the probability of a negative rateo f return for a certain level of fertilizer or,alternatively , as the fertilizer levelwher e themargina l net return becomes zero.O n the other hand,on ema y opt fora relative measure expressed in termso f themargina l increase in risk over a range of the fertilizer input.Wha t measure is appropriate dependso n thewa y farmers perceive risk.I ti was decided tous e the relative measure because of the difficulties encountered inmeasurin g risk perceptionsari d indeterminin g the exact point wheremargina l returns equal marginal costsdu e to thediscret e nature of the elicited response perceptions.Thi s variable isdefine d as the reciproque of the increase in yield for the 'worst possible' outcomes for the fertilizer range 34.5- 69k gjM . . priceo f fertilizer:Th e price of nitrogen,calculate d a3 the ratio '(deflated)pric eo f fertilizer per bag/kilograms N available per bag',i sprimaril y used asa proxy forthe 1 relative concentration of nitrogen.Thi svariabl e is included in the regression to check the earlier mentioned observation that farmers tend to perceive thequantit y o€ fertilizer in terms of bagso f fertilizer and therelativ e price per bag,rathe r than on the basiso f nitrogen content. . HYV dummy:Thi s variable iszer o for traditional ricecrcjp s and one for IR-varieties. It is included to evaluate i : possible differences in fertilizer application levels i between rice varieties. \ . second application dummy:Thi sdumm y variable isincluded ^ : to checkwhethe r farmersusin g twoapplication s of fertilizers apply higher dosageso f fertilizers.

Table 8.5.1 presents themea n valueso f the variables included ±ti the regression for each category of households.I t shows the slight correlation between the surplusare a index and pure risk > attitudes.Respons e perceptions are highest for themiddle-age d non-surplus households,wherea s they are lowest for the young surplus category of households.Thi s is partly due to difference^ in land unit classesan d crop types between household categories', but in partma y also be explained by optimistic fertilizer

Table8.5. 1 Mean valueso findependen t variables Life Surplus Farmer Risk Risk Response Price Share cycle Surplus area age attitude perception perception nitrogen 2)tenancy 1 young no 0.51 34 0.19 (0.08) 2)0.4 2 (0.26) 20.4 (4.76) 4.21 (0.98) 25.0* mid no 0.39 49 0.19 (0.03) 0.22 (0.13) 20.5 (4.53) 3.88(0.19 ) 13.8*; young yes 1.51 30 0.16 (0.05) 0.25 (0.12) 15.9 (7.39) 4.29 (0.43) 46.4* mid yes 1.59 51 0.14 (0.06) 0.28 (0.10) 14.5 (4.49) 4.34(0.43 ) 19.8* old yes 1.74 64 0.17 (0.07) 0.27 (0.13) 15.5 (3.55) 4.28(1.03 ) 25.5*. 1) Thepric eo fnitroge n andth epercentag e oflan d under share tenancy aremean so fannua l aggregated crop observationso na far m basis (4years) * 2) Figuresi nparenthese s arestandar d deviations* 265

Table8.5. 2 Regressionresult sfo rindividua lyear san dal lyear sfo rindividua l cropobservation s(firs tric ecrop sIR-varietie san dBE-3 )

Variable 1978 197S 1980 1981 Pooled

Surplusare a -22.2* *1 ) -19.5 ** -22.6* * 2.9 -17.1* * lifecycl e 2.8 5.5 * 4.6* -0.4 3.7* * Riskattitud e 72.2* 69.7 * 90.9* * 48.4 72.4* * Responseperceptio n -1.2* * -1.9 ** -1.5* * -0.6 -1.2* * Riskperceptio n 1.5 2.3 0.4 1.4 0.1 PriceN 11.1* 10.5 * 36.9* * 14.3 30.6* * (PriceN) 2 - - -2.1+ -0.3 -1.7* 2ndappl .dumm y -12.7 -32.4 ** -37.3* * -25.4* * -29.5* * HYV dummy 15.0* -2.1 9.4 -6.1 2.3

Yeardummy :197 8 11.0* * 1979 10.4* * 1980 -3.3

Intercept -30.8 2.1 -105.9* * -48.1 -86.5* *

R2 0.23 0.27 0.57 0.26 0.33 s.e. 28.1 30.9 23.3 29.0 28.5 No. ofobservation s 90 126 106 87 409 1) Significanta tth e0.1 0 (+),0.0 5(*) ,an d0.0 1(** )levels .

response expectations ofpoo r farmerswh ousuall y operate atth e lower endo fth erespons e function.I ngeneral , non-surplus farmers apply less expensive fertilizers compared tosurplu s farmers. Substantial differences occur inth eric e area under share tenancy. Although this variablewa sinitiall y includedi n the regression,i tdi dno tsho wan yrelationshi p with applied fertilizer levels.

8.5.2 Discussion ofresult s Table 8.5.2show sth eresult so fth eindividua l year regressions and thepoole d estimate foral lyear sfo rindividua l crop observations. Except forth efarmers ' risk perception andth eHY V dummy,al lvariable sar esignifican t forth epoole d regressions and inconformit y with prior expectations with respect toth esig n of thecoefficient .Th enon-significanc e ofth eris k perception variable isprobabl y duet oth eearlie r indicated measurement problem. Further,th einteractio n between risk attitudesan dris k perception -no tinclude d inthi s regression model- i sno t significant.Thi s casts additional doubtso nth ereliabilit y with which risk perceptionsar e(o rcan )b emeasured . Except for 1978, theHY Vdumm y showsn osignifican t effect andth esig no fth e coefficient differs between years.I tindicate s that therear en o systematic differences infertilize r application levels between varieties when such levelsar eevaluate d relative toth eoptimu m application level.I ti sno tclea rwh yfarmer s applied relatively less fertilizer toIR-varietie si n1978 .I tma ystil l representa learning lagwit h respect tofertilize r requirements ofthes e varieties. 266 In order toasses s the relative importance of the variables included in the regression in terms of their contribution to explaining differences inN-applicatio n levels,fo r each independent variable the range value of the dependent variable (in absolute terms)ove r themaximu m observed range of the ' variable was computed. Table 8.5.3 shows that results are • relatively stable for the first three years of observation. Apart from the price effect and the dummy variable for the second fertilizer application, the surplus area index shows the largest contribution to differences in N-application levels:th e difference in deviation from the optimum N-level between farmers with the smallest and largest surplus area is in theorde r of 45%

Table8.5. 3 Theeffec to findependen tvariable so nN-applicatio ni n termso fth eabsolut epercen tdeviatio nfro mth eoptimu mN-leve l {%) overth emaximu mobserve drang eo fth eindependen tvariables ; individualcro pobservation s(firs tric ecrop sIR-varietie san dBE-3 )

Variable 1978 1979 1980 1981 Pooled

Surplusare a 48.4 42.5 49.3 6.3 37.3 Lifecycl e 11.0 22.2 18.4 1.7 14.8 Riskattitud e 18.0 17.4 22.8 12.0 18.1 Responseperceptio n 20.4 32.3 25.5 10.2 20.7 Riskperceptio n 8.9 13.B 2.2 8.2 0.8 PriceN 59.3 56.1 58.2 69.0 54.0 2ndapplicatio n dummy 12.7 32.4 37.3 25.4 29.5 HYV dummy 15.0 2.1 9.4 6.1 2.3

N-application ratesar e negatively correlated with the life cycl© stage, indicating that older farmers generally apply less ; \ fertilizer. Although, itwa s hypothesized that such a relation can be expected in view of the increasing need to use cash for I education, it is possible that other differences between age groups of farmers contribute to this relationship. One possible I difference between young and older farmers is that young farmers' still have to prove their ability as farmers.Fo r instance,i t is an observed phenomenon that young surplus farmers are keen on maximizing grainyields .

Farmers' nitrogen response perceptions appear to be slightly more important than risk attitudes,wit h the former explaining a i : maximum difference between farmers of around 25%an d the lattero| f 20%. The price effect roughly confirms the earlier mentioned hypothesis that farmers perceive fertilizer quantities in termsoi f bags of fertilizer rather than in terms of the relative concentration of nitrogen available.Fo r farmers using 14-14-14, I the estimated coefficients imply that in such a case farmersappl y about 60%les snitroge n compared to farmers using urea fertilizer!.

The above results support the hypothesis that both the risk takinb capacity and pure attitudes towards risk are significant in ' 267 explainingdifference si napplie d fertilizerlevel sbetwee n individual farmers.However ,th eeffec to fth eris ktakin g capacity ismuc hmor epronounced .I tshoul db erealized ,however , thatth esurplu sare ainde xwhic hi suse dher ea sa prox yfo rth e risktakin gcapacit yo fhouseholds ,i sals oa prox yfo rbudge t constraintsan dperceive dcos to fcapital .Although ,a smentione d earlier,thi sdistinctio nis ,t oa larg eextent ,artificial ,i t remainsdifficul tt oestablis hwhethe rresource-poo r farmersappl y lessfertilize rbecaus ethe yfac esevere rconsequence si nth ecas e ofpoo rproductio nresult so rwhethe rthe yeconomicall y applyles s fertilizer becauseo fhighe rperceive d cashcosts .

Iti sinterestin g tonot etha tfo rth e198 1growin gseason , followingth ever ygoo dproductio nyea ro f1980 ,bot hth e magnitudean dsignificanc eo fal lvariable s(excep tfo rth epric e effect)substantiall y decrease.I nparticular ,bot hstructura l farm-household characteristics- surplu sare ainde xan dlif ecycl e stage- ar eno tsignificant .Th esubjectiv evariable s- perceptionsan dattitude s- appea rt ob emor estable .Thes e resultsindicat etha tdifference si nbehaviou rbetwee ncategorie s ofhousehold sar ehighl yinfluence d bycas han dresourc eflow san d possiblyb yresource-induce d riskaversion .

Forth eabov ediscusse d crop-based regressionanalyses ,th e percentageo f 'explained variance'i nth edependen tvariabl e- givenb yth eR 2- i srelativel y low.Thi sca nb eexpected ,give n thevariatio ni nplo tsize sa swel la speculiaritie so findividua l crops.O nsmal lplots ,eve npoo rfarmer sar eabl et oappl y fertilizera ta relativel yhig hrat eo na pe rhectar ebasis . Further,crop sma yreceiv ea nextr adosag eo ffertilize ri ncas e othercrop stur nou tt ohav ea poo rcro pstan dan d farmershav ea certainamoun to ffertilize ri nstock .Suc hindividua lplo t differencesca nb eexpecte d tocance lou twhe ncro pobservation s areaggregate d byyea ro na far mbasis .Anothe radvantag eo f aggregationi stha tth eimportanc eo fplot si nth eregressio n analysisi sweighe d proportionalt othei rsize .

Table8.5. 4 comparesth eregressio nresult sfo rindividua lcro p observationswit hresult swhe ncro pobservation sar eaggregate do n afar mbasi san dsubsequentl y takena saverage sove rth efou ryea r periodo f1978-81 .Th eportio no f 'explainedvariance 'i nth e dependentvariabl eincrease ssubstantially .Excep tfo rth epric e effect,al lvariable sinclude d remainsignificant .Th elif ecycl e effectbecome smor eimportant ,apparentl ya tth eexpens eo fth e surplusare avariable .I ti sals osurprisin g thatth eris k perceptioncoefficien t increasesi nmagnitude ,althoug hit s contributiondoe sno tbecom esignificant .Th enon-significanc eo f thepric eeffec tca nb eexpecte d becauseo fth elo wvariatio ni n pricesfo raggregate d observationsdu et oth epredominan tus eo f urea.

Finally,i norde rt odetermin eth eexten tt owhic hth eindependen t variablesdifferentiat ebetwee ncategorie so fhouseholds ,fo reac h 268

Table8.5.4 : Comparisono fregressio nresult sfo rindividua lcro p observationsan daggregate dcro pobservation sb yfar m (firstric ecrop sIR - varietiesan dBE-3 )

Individual Farm flax, range effect (it) 1) crops basis 2) plot farm

Surplus area -17.1 ** 3) -14.6 ** 37.3 31.9 Life cycle 3.7 ** 6.1 ** 14.8 24.4 Risk attitude 72.4 ** 92.8 * 18.1 22.1 Response perception -1.2 ** -1.3 * 20.7 21.3 Risk perception 4) 0.1 2.2 0.8 8.3 Price N 30.6 ** 3.3 54.0 8.3 (Price N)2 -1.7 * n.i. 5) - - 2nd application dummy -29.5 ** n.i. 29.5 - Intercept -86.5 ** -20.6 R2 0.33 0.56 s.e. 28.5 11.2 No. of observations 409 25 1) Theeffec to findependen tvariable so nN-applicatio ni nterm so fth e absolutepercen tdeviatio nfro mth eoptimu mN-leve l {%)ove rth emaximu m observedrang eo fth eindependen tvariables ;individua lcro p observations. 2) Meanvalue sove rfou ryear sfo raggregate d cropobservation sb yfar m 3) Significanta tth e0.1 0(+) ,0.0 5(*) ,an d0.0 1(** )levels . 4) Valueris kperceptio n/ 1 0 5) N.i.»no tinclude di nregressio n [ household category themea n difference inth epercentag e deviation from theoptimu m N-level relative to that ofth ecategor y ofth e young surplus households wascomputed . Farmers in this latter ; category arecloses t toth eoptimu m fertilizer level. On average^ they apply nitrogen ata rate of about 8% below thecalculate d; optimum level. Table 8.5.5 shows thesubstantia l contribution qf; both structural farm-household variables 'surplus area' and 'life cycle stage' andth emino r contribution of the subjective variables 'risk attitude' and both perception parameters.O f course, this canb e expected given themino r differences between household categories inth emea n values ofth elatte r type variables (Table 8.5.1). When theeffec t ofth esubjectiv e i variables is combined, differences between household categories become even smaller. Of course, this does notimpl y that ;

Table8.5. 5 Relative differences among household categoriesi nterm so fth epercentag e deviation from the optimum N-level (%)i theyoun g surplus household category isuse da sbas efo rcompariso n

Life Surp Life Sum struct. Risk .Resp Risk Sum subj. Price Total differenceI cycle Surplus area cycle factors att perc perc factors effect predicted observed (a) (b) (a+b) (c) (d) (e) (c+d+e) (f) (a+ .. +f) young no 14.6 2.4 17.0 2.5 -5.7 3.7 0.5 -0.2 17.3 25.1 mid no 16.4 11.5 27.9 2.5 -5.7 -0.7 -3.9 -1.4 22.6 28.3 mid yes -1.2 12.4 11.2 -1.9 1.8 0.6 0.5 0.2 11.9 17.0; old yes -3.3 20.5 17.2 0.6 0.4 0.4 1.4 0.0 18.6 21.2 Surp area* surplus area; risk attt risk attitude; resp perc: response perception; risk perct risk perception 269 subjectivefactor sar eno timportan ti nexplainin gdifference si n N-applicationlevel sbetwee nindividua lhouseholds ,i tmerel y indicatestha tthe yd ono texplai ndifference si nN-applicatio n levelsbetwee ncategorie so fhouseholds .Thi sfindin gindicate s thelimitatio no ftarge tgrou pspecifi cpolic ymeasure stha tar e aimeda treducin gunderinvestmen ti nagricultur ecause db yris k attitudesan dperceptions . THEIMPAC TO FRIS KO NAGRICULTURA LDECISIO NMAKING :SYNTHESE S ANDIMPLICATION SO NRESEARC HAN DAGRICULTURA LDEVELOPMEN T \

Thepremis eo fthi sstud ywa st oevaluat ewhethe rth eimpac to f risko nresourc eallocatio nwarrant sspecifi cattentio nt ofarm ; i managementanalysi so fsmall-scal eagricultur ean dagricultural < policy formulation.Th eunderlyin g issuesar etwofold :

First,doe sfarmers 'ris kavoidanc ecaus eeconomi cinefficienc y andimped eagricultura ldevelopment .Underlyin g thisissu ear etw o otherresearc hquestion srelate dt oth ecaus ean deffec to f farmers'ris kaversion : .ar efarmer sno twillin gt oinves ti nrisk ybu tprofitabl e| technologybecaus eo favers eattitude stoward srisk y investment,causin ga noveral lunderinvestmen t in ; agriculturalinput san dmisallocatio no fresources ,and/or ^ > .ar efarmer sno tabl et oinves ti nrisk ytechnolog ybecause;o f a limitedris ktakin gcapacit yleading ,apar tfro m underinvestment,t oa nunequa ldistributio no fbenefit s derived fromne wtechnologies . '

Second,doe sth einfluenc eo fenvironmenta luncertaint yo n \' decisionmakin gnecessitat emodificatio no fexistin geconomi c decisionmodels ,i.e. ,wha ttyp eo finformatio ni srequire do nth e basiso fwhic hfarmer sca nb eassiste d inimprovin gresourc e allocationan dpolic ymaker si nmakin gbette rdecision si n variableproductio nenvironments .

Inthi sconcludin gchapte ri twil lb eargue d thatprecis e quantitativeanswer st oth equestio no frisk-induce d economic inefficienciesar eo fmino rimportanc et oman yissue stha t .I ! directlyconcer nfarmer san daffec tagricultura ldevelopment .Thi s studylead st oth econclusio ntha ti fris kresearc hi st obecome s lesstheoretica lan dmor epracticall yuseful ,ther ei sa nurgen t needfo rredirectin gth eresearc heffort .Th ecentra lquestio n shouldno tb eho wan dt owha texten tfarmer savoi dris k- th e centralconcer no fmos tstudie s- i ti sho wfarmer s(necessaril y haveto )dea lwit henvironmenta lvariabilit y (inth ebroades t sense),wha tca nb elearne d fromfarmers 'ris kmanagemen t strategies,an deventuall yho wthe yca nb ebette r^assiste di n ! I makinggoo ddecisions .I ti shig htim etha tbot heconomist san d agronomistsstar tt orealiz etha tth eimpac to fvariabl e productioncircumstance so nactivit yan dinpu tchoic egoe smuc h furthertha nsimpl yintroducin ga nadditiona l- an dusuall y erroneous- choic ecriterio ni nexistin gdecisio nmodels .

InSectio n9. 1w ewil lsummariz esom eo fth esalien tfeature so f thefarmers 'choic eprocess :(1 )ho wthe yarriv ea tdecision si n variablean ddynami cchoic esituations ;(2 )give nsuc hprocess , whattyp eo fperformanc ecriteri a(o rchoic eattributes )farmer s canreasonabl yb eexpecte dt oconside rwhe nevaluatin gchoic e 271 alternatives;(3 )wha tpriorit yi sgive nt oth evariou schoic e attributes,i.e. ,wha tmotivate sfarmer si nthei reconomi c behaviour,an dwh yd o (certaincategorie sof )farmer spursu e certaintype so factivitie san ddisregar dothers .I nSectio n 9.2 theimpac to fris ko neconomi cefficienc yan ddistributio no f incomewil lb eevaluated .I nth eclosin g section (Section 9.3) implicationso nresearc han dpolic ywil lb eindicated .

Althoughno texplicitl ydeal twit hi nthi ssynthesis ,i ti sclea r thatfar mmanagemen tdecision sshoul db eunderstoo dwithi nth e widercontex to ffarm-househol d decisionmaking .A swil lb e discussed furtheron ,short-ter mconsumptio nexpenditure softe n (haveto )tak eprecedenc eove rproductiv einvestments .Th e divisiono factivitie samon gmember so fth efarm-househol dan d associated divisiono fdecisio nmakin g fieldsan dresponsibilit y bearingi sdeal twit hi nChapte r5 .

Theconclusion sderive dbelo war ebase dupo nth estud yi nth e Philippines.The yar ederive d fromfarmers 'choic ebehaviou ri na decisionmakin genvironmen tthat ,althoug hi ti srainfed ,i s characterized byrelativel y favourableproductio ncircumstance s bothi na physica lan dtechnologica lsense .I tha soffere d farmers distinctopportunitie st oimprov eexistin gfar mpractices .Th e (optimistic)finding sregardin g farmers'ris kbehaviou rshoul db e interpretedwithi nthi scontext .The yma yb eles sapplicabl efo r otherarea si nth eworl dwher eextremel yerrati crainfall ,ver y poorphysica lresources ,an dstagnan to ronl ymargina l improvementsi nproductio ntechnolog ypreven tfarmer sfro m increasingagricultura lincome .I nsuc hsituations ,a proces so f worseningman-lan dratio sma ylea dt oa nentirel ydifferen t managementorientatio nan ddecisio nmakin gpattern .

9.1 Farmers'real-lif edecisio nmakin g Iti sobviou stha tfarmer scanno tforese eth econsequence so fal l theiractions ,no rca nthe ypredic tth ebehaviou ro fothe rfarmer s orperson s(e.g .landlords )an dorganization stha tma yinfluenc e theoutcom eo rfeasibilit yo fthei ractivities .Wit hth eexplici t recognitiono fris kan duncertaint yi nhousehol ddecisio nmaking , thecomplexit yo ffar mproductio nprocesse san dassociate d { decisionproblem sbecome sapparent .Du et oa variabl eonse tan d / terminationo fth egrowin gseaso ni nrainfe dagriculture ,th e \ availabilityand/o rrequirement so fal lbasi cfactor so f . productionare ,t osom eextent ,uncertain .Dependenc yo nexternal ! meanso fproductio n (e.g.land ,casua llabour ,cas hinputs )o r decisionso fothe rperson s(e.g .typ eo fcrop scultivate db y neighbouring farmers)ma yfurthe raggravat euncertaint yi n agriculturaldecisio nmaking .Thus ,no tjus tth eoutcom eo f agriculturalactivitie si suncertain ,th efeasibilit yo f(or , alternatively,th econstraint sto )activitie si suncertai nand , consequently,th eentir echoic eproble mi sfuzzy .Makin gdecision s insuc ha situatio ninevitabl ymean ssimplifyin gth echoic e problemth esolutio ni ssough tfor . 272 There are essentialy twoway s through which farmers simplify ; i decision making: I.cautiou s optimization over a period of time based on adaptation to changesi n internal and externalcircumstances; , search forne w technologies and improvements of existing i techniques,an d experimentation;an d II. sequential decision making (economizing)withi n years based onadaptatio n tochanc e constraints and opportunities asthe y evolve in the course ofa production cycle.

Economizing behaviour based on these twodecisio n principles - that are similar but differ with respect to time span- servesth e dual purpose of an efficient use of information in dynamic choice situations thatar e typified by uncertainty,an d thus potentially good decisions,an d maintaining riskwithi n manageable •• proportions.

I. Cautious optimization In changing and/or improving existing farm practices and cropping systems,th e farmer is best represented asmakin g more or less cautious departuresove r yearsfro mcurrent production practices in the best (most promising)directio n according to current perceptions and constraints.Cautiou s optimization isa majo rtojo l of farmers to gradually improve agricultural productivity and, increase agricultural income,whil e keeping production and j j financial risks ona manageabl e level.I t includes bothadaptatip^ i to internal household characteristics (asset position and life i j cycle)an d external environmental conditions (including ! ! agricultural technology),an d own search for improvements inthe ! production system and new production possibilities to increase income. !

Asset position and lifecycl e dynamics Adaptation to internal household conditions shows both seasonal ; ' and long-term characteristicsJfDue to changes in the financial I | position of households causeaby lowagricultura l incomes or high household expenditures (hospitalization, funerals,weddings ,etcj) , year-to-year adaptation inarea so f cultivated cropso r input levelsar e often required. For example,a poor production yearma y induce farmers to enlarge theare a under the photo-sensitive BE-B rice variety at theexpens e of HYVsno t because ofa lower j fertilizer requirement per crop forBE- 3 but because the timingf j application ismuc h later in the season which allows poor ! households toaccumulat e financial means to purchase fertilizer.\ Low agricultural income may also result in excessive selling of dagmay, thus diminishing the seed inventory and reducing next j year'sarea .I n extreme cases of poor financial circumstances, farmersma y even decide toren t out fields toothe r farmers rather thanworkin g them themselves with low input investments to facilitate participation in thewag e labourmarket .Adaptatio n of a more gradual character isdu e to thecyclica l development of [ 273 households.W e have indicated the likelihood that due toa changing resource composition (man-land ratio)an d expenditure level (subsistence requirements and education)household s gradually changemanagemen t patternswhe n moving from one life cycle toanother .

Adaptation toexterna l environmental conditions Seasonal adaptation occurs in response tomarke t price^changeso f inputs and outputs.Adaptatio n tochange s in farmgate priceso f agricultural products is primarily important for seasonal crops that are of limited importance tohousehol d consumption.I twa s difficult tomeasur e farmers' response to changes in rice prices because of a relatively stable price pattern during the study period. In response to changing market prices,th eare ao f seasonal, puremarke t (commercial)crop sma y change quite rapidly between years.Th e sameapplie s to the level of applied cash inputs sucha s fertilizers and pesticides.Applicatio n ratesma y profoundly change in reaction tochange s in the relative priceso f inputs and outputs.I t should be realized,however ,tha t (giveni present farm sizes)household s have become heavily dependent onj cash inputs tomee t subsistence requirements.Drasti c reductions in the rate of fertilizer application may seriously affect the viability of thehousehol d unit.Accompanyin g thedeclin e in farm sizes has been a process of land use intensification that has become increasingly dependent on external inputs (e.g. fertilizers and pesticides)t o sustain or raise productivity levels.I n this process,th eoveral l level of risk that rural households face has increased.Wit h limited off-farm employment opportunities,smalle r farm sizes imply a lower degree of risk spreading and, combined with a high dependency on cash inputs,impl y a higher risk of indebtness.

Apart from changes in external economic circumstances,household s are also faced with a changing institutional environment.O f the numerous development activities thatwereImpose d upon the village community during the 1970s,th emajorit y did not contribute much to improving the living conditions of households but instead created an atmosphere of uncertainty and were counterproductive to the needs and economic development ofhouseholds .

Search and experimentation Change inactivitie s doesno tmerel y involve adaptation to, changing internal household conditions or external environmental circumstances.Farmer s themselves actively search for possible improvements in their production system,induce d by the strong pressure onmos t households to incxejisjs^gjricjujj^ujjd^ijic^^t o secure__med,ium-termsubsistenc e needsan d the long-run viability of rn^-4ioysejioj.d_unitTeTgT~throTIgTr^e^ucaTibir^^cTTildren)T"Ther e is no doubt that the first and major attribute farmers look at in searching forne walternative s is to increase returns to fixed family labour resources either through intensification of production or by reducing the level of paid-out costs.Th e rapid adoption of direct seeding methods of rice crop establishment 274 replacingtransplantin gindicate sth eimportanc eo freturn st o Ifamil ylabou rrelativ et ostabilit yo freturns .Ther esimpl yi sn o 'Wlbetterstrateg yt oreduc emediu man dlong-ter mris ktha nt o 'Iincreasehousehol dincome .

Experimentationlogicall y followssearc han dselectio no f promisingproductio ntechnique so rcro pactivities .Learnin gby i • experimentationprovide sa nimportan tmean st ofarmer sfo r obtainingth enecessar yinformatio no nwhic ht obas ea nassessmen t ofne wtechnologie san dt oimprov eupo nexistin gfar mplan sand j . practices.Farmer sar eexperience dexperimentors .The yar equit e ablet oenterpre tth eresult so fexperiment sa slon ga sthe yca n relateth einfluenc eo fth emai nenvironmenta lfactor so nth e performanceo fth etechnology .Ne wtechnologie sshowin ga ninitia l poorperformanc ear eno timmediatel yrejecte dno rd ofarmer sshb w arigi dperceptio no fho wa technolog yough tt operform .Thi s sUidy,reve.als _that_20^r_^armersdo__no trefrai nfro m experimentation.I ncontras twit hth ecommonl yhel dbelief , experimentationi sno ta prerogativ eo fwealth yfarmers .Whethe r jfarmersar eactiv ei nsearc hfo ro rtestin go fne wtechnologica l (possibilitiesdepend smor eo npersonal_charac_teri§:tAc stha no nj 'income.Further ,i ti sa fallac yt oassum etha tfarmer sonl y obtainon eexperimen tpe rseaso nan dthat ,consequently ,farmer^ ! experimentationi sa lon gtim eaffair . t ; i Incrementalanalysi s j i Experimentationfollowe d bygradua ladaptatio no ffar mplan s allowsincrementa lanalysis .B yincreasin g thescal ea twhic hnp w activitiesar eundertaken ,farmer sgraduall yge ta nide ao fth ej variousmanagemen tproblem san dris kcomponent sassociate dwit h newactivitie san dt owha texten tsuc hactivitie sconflic twit hi inputdemand so fexistin gactivities .I nreactio nt othes e problems,ne wmanagemen tpractice sma yb efoun dtha tar eaime d k% reducingth eeffec to fthes eproblem san drisk sa smuc ha s possible.Incrementa lanalysi sdoe sno tonl yfacilitate sa gradua l apprehensiono fne wproductio ntechnology ,bu tals oallow s I marginal(pair-wise )comparison swit hth eperformanc eo fexistin g productiontechnique sthe yar eintende dt o(partly )replace . I Becauseth echoic eproble mi snarrowe ddow nt oa par to fth e productionsystem ,th esiz eo fth echoic eproble mi shighl y reduced.Thus ,alternative sca nb ebette revaluated ,eve n j consideringmultiple ,an dpossibl yconflictin gchoic eattribute^ t ^includingvariou sris kaspects .Th enee d forincrementa lanalysi s \A/;?|explain swh yfarmers ,o na voluntar ybasis ,seldo madop ti non e *tim eal lcomponent so fso-calle d 'integrated technologypackages '

Apartfro mth eoverridin gimportanc eattribute d toreturn st o familyresources ,w ehav ediscusse d variousothe rchoic e attributeso nwhic hfarmer sscree nproductio nactivities .Among | othersthes einclud eth etimin go foutpu trelativ et ofluctuation s inth eincom estrea m (seeth eadvantag eo fshort-maturin g I ; (»,varieties),whethe rth eoutpu ti sattractiv efro mbot ha •''"*iconsumptionan dmarketin gpoin to fvie w(reductio no fmarketing } . 275 risk),whethe ractivitie srequir eearl yinvestment si ncas h1^ - inputs,reductio no fworkloa do rdrudger yo flabour ,etc . ' Assessingth eperformanc eo fne wactivitie so nsuc h(non - stochastic)choic eattribute si srelativel y straightforwardan d doesno tpos ean yproble mt ofarmers .Althoug hconflict sbetwee n attributesar elikel yt ooccu r (e.g.th ewis ht ohav ea nearl y harvesto fric ewit hshort-maturin g varietiesvs .th ewis ht ohav e inputinvestment slat ei nth eseaso nwit hlong-maturin g varieties),suc hconflict sare ,i fpossible ,resolve d byno t optingfo reithe ron eactivit ybu tt oundertak ebot ho na reduce d scale.However ,a swil lb eindicate d furtheron ,conflic t resolutioni simportan twit hrespec tt oconsumptiv evs .productiv e investmentsan dshort-ter mvs .long-ter minvestments .

Riskassessmen ti sdifficul ta ta nearl ystag eo ftestin ga ne w technology.Obviously ,farmer scanno tb eexpecte dt oasses sth e risko fne wtechnologie si nterm so fth elong-ru nyiel d variabilityo fth eyiel do fth eactivity .Instead ,farmer s primarily looka tth esusceptibilit yo fth eproductio nactivit yt o specificris kfactor ssuc ha spests ,wee dinfestation ,drought , flood,etc .The ydecompos efina loutpu tris ki nindividua lris k j factorsan dasses st owha texten tsuc hris kfactor sca nb e I controlled,an dt owha texten tne wtechnologie sdiffe ri nris k I susceptibility comparedt oexistin gtechnologies .I nth escreenin g ofne wtechnologie sfarmers 'ris kconsideration sma yeithe rpla ya roleb ydisregardin gne walternative saltogethe ro rb yth esettin g ofcautiou starget s(i.e. ,small-scal eexperimentatio n followedb y gradualexpansio no fth ene wactivity )t oth eintroductio no fne w farmtechnologies .Thus ,perceive d riskact sa sa strik eou trul e \ ofno tconsiderin gactivitie sa tal lo rlead st oa slowin gdow no f ] theadoptio nproces sunti lmor einformatio ni sacquire dconcernin g •• theperformanc eo fth etechnology .

Amongtechnologie stha tar eno tseriousl yconsidere dar ethos e , thatsho wa hig hperceive d technicalinpu tapplicatio nris ki nth e sensetha tfarmer shav en oexperienc ei ndeterminin geithe rho wt o applyi tan dwha tca nb eexpecte do fi ti nterm so fperformanc e andrisk .Pre-emergenc eherbicide sfo rdr yseede dric ei sa typicalexampl eo fsuc htechnology .A on etim efailur eo fa ne w productionactivit ydu et oa ris kfacto r forwhic hfarmer slac k theknowledg et oasses sth elikelihoo do foccurrenc eo rth ecaus e ofris k (e.g.bacteria ldisease so rvira linfections) ,i sver y likelyt oresul ti nnon-adoptio no fsuc htechnology ,eve ni fi t hasa hig hpotentia lreturn .Als otechnologie stha tsho wa hig h susceptibilityt oirreducibl eris kfactor s(e.g .drought ,flood ) arelikel yt ob edisgarde da ta nearl ystag eo fth escreenin g process,simila rt otechnologie stha trequir ehig hinitia l investmentsrelativ et oth eincom eearnin gcapacit yo fth e household,i nparticula rwhe nreturn sar esprea dove ra numbe ro f years.Eve nwhe nsuc hinvestment sappea reconomicall yattractive , theywil lno tb eseriousl yconsidere d byhousehold sunles scredi t allowsth efinancin go fsuc ha ninvestment . 276 II. Sequentialeconomizin gan dris kcontro l I \Thefac ttha tfarmer sar ecautiou sdecisio nmaker sdoe sno timijl| y •thatthe yar econservativ ei nassessin gth efeasibilit yo fcroi t productionopportunitie san dbenefit sderive d fromsuc h |opportunities.Farmer sneithe rperceiv ephysica lenvironmenta l 'factorssuc ha srainfal li naverag eterm sno rd othe yperceiv e;th e environmenta sa malevolen topponen ta simplie d bya numbe ro f gametheories .I nfact ,farmers 'croppin gplan sar eguide db ya ratheroptimisti cassessmen to fearl yseaso nrainfal lconditions , whereasfarmers 'subjectiv eyiel dexpectation sindicat etha tthe y neitheractivel yanticipat esever eadvers eno rver yfavourabl e environmentalcro pgrowt hconditions .I ncomparin g thereturn st o alternativecroppin gstrategie sfarmer sthin ki nterm so fth ebes t croppingpatter ni nth estrateg y (i.e.,th eon efeasibl eunde r optimalrainfal lconditions) ,wherea si nassessin greturn st oCro p productionactivitie sfarmer sappea rt oemplo yrathe roptimisti c returnfigures .Als ofarmers 'yiel dris kassessmen tregardin g activitiesi nwhic hthe yar eexperience d cannotb econsidere d conservative.Instea d ofperceivin gth ewhol erang eo fpossibl e yield levels,farmer sperceiv ea truncate d versiono fthi srang e witha nimplie dris kperceptio ntha tma yb econsidere d rather • loptimistic .I fa cro pstres ssituatio noccurs ,farmer sadjus t [thei ryiel dexpectation so nth ebasi so factua lcro pdevelopment .

Thus,rathe rtha nperceivin gth ephysica lenvironmen ta sa sourjcl e ofdistres sfarmer svie wi ta sa productiv eresourc eo fwhic hth e opportunitiesfo ragricultura lproductio nshoul db emaximize da[s j mucha spossible .I nchoosin gbetwee nalternativ ecroppin gplans , farmersar eprimaril yconcerne dwit hbalancin gth ewis ht oattai n thebes tagricultura loutpu tvis-a-vi sactua lclimati c circumstanceswit hth enee dt ominimiz eth eris ktha tcro p ! productionactivitie s 'goou to fhand' ,i.e. ,th esituatio ntha t farmerslos econtro love rth ecro pproductio nproces sdu et othei r inabilityt oreac tadequatel y toadvers ecro pcondition so rt oj ' unexpected constraintst oproductio nactivities .Economizin g ill thefac eo fclimati can dbiologica luncertaint y isno tt oop tfjo r stableactivitie stha td owel ldurin g 'average'years ,i ti sto i optfo rproductio nstrategie stha tallo wadaptatio nt oclimati q andbiologica lfactor sa sthe yevolv ei nth ecours eo fth egro^ift g season.Sequentia ldecisio nmakin gan dreactin gt oa nevolvin gj rainfallpatter nallow sfo ra nefficien tus eo finformatio nand ! thusfacilitate s(potentially )th ebes tus eo fresource si nter^i b oftype so fcrop scultivate dan dreduce sth echanc eo fover -o r underinvestmenti nagricultura linputs .Instea do fgravitatin g[ • towardsa noptimu mfar mpla ncompose do ffixe dactivities ,farmer s aima tflexibl ecroppin gstrategie stha tar erobus ti nth efac eo f climaticuncertaint yallowin gth ebes tus eo fclimati c circumstancesi nan yon eyear . !

Riskcontro l Riskcontro li sa nessentia lelemen to fsequentia leconomizing. !I n planningcro pactivitie sth efarmers 'mai nconcer nregardin grijs| c 277 isno twit hfina loutpu tvariability ,thei rmai nfocu si so nho w todea lwit hvariabl eresourc e (chance)constraints .Chanc e constraintsma yeithe rresul tfro muncertai ninpu trequirement so r fromth euncertai navailabilit y ofinput scause db yvariabl e marketcondition san dbudge tconstraints .Fo rexample ,du et osuc h factorsa sa lat eonse to fth erainfal lseason ,o ra dr yspel l afterlan dpreparatio no ra tth etim esecon dcrop shav et ob e established,cro pactivit ytask s(e.g .weeding ,ploughing , seeding,replanting )ma yge tseriousl ycongeste dcausin gdelay si n cropoperation so rpostponemen to fcro pestablishment .Suc htas k congestionma yb edisastrou si ffamil ylabou ri sscarc ean dn o cashi savailabl et ohir elabou rt otimel ycarr you tth enecessar y taskso rwhe nth esuppl yo fwag elabou ri slimited .Throug h variouspractice sfarmer sattemp tt oavoi da smuc ha spossibl e suchsituation st ooccu ran dop tfo rproductio nstrategie stha t allowfo roptimu mcro pmanagemen tcondition san dris kcontro l duringpla nexecution .Suc hstrategie sar eofte nerroneousl y classifieda sresultin gfro mfarmers 'ris kaversion .The yare , however,soun deconomi cpractice .

First,farmer soperatin gi nvariabl eproductio nenvironment s typically prefercroppin gsystem stha tar eflexibl ean d diversified cropoption sallowin gfo r adaptationo fcro pplan st o a variableonse tan ddeclin eo fth erainfal lseaso na swel la s safetymargin san dflexibilit y inth eplanne d useo fcro pinputs . Itshoul db erealize d thatdiversificatio n infarmin gdoe sno ten d withresourc ean dcro pbase ddiversification .Agronomi can d managementpractice spla ya significan t rolei ndiversificatio n and flexibility.Suc hoperation-base d diversificationinclude s plantingo fspecifi ccrop so ncertai ntoposequenc epositions , staggered plantingso fric ecrop san duplan dcrops ,cultivatio no f ricecrop sdifferin gi ngrowt hduration ,etc .Throug hth e introductiono fdirec tseedin gtechnique sfarmer shav eadde da highdegre eo fflexibilit yt oric ecro pproduction .I ncontras t withtransplante d rice,thi styp eo fcro pestablishmen ti sno t dependento nhire dlabou ran dallow sa quic kreactio nt orainfal l conditions.Hence ,farmer sar eabl et orapidl yestablis heve nver y smallplot so frice .

Second,farmer sprefe ractivitie swit hinpu tprofile stha tallo w foradaptatio nt oenvironmenta lfactor sdurin gth ecro pcycle .Th e importancefarmer sattac ht osequentia ldeterminatio no finpu t investmentsan dth ewis ht ocontro linvestmen tris ka smuc ha s possiblei sclearl yreflecte d ina commo nrule-of-thum buse damon g bothric han dpoo rfarmers :'d ono tinves ttoo~mucE~to oearl yi n A thegrowt hcycl eo fcrops' .Th eide abehin dthi srule-of-thum bi s thatth eearlie rth einpu tinvestmen ti smad eth ehighe rth e chanceo fa ninvestmen tlos sdu et ouncontrollabl eris kfactors . Thus,i ti sno tsurprisin g thatfarmer sd ono tfollo wrecommende d practicestha tsho wa ninpu tprofil eo fhig hinpu toutlay sa tth e starto fth egrowt hcycl eo fcrop ssuc ha sbasa ldresssing so f fertilizer,pre-emergenc eapplication so fherbicides ,an d profilacticapplication so fpesticides .I tals oexplain swh y 278 farmers do not transplant but wet seed second rice crops,while ^ in the long-run,transplantin g second rice crops would certainljr yield higher returns and lower yield risks.

Third, apart from the timing of input investments,farmer s also attach importance to the flexibility or elasticity in the timing of input application or the carrying out of crop management tasks,. Such flexibility is particularly important to young households with limited labour resources that may find difficulty in the management and monitoring of crops requiring strict timing of operations and application of inputs.Als o for poor farmersthe ; necessity to postpone input application isofte n inescapable because of timely budget constraints caused by delayed harvestings or poor results of crops the proceeds of which are needed to finance the inputs.On e of themai n reasons why young farmers continue togro w single BE-3 crops is that this crop is relatively easy tomanage .Compare d toHYV s the timing of input applications ismuc h more flexible whereas it requiresmuc h less monitoring with regard towate r control.

3^ Implications of sequential economizing Sequential decision making regarding crop establishment and i adjustment of inputs in the course of crop growth developmenthats ; threemai n implications on decision theory. First,a single i optimum farm plan does not exist.I f the growing season's duratibp is variable and farmers' strategies include options toadap t the! ! establishment of crop activities to a variable onset and j ; termination of rainfall and adjust input application levels to I i actual crop growth conditions,a n expected profit maximization j j plan isa smeaningles s as an average rainfall year.Thus , apart \] from the problem that it is difficult to determine a long-run [ expected profit maximizing solution to the whole-farm planning problem, amor e serious problem is that such solution isno t onlirj sub-optimal for any one year,i t is not even optimal in thelong- ­ run. I ;

Second, it is difficult togeneraliz e about farmers' choice behaviour in terms of economic efficiency. Because choice situations follow each other sequentially throughout the production cycle,farmer s do not make one decision, they makemai ^ / decisions. Some of these decisions will beo f a strategic nature including many decision variables.A s they will profoundly affec^ the freedom of decisions later in the production cycle (e.g. initial crop planting decisions), they are difficult tomake . j I Othersma y include few decision variables and are relatively ' ; isolated from other decisions and much easier tomak e (e.g. fertilizer application). In the case of complex choice situations such aswhol e farm planning, best decisions are very difficult to define ex-ante,fo r farmers aswel l as professional decision analysts. However,whe n we consider the far simpler decision problem of choosing a certain level of fertilizer, the best input level ismuc h more clearly defined and farmersma y come very cloge tooptimizin g behaviour.Thus , depending on the particular typeoj f 279 decisioninvolved ,farmer sma yb ebot h 'satisficers'an d 'optimizers'.

Third,timin go fdecision si so fcritica limportance .Th epassin g oftim eenable sa bette rassessmen to fth estatu so fmos tfactor s influencing productionsuc ha sclimate ,leve lo fwee dan dpes t infestation,inpu tavailability ,marke tprices ,etc .However ,i t alsoreduce sth eflexibilit yo fth esystem ,i.e. ,i treduce sth e numbero fpossibl ealternative swhic har ebot htechnicall y feasiblean deconomicall y justified.Goo d farmmanager sar e distinguished frompoo rfar mmanager sb ythei rabilit y tostrik ea finebalanc ebetwee nthes etw oinfluences .Goo dfarmer sd ono t simplymak egoo ddecisions ,the ymak egoo ddecision sa tth erigh t time.

9.2 Risk,economi cefficiency ,an dequit y Perceivedris k Giventh evariou sattribute so ffarmers 'ris kassesmen ti twil lb e cleartha ti ti sdifficul tt opinpoin ta singl eparamete rtha t couldtak eaccoun to fth efarmers 'ris kperception .Fo rth e followingreasons ,th einfluenc eo fris kan duncertaint yo n decisionmakin gsimpl ycanno tb ereduce d toa singl euniversa l pieceo fadditiona linformatio nabou tchoic ealternative stha t togetherwit hothe rattribute si suse dt ocompar eth e attractivenesso rutilit yo falternativ ecourse so faction .

First,farmer sma yfac edifferen tproductio nrisk st oth esam e productionactivit ydu et odifference si nris kcontro lcapacity . Perceived risko fa productio nactivit ydepend si npar to nth e farmers'abilit yt oreac tadequatel yt ocontrollabl eris kfactors . Forexample ,wee dincidenc ei ndr yseede d ricema ypos ea sever e threatt ohousehold swit hlimite d labourresources .The yma y eitherfac eth eris ko fa ninsufficien t supplyo flabou rfro mth e wagelabou rmarke to rinsufficien tfinancia lmean st ohir ewag e labour.Becaus eo fa relativel yhig htim eexpenditur efo rnon ­ productiveactivities ,youn ghousehold sar ei na ver ytigh tlabou r supplysituation .Compare d toth emiddle-age d andol dhouseholds , theyar ei na muc hweake rpositio nt oquickl ymobiliz elabou ri n casefar mcondition srende rsuc hnecessary .Consequently ,thes e householdsfac e(ceteru sparibus )highe rproductio nrisk sdu et oa lowerleve lo fris kcontrol .Also ,t oth eexten ttha tris kcontro l dependso ncas hinput s(pesticides ,herbicides) ,poo rhousehold s thatencounte rproblem si npurchasin gthes einput sfac ehighe r productionrisk scompare d towealth yhouseholds .Take ntogether , bothfactor scaus eyoun gnon-surplu shousehold st ofac eth e highestproductio nrisks ,wherea sthe yar ei nth eweakes tpositio n tobea rth econsequence so fthes erisks .

Second,farmers 'ris kperceptio ncanno tb esee ni nisolatio nfro m theirfinancia lris ktakin gcapacit yan dth enee dt osecur eth e financialviabilit yo fth ehousehol dunit ,bot hi nth eshor tan d longterm .Farmer sma yfac edifferen tfinancia lrisk st oth esam e 280 input investment due todifference s in wealth position (surplus production capacity), whereas for the same household perceived i ,Jl risk may differ between periods because of changes in the Jhousehold' s financial position.Poo r farmers are often forced to 'conside r specific investment losses attached to certain inputs of an activity because of the immediate consequences of sustaining such losses for the short-run financial position of the households.Unde r conditions of a high level of indebtedness, minor risks in the sphere of production may translate into a substantial risk in the sphere of financing household consumption.

Third, farmers' response toris k cannot beassesse d independently from the timehorizo n over which behaviour isevaluated .Ther ema y :exist conflicts of interest between risk reduction in the shortt /and medium term aswel l as between themediu m and long term. As part of a 'safety-first' type of strategy, non-surplus,household s

A conflict between security objectives also arises with , investments in education.W e have seen thatmiddle-age d househol4si give high priority toeducatio n of their children in order to secure the long term viability of the household unit.Th e bulkof ; these expenses has to bemad e at the start of the agricultural season,thu s immobilizing investments for agriculture and reducing income security in themediu m term. In fact,man y non-surplus middle-aged households borrow substantial amounts to finance the education of children.

Risk taking willingness and economic efficiency Research has historically focused on farmers'aversio n to • production risk resulting from uncontrollable risk factors and I I investigated the relationship between the farm's output or return' :

i variability and the farmers'willingnes s totak e risks.Withi n | j this context reduction of output variability or low return [ 5 probability is seen as the principal way through which farmers \ , reduce household income risk, i.e., risk averse farmersar e j I ;Mwi:'-lin8 t0 sacrifice agricultural income*t oincreas e the stability f ^./f^of the income flow.Amon g others thisha s led to pleas forstable ; '^v\i!bu tlo w yielding technology requiring low levels of external » 'inputs.

From the foregoing, itwil l be clear that it is difficult to evaluate farmers'respons e to risk in such general terms.Ris k constitutes different entities,ris k perceptions differ between farmers, and for the same farmer perceived risk may change over 281 time.Thus ,withou tspecifyin gth etyp eo fris kan dth eperio dof4L > decisions,i tcanno tb eevaluate dwhethe rris kdeter sinvestments!''-' \f' ininput so radoptio no ftechnolog ymor efo ron ecategor yo f ,?' farmerstha nanother .Fo rexample ,w ehav esee ntha tyoun gwealth y farmerssho wcautiou s(ris kaverse? )behaviou rwit hrespec tt oth e adoptiono f 'dryseede d- we tseede drice 'croppin gdu et oa perceivedchanc econstrain to nwag elabour ,bu ta ttime s overinvesti nfertilize rinputs .I ncontrast , middle-agedpoo r farmersunderinves ti nfertilizer sdu et operceive d financial constraints,bu tincrease dto orapidl yth escal eo fdoubl eric e cropping (riskseeking?) .

Assessing theimpac to fris ko neconomi cefficienc yi seve nmor e difficult.Apar tfro mth eabov eproblems ,quantitativ eresearc h intoth eissu eo frisk-induce d underinvestmenti nagricultur ean d misallocationo fresource sface sseriou sspecificatio nproblems . First,i tis—difficult ,i fno timpossible ,t odetermin eeconomi c optimafo rcomple xchoic esituation ssuc ha swhole^tar mplannin g whTchallo wsequentia ldecisio nmakin gan dris ktaking ,especiall y whendecisio nmakin gtake splac ei na dynami cenvironment .Second , iti sdifficul tt oasses sthe_^x£ent_to_whic hris ki sresponsibl e fordevxa-tiQn gfro mth eeconomic. .joptimu m"due _to~the"possibl e influenceo fothe rfactor ssuc ha sperception so freturn so r farmers'preference sothe rtha nris kaversio n (timepreference s forincome ,leisur epreferences ,etc. )

Hence,on eshoul dgenerall yb ecarefu lt otypif ybehaviou ra sris k aversebase do nsuperficia lobservation so fth efarmers ' determinationt okee pvariabilit yo fproductio nwithi nreasonabl e limits.First ,man yfarmers 'practice stha thav eevolve dove rtim e' serveth edua lpurpos eo fobtainin g 'best'return st oinvestment s j./ \ whilekeepin gris ka ta reasonabl eleve lsimpl ybecaus esuc h practicesmak eefficien tus eo fvariabl eenvironmenta lfactors . Second,farmers 'aversio nt ofluctuation si nagricultura loutpu t oftenha sa soun deconomi cbasis .Apar tfro mris kaversion ,ther e aregoo deconomi creason sfo rlimitin glarg ebetween-yea r fluctuationsi noutpu tsuc ha slimitin ginteres tpayment s associatedwit halternatin gborrowin gan dlendin gi ncas e borrowingcost sar ehighe rtha nreturn st olending .

However,th eeffec to fattitudina lris kaversio no ncro pactivit y choicean dinvestmen tbehaviour ,i.e. ,th efarmer' sunwillingnes s totak eproductio nrisks ,i slikel yt ob emarginal .Give nfarmers ' owneffort st oincreas eincom efro magricultur eb ysubstitutin g stable 'traditional'ric eactivitie s(e.g .transplante d BE-3)wit h HYV-based directseede dric ean ddoubl eric ecropping ,w ema y safelyconclud etha thousehold sar eno tmuc hintereste di n stabilizingagricultura loutpu ti fsuc himplie sa neve nmoderat e reductioni nperceive d income.Thi sparticularl yapplie st o householdstha thav esufficien tfinancia lmean st obea rth e consequenceso fris ktaking .However ,als ofo rhousehold stha tar e ina poo rfinancia lposition ,stabilizin gth elong-ru noutpu tflo w haslittl emeanin ga sshort-ter msafety-firs tincom egeneratio n 282 that maximizes the short-term financial security of the unittalfle s precedence over long-term security. In fact,b y concentrating on| j short-term income-earning opportunities poor households increase; ; production risks in self-employed agriculture.T o the extent that risk averse attitudes may cause a somewhat conservative choice i behaviour, such effect appears to bemor e than compensated forb|y i optimistic return perceptions. '

Risk taking ability and equity Apart from unacceptable chance constraints that may affect both poor and wealthy farmers,th e usual reason why farmers choose for less risky options is that they are not able to take the financial risks. Consequently, risk taking inagricultura l production is i highly situational.A t the start of the growing season,th e immediate need to satisfy consumption requirementsma y simply I prevent poor households from taking even moderate risks in the i i sphere of agricultural production (e.g. losing one bag of rice i seeds in dry seeding). However, the same households arewillin g to seize high risk opportunities in agriculture provided they areill ' a financial position to doso . i Thus, it should be realized that the fact that farmers are j generally averse to financial risk taking, i.e., the risk of I i becoming overextended through excessive borrowing, does not necessarily imply that they are also averse or not willing to take jproduction risks.I t is not somuc h the perceived (business)risl ci Ii n agriculture that prevents poor households from choosing risky alternatives, it is the necessity to choose for particular activities (limiting other choice options)tha t secure immediate subsistence needs and avoid specific investment losses to keep financial risk at amanageabl e level.Fro m a production point ofI; view farmers simply cannot be classified as risk seekers or risk ! averters.The y may fit both classes depending upon the particular type of decision studied and the period inwhic h and conditions j ; under which the decision ismade . I Given the continuous indebtedness of non-surplus households, i j perceived financial risk may constitute a serious cause for underinvestment in agriculture,particularl y as poor households j ' tend to saturate cash investments with more labour than wealthyi households.Fo r households faced with a high level of | ! indebtedness, sharp interest rates for loansan d the risk of a j ; spiralling debt accumulation caused by insufficient surplus production capacity, even small risks from a production point ofi i view may loom large financially. Poor farmers are often forced to! capital rationing for productive investments due to the high costj of sustaining subsistence (e.g. interest payments for consumptioni loans)an d the necessity tokee p financial risk on an acceptable level.Hence ,give n that productivity increases have increasingly become dependent on cash inputs,difference s in financing capacity (or, alternatively, risk taking capacity)ar e likely totranslate * intowidenin g income disparities between poor and wealthy households. 283 Summarizing, we conclude that it isdangerou s to base risk analyses on superficial observations and generalize about risk behaviour of small farmers: . Many farmers' strategies and practices - often erroneously v.-identifie d as resulting from risk averse behaviour - serve the f|na1 pmr_j2o_geo f reducing risk and attaining best economic results. Such strategies are often based on sequential decision making and risk control,allo w for an optimum use of environmental resources and, thus are sound economic practice. .Risk describes various phenomena, is not a constant entity and changes over time.Difference s in financial risk taking capacity (surplus production capacity)an d resource composition (life cycle status)ar e such that in an apparent homogeneous class of rural households,differen t household categories perceive different production risks aswel l as financial risks to similar activities and, thus show a different response to risks present in agricultural production.Ther e may even exist conflicts of interest between risk reduction in the short and medium term and in themediu m and long term. .Households are used to risk taking inagriculture .The y are \J not much interested in stabilizing agricultural_output if such implies an even moderate re.ducJLion.-inpereeiveft-income . If risk-induced underinvestment is important, the cause should be found in the limited capacity of poor households to take financial risks rather than in risk averse attitudes. Given the risk of a spiralling debt accumulation, perceived risk may constitute a serious cause for underinvestment in agriculture and widening income disparities between poor and wealthy households.

9.3 Implications on risk theory and research Focus The main implication of the above findings istha t the question whether farmers like or do not like to take risks is,t oa large extent, irrelevant.Apar t from problems encountered in establishing the existence and effect of attitudinal risk aversion, it appears questionable whether such knowledge would improve our ability to deal with risk issues that directly concern farmers and affect agricultural development. Far more important than posing the question towha t extent farmers avoid risk and what the effect iso f risk avoidance on the economic efficiency of production, is the issue of how farmers deal with it.T o what extent do farmers effectively manage"agrTcTIltufa Tproductio n in the face of an uncertain production circumstances. Emphasis on risk management forces one to consider how farmers can be assisted inmanagin g the risk they necessarily encounter in their crop production activities and how their capacity to take financial 1 risks can be improved. Itappear s that - within the context of available technology and knowledge - farmers are far ahead of \ 1 I

284 ;

!economist s and agronomists alike inmakin g the best use of the : •variabl e opportunities provided by the environment. In this \ •- respect ,ther e isa nurgen t need for scientists tocatc h upwit h; , < I farmersan d learn from their risk management strategies both in[tfc e *•;{ sphere of agronomic management and financing production and i\ consumption.

Choice models As analytical tools,mos t operational risk programming models are largely inadequate to deal with risk management strategies.Thi s directly results from theeconomists ' tradition to strongly adhere to optimization and sacrifice problem representation for optimizing algorithms. In contrast,farmer snecessaril y have toconside r a richer set of properties of the real world and - depending onthf e complexity of the choice problem and their experience -ma yeithjef r strive for satisfactory solutions (crop activity choice)o r 'neajr optimum' solutions (fertilizer application).

Becauseo f the divergence between theoreticalmodel san d real-lite decisionmaking ,existin g choicemodel s often dono t address choice problems farmers are facing in reality.Amon g others,the y castfche analysis ona static and timeless environment,wherea s farmersar e concerned with between-year adaptation and within-year sequential economizing and risk control;the y emphasize final output risk, ', whereas farmers are interested in specific investment losses;thfe y focus on production and production risks,wherea s farmers have to; deal with conflicts between consumption and production decisions, and aremor e concerned with financial than production risks.

When the objective of economic choicemodel s is toai d farmers in making better decisions or are otherwise used to explainfarmers ' behaviour in variable production environments,ther e isa need to , change the focus from improving upon choice algorithms to abetter * design and structuring of the choice problem itself.I f further j model development is restricted toa refinement of thedecisio n; algorithm, it isver y likely to bea n inefficient use of scarce \\ research resources.However ,o n the other hand, it isno t feasible toemplo y asa standard tool normative decision models that dotik; e into account the relevant aspects of farmers' risk consideration^.i Such models (e.g.stochasti c control programming)ten d to become, ; too complex,dat a demanding and,mor e importantly, too specifictt o certain choice situations to be generally applicable.Th eincrea$ej d benefits,i n terms of improved decision making at the farm level, ; that may bederive d from applying the resultso f suchmodel s isiiof t likely to cover the cost of developing and applying suchchoic e i I models. I ;

Thus, it isno t recommended to concentrate research resources on| the development of normative farm planning models that attempt tq adequately represent a risky choice in complex decision situations. Of course,thi sdoe sno t imply thatanalyzin g risk ofne w crop-i technology isunimportant .Neithe r does it imply thatwhole-far m| > modelling isuseless .A sa modellin g tool, linear programming 285 provideseconomist swit ha usefu lmean st ostructur ean d systematizeinformatio nabou tfarmin gsystem san dma yprovid e valuableinformatio nregardin gpossibl econstraint st one w productionactivities .Th epoin ti stha ton eshoul dno tattemp tt o includeris kconsideration sa sa standar delemen ti noptimizatio n routines,neithe ri nth eobjectiv efunctio nno ra spar to fth e programmingmatrix .

Researchmethodolog y Riskresearc hma ydea lwit h(a )improvement si nfarmers 'existin g riskmanagemen tstrategies ,an d (b)ex-ant eris kanalysi so fne w technologies.Researc hint oth eeffec to fris ko nfarmers ' decisionmakin gshoul dstar twit ha ninventor yo fth evariou sris k factorspresen ti nth eenvironmen tan dthei reffec to nth e feasibilityan doutcome so fproductio nactivities .Suc hinventor y should focuso ncomponen trisk s(e.g .no tannua lrainfal l variability,bu tspecifie dfo rcritica lperiods) ,us ejudgement s offarmer sa swel la sothe rknowledgeabl epersons ,and ,t oth e extentpossible ,contras tsuc hinformatio nwit hexistin gdat ao n riskfactors .Nex ti tshoul db einvestigate dho wfarmer sdea lwit h theseris kfactor san dt owha texten tthei rris kmanagemen t strategiesar eeffective .Askin grelevan tquestion sconcernin g riskmanagemen tstrategie sshoul dlogicall ypreced ean yattemp tt o quantitativelyasses sth eriskines so fproductio nactivities ,an d inclusiono fdetail so fstrategi cdecisio nmakin gan dris kint o analyticalmodels .Wit hth enotabl eexceptio no fJodh a(1978 , 1984),studie sconcernin gris kmanagemen taspect so ffarmers ' behaviouran deconomizin g strategiesar epresentl yextremel y limited.Contrastin g farmers'plan swit hrealize dproductio n activitiesma yprovide ,o nth eon ehand ,valuabl einsight sint o whatproductio nstrategie sfarmer sperceiv ea sfeasibl eand ,o n theothe rhand ,ho wfarmer sadap tsuc hstrategie st oactua l environmentalcondition san dinterna lhousehol dcircumstances . Insightint oth ecas han dproduc tflow so fhousehold si sanothe r prerequisitefo runderstandin g farmers'ris kmanagemen tstrategies .

Oncesuc hinformatio ni savailable ,researc hca nbette rb efocuse d onthos eris kissue stha tcoun ti nfarmers 'decisio nmaking . Moreover,o nth ebasi so fsuc hknowledg ei tca nb eestablishe d whattyp eo finformatio ni srequire d byfarmer san dho wsuc h informationshoul db epresente d tofarmers .I tappear sthat ,i n mostcases ,a relevan tris kassessmen twit hrespec tt ovariabl e resourceconstraint sca nb ecarrie dthroug hsimpl esensitivit y analysisusin glinea rprogramming .B yvaryin grelevan tparameter s ofth eprogrammin gmatrix ,a nide ama yb eobtaine dabou tth e 'robustness'o fth esolutio nvis-a-vi svariabl einpu trequirement s andoutpu tlevel sa swel la sproductio nconstraints .Suc h sensitivityanalysi sshoul dcertainl yinclud eth eeffec to fa variablerainfal lpatter no nth efeasibilit yo fsolution sb y employingvariabl elan dand/o rdraugh tpowe rconstraints .I t shouldals otak eint oaccoun tth edail ynecessit y tocove r subsistenceneeds . 286 In analyzing theabov e aspects of farmers'behaviou r a distinction f should bemad e between,o n the one hand, farmers' short-term \ management (coping)strategie s asobserve d in any one particular! year and,o n the other hand, farmers'long-ter m adaptive strategies.Fo r situations where thecontex t of decision makingli s highly determined by variable environmental factors such as rainfall, basing analysis of farmers'economizin g principles onj ; one or two year observations is extremely dangerous. Indications of such general behaviour or decision making perspective can only be obtained from a careful assessment of how agricultural development evolved in the past and against this background what: changes are taking place in the farm-household system atpresenti . For any serious study regarding (aspects of)farmers 'decisio n making,a historical analysis of past agricultural development ipi mandatory. However, this should not be intepreted as a plea for | long-term, massive data gathering excercises,th e results of which often become available after they have lostmuc h of theiractual : value. Discussions with farmers and other knowledgeable persons' should usually prove adequate in case researchers are sensitive to the dynamics of agricultural development and the role various | segments of the community play in thisprocess . i IAgricultura l technology generation '^•fiAgricultural research should not concentrate too much on f 'h}developing a restricted number of 'best'agricultura l techniques:j ''eveni f such strategy takes into account differences in production environments. In variable rainfed environments such technology j\ :simpl y doesno t exist,wherea s for different categories of farmers ;th e best type of technology may be quite different.Farmer s are j ' ;mor e benefited by research that aims at developing and testing \ diversified production strategies comprising various optionsthat } *ar e flexible and robust in the face of climatic and biological ; iuncertaint y and allow for an optimum use of the varying i |opportunitie s provided by the environment. Agronomists should jallo w formor e environmental variability in the design of their j ' 1experiments . | I Apart from yield potential,pes t and diseases resistance,drought ! tolerance,etc. ,agronomi c research should pay more attention toj \ the development and testing of technologies that allowmanagement ! flexibility and show input profiles that facilitate sequential[ adaptation to environmental factorsan d sequential economizing j regarding input use.I t is striking that quite a number of ! technologies that have been advocated by agricultural development) programmes in the area show thewron g input profile,i.e . high input investments at the start of the growth cycle of crops.Suc h technologies may beagronomicall y sound and even economically attractive when using a long-run average cost-benefit analysis. However,whe nevaluate d within the context of sequential decision making and taking into account risk in terms of early investment loss such techniques may not be of interest tofarmers .

The scope for quantification of production risks of new 287 agricultural technologies prior to introduction appears limited. This is primarily due toa lack of time series data on most uncertain environmental factors influencing agricultural production.Moreover , if such time-series exist they are likely to be very location specific, limiting the general applicability of the results based on such data.However , one should not concentrate toomuc h on the quantification of yield or net return risks. It often suffices to compare new technologies with existing/. techniques on anumbe r of salient risk features such as .V* susceptibility to uncontrollable risk factors,nee d for cash i- inputs, input investment profile,marke t dependence,etc ,and , to the extent possible,evaluat e interactions with other activities to identify chance constraints to the activity. In such areas,a qualitative assessment isusuall y sufficient.

If quantification of production risks is required (e.g.fo r technologies with high initial investment outlays), the earlier discussed random coefficient model may provide an efficient means of using existing information, i.e. cross-section and time series data. A promising alternative toris k assessment based on such a statistical technique may be simulation modelling employing water balancemodel s incorporating the essential features ofbio - dynamics of crop growth.Ris k is best evaluated in terms of the size of the investment loss relative to the level of household income and its likelihood of occurrence.However , incorporation of risk aspects as criteria in the technology generation process should not induce researchers to disregard too quickly highly itlr profitable techniques that,i n first instance,appea r to be too risky.Th e example of the rapid introduction of the 'dry seeded - wet seeded rice' cropping pattern should suffice to warrant against conservative research strategies.

Farmers' involvement In order to increase the efficiency in the useo f existing \ information and improve upon the effectivity of technology ] generation,a better use should bemad e of both the researchers' / and farmers'knowledge .Instea d of extensive testing of technologies on experimental stations,i t isgenerall y far more efficient to confront researchers with farmers and guarantee the farmer's participation in the technology generation and testing process as early as possible.I n the design and testing of new technologies it is virtually impossible to take into account all desirable properties (some of which may be quite unexpected)o n the basis of which farmers assess the overall attractiveness ofa technology. Also,i ndirectin g agricultural research and setting of research priorities,farmers 'knowledg e concerning themicro - ecology of the environment and existing crop and livestock production systems should be used to the fullest extent possible.

Although adaptive research projects on farmers' fields are now becoming a regular feature inmos tThir d World countries,the y are < generally still extremely limited in scale,highl y dependent on expatriate personnel,an d often poorly integrated into the 288 national research system. Instead of limiting farmers' ( participation in the testing of technology to such small ! laboratory-like research projects,suppor t to farmers'ow n . experimentation and testing of technologies should become an integral component of regular agricultural development programmes. Farmers should beassiste d in their experimentation by providingi them with the techniquesan d financial means aswel l astechnica l support in terms of experimental design,interpretin g resultsan d solving of problems.I t is striking that commercial chemical companies in theare a already started with 'experimentation kits' some fifteen years ago,wherea s official development programmes; often restrict experimentation with advocated technologies by the setting of toohig h entrance thresholds (e.g.credi t packages for one hectare and above). In such type of programme,th e role of ^he extensionist should change from onewh o purely transfers information (the value of which isno t to be questioned), toonf t who facilitates adynami c flowo f information on new possibilities and feedback of experiences between researchers and farmers. , ,

9.4 Policy measures to reduce the impact of risk onagricultura l; development Inconsiderin g policy alternatives thatma y be employed toredude ! the negative effect of resource-induced risk aversion,w ema y j I either think of measures that: I ' . reduce environmental risk and uncertainty; . areaime d at reducing the effect of risk factors on the outcome of production activities; j i . increase the farmers'ris k taking capacity, i.e., reducethe ' financial consequences of risk taking. — . '. Reduction of environmentalris k and uncertainty i The first category ofmeasure s includesal l those measures that increase control overenvironmenta l variability.Measure s to j reduce the effect of adverse physical environmental factorsma y I j include (supplementary)irrigation , flood protection measures, j• soil conservation,etc .Thes e measures either serve the dual ' purpose of substantially increasing returns and reducing the i variability of returnso r may be specifically designed toreduc e the incidence of severe risk factors.The y usually require heavy capital outlays and,i n the short term, the benefitsma y not , always be directly clear to farmersa s is the case,fo rexample, ; with soil conservation measures.Althoug h theeffec twil l be i difficult to quantify,i n evaluating such measures theadditional - economic benefits in termso f a reduced effect of risk onactivit y choice should beaccounte d for. | A second type ofmeasur e is toreduc e biological risk (pestan d diseases)b y the useo f pre-emergence herbicides or profilactic applications of pesticides.However ,w e have indicated that although suchmeasure sma y reduce physical yield risk,the y may (and certainly doi n themin d of farmers)increas e net return 289 risk,wherea sth elong-ru neconomi cbenefit so freductio ni nyiel d variabilitythroug hsuc hmeasure sar eofte nno tclearl y established.Moreover ,a libera lus eo fsuc hchemical sma y seriouslyaffec tth eecosystem .Anothe rtyp eo fbiologica lris k controlinclude scultura lpractice ssuc ha ssimultaneou splanting s ofcrop st opreven tpes to rdiseas ebuild-up .

Athir dtyp eo fmeasur eaim sa treducin gmarke tpric erisks . Althoughi ti softe nargue d thatpric estabilizatio nwil lreduc e risk,th eopposit ei squit eplausibl esinc eprice sar eofte n negativelycovarian twit hyield .However ,give nth efac ttha tpoo r householdsi nyear so flo wproductio nfac eth emarke ta sconsumer s interested inlo wbuyin gprice srathe rtha na sproducer swh oma y benefitfro mhig hsellin gprices ,pric estabilizatio nma y stabilizeth eincom ean dexpenditur eflo wo fpoo rrura lhouseholds .

Fourth,i ti softe nnecessar y toincreas eth ereliabilit yo fth e technicalan dinstitutiona linfrastructure .I ti sno tuncommo n thaton eo fth echie fsource so fris ki nrura larea si sa nill - functioninggovernmen tsuppor tsystem .Instabilit y inth esuppl y offar minputs ,poo rmarke tinfrastructure ,poo rtimin go rnon ­ availability ofcredit ,an dinadequat eextensio nservic ear eal l sourceso fris ktha tinduc efarmer st ob ecarefu lt obecom eto o dependento nthem .

Fifth,reductio no fperceive d riskdu et oth eprovisio no f adequateinformation .Althoug hw ehav esee ntha tfarmer sma y dih obtaina surprisingl y adequateintuitiv egras po ftechnolog y mill/I A throughattentiv eobservation ,thi softe ndoe sno timpl ytha tthey ;| understand thebasic so fth etechnology ,Suc happrehensio ni s h sufficienta sTTon gas "environmenta lan dothe rfactor sconditionin g therespons eo rpreformanc eo fth etechnolog yremai nconstant . However,i ncas ecircumstance schange ,farmer sma yb ea ta los sas , toho wt oadap tth etechnology .Further ,becaus eo flac ko f { information,farmer sma yb equit eselectiv ei nthei rsearc hfo r newtechnologie stha talig nwit hthei rknowledg ebase .

Increasing farmers'ris kcontro l Thesecon dcategor yo fpolic ymeasure sdoe sno tai ma treducin g theoccurrenc eo fris kfactor sbu treduc ethei reffec to nth e returnst oactivities .First ,the yinclud eal lth eearlie r discussedmeasure stha tincreas eth eflexibilit yo fth eproductio n systeman dallo wsequentia ldecisio nmakin gi nth efac eo f evolvingclimati can dbiologica lconstraint si nth ecours eo fth e growing season.Second ,reductio no fcro pyiel d variabilityi s attained throughbreedin gfo rvarietie stha tar eresistan tt opes t anddisease san dtoleran tt oadvers eclimati cfactors .Yiel d stabilitycriteri aar eno wincorporate d asa standar dgoa lo fmos t cropresearc han dbreedin gprogrammes .However ,i tappear stha t thegeneti cbas eo nwhic hth ebreedin gfo rstabilit ycommence si s extremely small.Becaus eo fth eerosio no fvarieta ldiversity ,th e developmento fa fe wvarietie s 'parexcellence 'ma yprov et ob ea mixed blessingi nth elon gru na si tma ysubstantiall yincreas e 290 the risk of large-scale crop failures due to susceptibility to (unforeseen)pest s or diseases.

f It should be noted,however , that - within the context of small- scale agriculture inSoutheas t Asia- we are not pleading fora > stable, low-external input technology. Although such research is H^ ^ certainly warranted (particularly asa hedge against worsening '•1 ') cash input-output price ratios), for the time being cash inputs i such as fertilizers and pesticides are prerequisites for the > " survival of small farm units.Fo r poor households the best option 4 is not to generate low risk, low yielding technology, but to provide them with better facilities to cope with the financial \ consequences of (inevitable)ris k taking in agricultural \ production.

Improving farmers'ris k taking capacity The third category of measures aims at increasing the ability of farmers to take risks.On e of themos t obvious forms of government ,interventio n to offset the consequences of risk taking and thus; - reduce the effect of risk aversion is crop insurance.Here ,w e i ; will not discuss in detail the growing body of literature concerning the effect and economic rationality of cropinsurancfe i However,i n general,on e should be careful in considering cropi insurance asanothe r panacea for getting agriculture moving I (Roumasset, 1979).Give n the lack of data onwhic h to baserisk ; assessments, insurance programmes generally face serious j difficulties in establishing premium structures that are i actuarially fair (i.e., break-even in the long-run), whereas it is well-known that farmers are rarely able and willing to shoulder | such insurance premiums (Ahsan, 1983). This causes insurance j programmes to seldom be self-liquidating, a problem that is [ '< further aggravated by high administration costs and the fact thet the principle of risk pooling, the ultimate objective of i . insurance,ofte n does not materialize due toadvers e selection.1 This is the tendency that only the risk prone farmers purchase insurance or that farmers only insure those fields that are particularly unfavourable to cultivation.

It is further questionable whether such programmes would indeed reduce risk averse behaviour and increase agricultural output. '• I Because of the problem of 'moralhazard' , the phenomenon that tlM insured farmer takes lesscar e of the 'insured-against event',j crop insurance may in fact cause reduction of agricultural output; and induce economically inefficient behaviour.Moreover ,w e have seen that surplus farmers have sufficient means to diffuse income variations and are not likely to be interested in crop insurance unless premiums are highly subsidized. Poor farmers are not likely to be able toaffor d actuarially fair insurance premiums,wherea s restricting the participation in subsidized insurance programmed to poor farmers severely restricts the risk pooling function ofi insurance.I t generally appears that crop insurance can only be• defended for those situations where a very limited number of ! clearly defined and measurable risk factors cause substantial ! i, variations in production. 291 Asecon d typeo fmeasur ei nthi scategor y ist oimprov ecredi t facilitiesi nrura lareas .Acces st orelativel ychea psource so f instutitionalcredi ti spresentl y stronglybiase d infavou ro fth e wealthierhouseholds .Ofte npoo rhousehold scanno tmee tth e requirementso fbecomin geligibl efo rforma llending .The yd ono t haveownershi p rightst olan do rothe rtype so fcollatera l(e.g . workinganimals )o ri ncas eo fnon-collatera lsupervise dlending , theminimu m lendingfloo ri sse tto ohig hrelativ et oth e borrowingcapacit yo fth ehousehold .Althoug hi tappear stha t informalsupplier so fcredi tca nlargel ymee tth edeman dfo r credito fpoo rhouseholds ,th ehig hcos to floca lcredi ti sa majorfacto rcausin gunderinvestmen ti nagricultur edu et o perceived financialrisk scause db yth ehig hcos to fsustainin g subsistencei ncas eo finpu tinvestmen tlosse so rlo wproductio n outcomes.

However,especiall y poorhousehold swit hsufficien tfamil ylabou r resourcessho wa hig hrat eo flabou rutilizatio npe rhectar ewit h a lowleve lo fcomplementar y cropinput ssuc ha sfertilizers .Thi s impliestha tth emargina lbenefit sfro ma nincrease d useo f fertilizerb ypoo rfarmer swil lsubstantiall y exceed thoseo f wealthier farmers,an di ncas ewealth y farmersar eclos et oth e optimum levelo ffertilize rapplication ,wil lsubstantiall yexcee d thecos to fcapital .Thus ,th eprovisio no fforma lcredi tfo rpoo r householdswil lbot hincreas eth eeconomi cefficienc yo f productionan dwil lreduc eth eoveral lris kthes ehousehold sar e facing.I tshoul d beclear ,however ,tha ti nmeetin gpoo r households'credi tneed smuc hmor ei sinvolve d thana polic y towardspur efar mcredit .I norde rt omee tfluctuation si nth e provisiono fsubsistenc egood sa swel la st osafeguar d households frombackgroun drisks ,farm-househol d lendingmus tinclud e facilitiestha tallo wlendin gthroughou tth eyea rfo rbot h consumptivean dproductiv euse san dmus tinvolv eflexibl eloa n amountstha tar erealisti cwit hrespec tt oth erepaymen tcapacit y ofth ehousehold .

Finally,a nimportan tmean so fimprovin gth elong-ru nviabilit yo f smallfarm-household si st oprovid efo rmeasure stha tstimulat e incomeearnin gopportunitie soutsid eagriculture .Th evillag e economy showssign sthat ,i nspit eo fwidesprea d adoptiono f 'modern'varietie san dcas hinputs ,i ti sreachin ga saturatio n pointwit hrespec tt oth efurthe rabsorptio no ffarm-households . Thescop efo rfurthe rimprovement si nagricultura ltechnolog yi s difficultt opredict .However ,i tshoul d berealize d thatafte r farmershav ereache d theleve lo f6- 7 tonso fric eproductio npe r hectareunde rrainfe dcondition s- shor to fintroducin girrigatio n ora substantia lreductio ni nlandren tlevel s- fe wmajo r breakthroughsi nric ecro pproductio nca nb eexpecte d thatwoul d substantially increaseth elabou rabsorptio ncapacit yo fth e agriculturalsector .T opreven tagricultura linvolutio nan da n increasei nth enumbe ro fhousehold stha tfac eseriou ssubsistenc e risks,urgen tattentio ni srequire d forth edevelopmen to f(semi- ) industrialactivitie si nbot hurba nan d ruralareas . [ i 293 GLOSSERY OF KINERA'A TERMS agsa landtenur econtrac twit h50:5 0sharin go fproductio nbetwee n landowneran dtenan t alili localcas hloa no fwhic hbot hth eprincipa lsu man dinteres tar e repaidi nrice ;effectiv emonthl yinteres trat e4. 2- 7.7) 5 alogbate typeo fIndia nSpinac h(Bassell arubra ) arabon oncecommo nphotosentiv eric evariet yextensivel ygrow ni n rainfedlowlan dareas ;predecesso rt oBE- 3 arat-lauwan advancedpaymen to fcasua llabou rtha tca nb erequeste dwit h priorityi nth ecours eo fth ecro pseaso n arkilado fixedren t(leasehold )lan dtenur econtrac t aslum inherentlygoo dsoil stha thav ebecom e 'acid'afte rcontinuou s useo fammoniu msulphat efertilizer s bacolod hillsummi ta tth ehighes tpar to fth etoposequenc e bagtik compactedsoi lconditio nwhe npuddle dsoil sstar tdryin gou t bakili steephil lslop elocate ddirectl ybelo wth ehil lsummi t balus whatyo ulos ei na ba dyear ,yo uexpec tt oge tbac ki na goo d year banglid gently slopingfoo tportio no fhill so rhighes tportio no flo w hillridge s bantod smallnarro wbunde dric efield swit ha substantia lvertica ldro p betweenfield s baras-baras sandyloa m bariri weakan delongate d ricetiller s bayanihan voluntaryhel po rcooperativ ewor kbe e BE-3 photosentiveric evariet yintroduce d inth e1960 san donc e extensively growni nrainfe dlowlan dareas .T oa larg eextent , itha sno wbee nreplace db yIR-varietie s bolos-bolos takingturns ,e.g .i nth ecultivatio no fundivide dlan d bolto volumemeasur eequa lt otw ocavan s buga-buga siltycla ysoil s bukay 'whitehead' ;empt ywhitis hpanicle so fric eplant scause db y stemborerattac kdurin gth eflowerin gstag eo fth eplan t bungak firstploughing ;breakin gope no fth esoi l buro-balangtang periodo fcontinuous ,bu tlo wintensit yrainfal l but'ong localdelicac ymad eo fcassav aflou ran dsuga r buylohan intensivelymanage dfield slocate dclos et oth ehomestea d caltex volumemeasur eequa lt oon elitr e camoros non-photosensitive,drough tresistan treddis hric evariet ygrow n onsideslop earea s capacidad sanglup a inherentfertilit yo fth esoi l carabao waterbuffal o cauan volumemeasur eequa lt othre epaniqa sor ,dependin go nth eric e variety,equa lt o42-4 6k go funmille dric e dagmay superiorkin do ftar o(Colocasi aspp. )know na sdashee n(Hodge , 1954)cultivate d onuplan dfield s dagyaui contractualarrangemen twher eequa lamount so flabou rand/o r carabaoservice sar eexchange d danaw lowestfield si nth etoposequenc e 294 i [ dar-os stunted growth and yellowing of leaves of rice seedlingscausfe d by sudden submergence ekonomia dividing limited resources for various enterprises fiesta annual village celebration in honour of the village saint San Isidro de Labrador ganta volumemeasur e equal to1/2 5 of a cavan gina tamasok 'dead heart1 of rice plantscause d by stemborerscuttin g off the growing parto f theplan t from the base gintapat extra high dosage of fertilizer '• gutok high stand density of rice crop hagpok crumbly soilconditio n t : herbolario traditional doctor or herbalist hilot local masseur or midwife hinis-hinis silty clay loam hitsura healthy appearance of rice crop;literall y face hunob seepage ! , husto lang it isnormal ;use d toindicate d normal yield level | : huyos small and not well-filled rice grains ! igo-igo lang it is enough; term used to indicated normal yield level ipil-ipil common tree speciesuse d for firewood production (Leucaena qlauca) jackpatan the jackpot; terms to indicate the best possible yield level jeepney small local truck used forth e transportation ofperson san d hauling freight kangkong common broadleaf weed species in well-watered lowland fields | i used aspi g fodder (Ipomoea aquatica) kayog finger-blade harvesting knife used for harvesting riceb y i | panicle kul-aw term commonly used for situations in which something appears i ; more than it iso r lesstha n expected kusim rice leaf folder (Cnaphalocrocis medinalis) lahos rice establishment technique involving one ploughing followed a furrowing and planting of seedlings in the furrow j lamgud soilmined ; inherently rich soils that lack fertility | lampano appearance of healthy rice crop;broa d and green leaves lay-on finesoi l deposits in fields coming from the erosion of higher positioned fields linamudan local dish consisting of amixtur e of rice and corn i loya-loya crude way of rice crop establishment involving only one ! furrowing before transplanting | lungasod see danaw lus-on stunted growth of rice on fields strongly deficient in internal] drainage I malakpatan by chance mamag-o rotation ofcrop s or varieties mara-mara mole crickets (Gryllotalpa africana) minongo rice crop establishment method involving the broadcasting of pregerminated seeds in standing water.Fiel d isdraine d after oneda y minus very bad; term used toindicate d very poor yield naga bilog -bilog early reproductive growth stage of rice (booting stage) 295 naga-puras stuntedgrowt ho fric eseedling san dyellowin go fleave scause d bya sudde npondin go fwate ri na dr yfiel d nagulpihan fertilizerboos t nakusgan stuntedgrowt ho fric eplant sa tth evegetativ estag edu et o suddenfloodin go fa fiel dnea rcrackin gstag e(bagti ksoil ) nipis lowstan ddensit yo fric ecro p nono-o veryfin ecla ysoil s pabay-an poorcrop stha tar eabandoned ,i.e. ,lef twithou tan yfurthe r care pakyaw contractlabou rgroup ,e.g .fo rharvestin gric eo rploughin ga field palagbung ricecro pestablishmen ttechniqu einvolvin gth ebroadcastin go f pregerminatedseed si nstandin gwate rfollowe db ydrainag eo f thefiel dte nday safte rseedin gunti lsuc hleve ltha tth etip s ofth eseedling sbecom evisibl e palay unmilledric egrain s pal-ay healthy appearanceo fric ecro ptw oweek safte rgerminatio n palay-ang ricecro pestablishmen ttechniqu einvolvin gth ebroadcastin go f ungerminatedseed si ndr ysoi lcondition sahea do fth erainfal l season palusot ricecro pestablishmen tmetho d similart ominongo ,bu twit h ungerminatedseed s panarot generalter mfo rdevastatin gpest s paniga volumemeaur eroughl yequa lt o1 4k go funmille dric e pangamote lucki sagains tyou ;yo ualway slos ewhateve ryo ud o panubli inheritance panuigo n fluctuating;variabl e paray-paray seedingi nfurrows ;als ograss ywee dspecie s(Echinochlo acrus - gain) pasapar freeparticipatio ni nric eharvestin g pasimpalad risk;adventur e pasuerte luck patag plainfield s patag hagdan-hagdan fieldstranscien tbetwee nsideslop ean dplai narea s patasma n gihapon twooption stha tgiv eth esam eresults ;ther ei sn owinne r patass agast o thereturn sjus tcove rth eexpense s pigauj verybad ;ter muse dt oindicat ever ypoo ryield s pilit glutinousric e porcentuan harvestingarrangemen tcommo ni nth eharvestin go fdagma y prenda mortgage produktuan localcas hloa no fwhic hth eprincipa lsu mi srepai di ncas han d theinteres ti nrice ;effectiv emonthl y interestrat eo f 2.3- 5.0 ? pug-a fine-texturedsoil s pugtak-pugtak typicalconcentri cdamag ecause db yhopper s(hoppe rburn ) quinta landtenur econtrac twit h40S6 0sharin go fth eproductio n betweenlandowne ran dtenant ,respectivel y rimata forfeiturei nmortgag e risidiran youwil ld osomethin galthoug hyo uhav eth efeelin gtha ti ti s toorisk y sab'a plantain 296 sabati(sabog- ) ricecro pestablishmen ttechniqu einvolvin gth ebroadcastin go f germinatedseed sunt opuddle dsoi l sabod-sabati riceseedlin gnurser yestablishe d inpuddle dsoi lcondition s sabod-samara riceseedlin gnurser yestablishe d indr ysoi lcondition s ; i sagahay localric eloa no fwhic hth eprincipa lsu man dinteres ti s repaidi nrice ;effectiv emonthl y interestrat eo f3. 3- 5.0 ?| sagod tenurearrangemen ttypicall yoccurrin gwit hanimals ,whereb yt^h e sagod-takeragree st ofee dth eanima lowne db yanothe rperso ni n returnfo ra 50:5 0sharin go fth eproceed safte rsal e saka-an localcas hloa no fwhic hbot hth eprincipa lsu man dinteres tar e repaidi ncase ;effectiv emonthl y interestrat eo f5 - 10J ( i salabay ricecasewor m(Nymphul adepunctalis ) salmon volumemeasur eequa lt oa regula rsalmo ntin ,roughl yequa lt o \ 1/50o fa paniq a SamahangNayo n pre-cooperativevillag eassociatio n introducedi n197 2 samara(sabog- ) ricecro pestablishmen ttechniqu einvolvin gth ebroadcastin go f: ungerminatedseed si nslightl ymois tsoi lcondition stha tallo|i / immediategerminatio n i sarama goodstan do fric ecrop ,eve nheigh tan dcolou r selda smalljoin tliabilit ygroup so ffarmer st ofacilitat e surpervisinginstitutiona lcredi t sibu localcas han dric eloan si nth espher eo fmutual-ai d forwhic h nointeres ti scharge d sitio smallneighbourhoo di nvillag e suki localarrangemen twhic hinvolve sa subscriptio nt oregula r ! purchaseso ncredi to fparticula rconsume rgood so fwhic hth e| fullamoun ti spai dafte ra certai nperio d ' : sul-og seebayaniha n suyod wooden,tooth-pike dharro wfo rlevellin gpuddle dric efield s tagustos army-worm (Wythimnaseparata ) tahus waterretentio ncapacit yo ffield s t tamasok ricestembore r(e.g. ,Scirpophag aincertula san dTryporyz a | innotata) I tamasokput i adultmoth so fth estembore r tamasokulo d stemborerlarva e tambok theimmediat eeffec to fure ao nth ecolou ro fth eric eplan t tanum transplantingo fric eseedling s tiangaw ricebu g (Leptocorisaoratorius ) tindog densityo fth eric ecro p tresa landtenur econtrac twit ha lan dren to fone-thir do fth egros ^ yieldminu sharvestin gcost s tuba mildalcoholi cbeverag eobtaine d fromth edripping so fyoun g flowerpod so fth ecoconu tpal m tundal bananassuitabl efo rdirec tconsumptio n waya-waya brownplan thopper s(Nilaparvat alugens )an dgree nlea fhoppe r (IMephotettixspp. ) I 297 LISTO FABBREVIATION S

BGF BarrioGuarante eFun d BSF BarrioSaving sFun d CYMMIT InternationalMaiz ean dWhea tImprovemen tCentr e DSR dryseede dric ecrop s FaCoMa FarmersCooperativ eMarketin gorganizatio n GLS generalized leastsquare sregressio n HYV highyieldin gric evariet y IRRI InternationalRic eResearc hInstitut e IR-varieties ricevarietie srelease db yIRR I M-99 governmentinitiate d riceproductio ncu mcredi tprogramm e introduced in197 3 TOTA D Minimumo fTota lAbsolut eDeviatio n NGA NationalGrai nAuthorit y OLS ordinaryleas tsquare sregressio n RCR randomcoefficien tregressio n TD triangulardistributio no foutcome s TPR transplanted ricecrop s USAID UnitedState sAgenc yfo rInternationa lDevelopmen t VC visualcounte rmetho dfo relicitin gsubjectiv ecumulativ e densityfunctio no foutcome s VPP-index VillagePala yPric eIndex .Thi sinde x (1979-80= 1D0 )- indicatingth eincreas ei nth epric eo fric e- i suse dt o deflatemonetar yvalue sfo rth eseason so f1978-7 9( = 95), 1980-81 (= 116), and 1981-82 (= 126). All monetary values presented inthi sstud yar edeflate dagains tthi sinde ximplyin g aconstan trea lvalu eo fth eemploye dmonetar yuni to f US$1= 6. 8 kgo funmille dric e WSR metseede dric ecrop s NOTES

Chapter 3 1) Because risky choice implieschoic e between probability distributions of consequences,menta l balancing of anumbe r ofpossibl e consequences ^ simultaneously isrequired . Bernoulli'sprinciple ,o r asi ti smor ecommonl y known,th eexpecte d utility theorem provides themean s for ranking risky prospects inorde r of preference,th emos t preferred being the onewit h the highestexpecte d utility. Itbring stogethe r ina n explicitwa y theperson' s degreeso fbelie f (subjective probabilities)an d hisdegree so f preferences (utility of consequences). Itpostulate s that autilit y function (U)exist sfo r a decision maker that associates asingl e real number (expected utility valu^) with any risky prospect.Vo nNeuman n andMorgenster n showed thatBernoulli' s'• principle isa logica l deduction from asmal l number of axiomstha tman y people agree arereasonable ,a tleas t toth eexten t that they would wish their own choicest oconfor m with them (Anderson et al,1977) : (1)Orderin g and transitivity.A perso n is assumed tohav e aconsisten t i preordering over actionsth eoutcome so f which areuncertai n (i.e.,ris k prospects). Aperso n either preferson eo ftw o risky prospects a1 and a2o r is indifferent between them. Thelogica l extension oforderin g ist o transitivity ofordering so fmor e than two prospects.Tha t is,i fa perso n prefers a1 toa 2 and prefersa 2 toa3 ,h e should logically prefer a1 toa3 ; (2)Continuity . Ifa perso n prefersa 1 toa 2t oa3 ,a subjectiv e probability P(a1)exist sothe r than zeroo ron e suchtha t hei sindifferen t between a2afr d a lottery yielding a1 with probability P(a1)an d a3wit hprobabilit y 1- P(ajl) . Thisimplie stha t if faced with arisk y prospect involving agoo d and bad I ] outcome,a person willtak e theris k if thechanc e of getting the bad outcome' islo w enough; i \ (3)Independence .I f a1 ispreferre d toa2 ,an da 3 isan yothe r risky } ; prospect,a lotter y with a1 and a3a sit soutcome swil lb epreferre d to a ! lottery witha 2an d a3a soutcome swhe nP(a1 )= P(a2).Preferenc e betweena1 j and a2i sindependen t ofa3 .

Chapter 4 1) Excessive cutting of firewood wasdu et oth e practice ofcontinuousl y smudgi|n(J mango trees with slow-burning smoking fires topreven t pest infestation.Thii s practice abruptly stopped after chemical insecticides became available. It is interesting tonot e that the introduction of insecticides sometimesma y havsa positive influence onth e ecology of anarea .O n theothe r hand,th edanger s(J f spraying alarg e treewit h aknapsac k sprayerb y inexperienced personsshould ' not beunderestimated . Onon eoccasio n itoccurre d that aperso n fell outo fa tree intoxicated and barely made it toth ehospital . 2) Theharvestin g ofdaoma y wasorganize d around 6-10 labour gangstha tharveste d daqmay for one day,cleane d and bundled itth e following two days,an d then! transported itb y carabao sledst oth enearb y town.Eac h gang had itsow n leader-cum-seller,wh okep tcontact swit hothe r groupsi n ordert o schedule harvesting operations and prevent anoversuppl y ofdagma y on themarket .The y; also dealt directly with oneo fth e threebi g contract buyersi nIloil oCity .A certain quantity waswholesale d toothe rbuyers . 3) Byerleee ta l (1980)defin e arecommendatio n domain asa grou p of roughly homogeneous farmerswit h similar circumstances forwho m weca nmak emor e or 299 less the same recommendation.Recommendatio ndomain sma y bedefine d interm so f bothnatura l factors (e.g.,rainfall )an deconomi c factors (e.g.,far m size).

Chapter 5 1) Thisgrou p of relatively large farmersi sno t represented inth e sample.I t is a group of local entrepreneurswh o areals oengage d inmoney/ric e lending,ric e and livestock trading.Further ,the y areth e ownerso f ricethresher san d rice mills and have thehighes t percentageo fowne d orpledge d land.Althoug hthe y were explicitly invited toparticipat ei nth edail y recording survey,fo r variousreason s (e.g.n o time)the y refrained from doing so.Th e underlying reason forthei r non-participation may havebee n the perceived risk of allowing anoutside r tomak e anin-dept h analysiso f their operations.However ,i nth e course ofth e study thisgrou p offarmer sprovide d valuable information on numeroussubjects . 2) Of thetota l cadastral survey area (247ha )o f the village,20 ?i sowne d by villagepeopl eo fwhic h roughly half ishill y land left uncultivated.O f the remaining area,75 ?i sowne d by residentsi nth enearb y town,primaril y small landownerswit honl y afe w owning landholdings aboveth e5 hectares .A smal l part of thelan d (8?)i sowne d by residentso f aneighbourin g village,wherea s 17?o f the area could notb etrace d toknow n landownerso fwhic h probably a large number islivin g outside themunicipality .Roughl y three-fourthso f the land titleshel d by villagers inth ecadastra l survey area are smaller than1 hectare,wit h an average areape r titleo f0.3 3 hectare.Moreover ,24 ?o f the area covered by thesetitle s (36?o f thetota l number oftitles )i sundivide d property,wherea so f theare a covered by titles above 1hectar e 63?i s undivided.Lan d often remainscadastrall y undivided asth e surveying oflan d by theBurea u ofSoil si sto oexpensiv e ($54).Title sremai n either inth enam eo f thedecease d parent,o r aretransferre d toon eo fth echildren . 3) Especially during the lastdecade ,purchas e priceso f land have sharply increased to levelso faroun d $2,000pe r hectare.Th eupwar d pressureo n land pricesi scause d by purchaseso f relatively rich town peoplelookin g for safe investmentsi nland ,preferabl y ina n areawher e relativesca n takecar eo fth e land rent payments.I n1979 ,a tow nresiden t working overseasoffere d $2,300 for ahectar e ofrainfe d land.Thi s isroughl y equal toth epric e paid for irrigated land ina nearb y area. 4) Thecomputatio n of annual incomederive d from cattleproductio n isdifficult . It stems from the facttha t annual inputsd ono t directly result inincom e as the activity output isrealize d over anumbe r of years.Hence ,th e computation of annual incomet ocattl e activitiesi slargel y arbitrary,especiall y inth e case it isno texactl y knownwhe n theanimal s are purchased orborn .I nTabl e 5.2.1 only apercentag e (20?)o fth eincom ederive d from actual salesi s included.Impute d income duet onatura lgrowt h and birth ofcattl ei saccounte d for inth easse tbalanc e ofth ehousehol d (Figure 6.3.2). 5) Unlikecro p production forwhic h detailed production accountswer ecollecte d including allcost san d returns (homeconsuraej&j^bd.sol dproducts )o f activities,fo rperennia lcrop sdat a collected did notinclud ehom e consumption ofproducts .Hence ,incom ederive d from perennialcrop si sonl y composed of sold products.Hom econsumptio n ofperennia l crop productsmainl y include bananas and firewood. 300 Chapter 6 1) Except for livestock production and indirectproductiv e activities,th e presented labour data arecollecte d through daily recording and includewalkin g distances.Sinc e livestock activitiesan dindirec t productive activities * usually involve amor eo r less fixed daily time expenditure,n odail y records werekep to n these activities aswit h thedirec tproductiv e activities such as crop production and wagelabour .Assessmen t ofth etota l time spento n indirect productive activitiesan d livestock production wasbase d on aspecia l study (Res, 1983). 2) This impliestha t inthi scas e theearlie r defined rough classification variable 'subsistencecoverag e factor1 (Section 5.3.1),base d onth e potential incometha t canb e expected from crop production,i sa goo d proxy forth eris k taking capacity of thehousehold .Tha tis ,th ecapacit y togenerat e surplus income from crop production activities (i.e.,incom e abovebasi c subsistence requirements)criticall y determinesth ehousehold' s income-earning capacity and overall asset position.I t should be realized,however ,tha t in situations where off-farm incomei simportan t and dependable,suc h sourceo f income should be accounted fori n thepotentia l income-earning capacity of the household inorde r toserv ea sa prox y for thehousehold' sris k taking capacity.

Chapter 7 \ ' 1) Inorde r toinvestigat e the farmers'assessmen t ofth e technical feasibility!ip f doublewe t seeded ricecroppin g for thevariou slan d units,a metho d was ' designed toelici t farmers'subjectiv e assessment of theonse t andterminatijoij ) of thepondin g of water inric efields .Th eprocedur econsiste d of twoseriejs 1 of questions,th efirs tconcernin g theonse t and the second concerning the termination of thepondin g ofwate r inlowlan d ricefields .Th efirs t series) i started with thequestio n before whatwee k farmersexpecte d toneve r have pondingwate r inthei r rice field,followe d by thequestio n after whatwee k j ; they expected toalway shav epondin g water.Fo r theperio d inbetwee n these!tw o weeks,startin gwith th ewee k following the 'never'statement ,farmer swer e [ asked to indicate foreac hwee k whether they expected tohav e ponding waterti n their fields interm so f the following probability heuristics: 'sometimes,op t usually not' (0.25); 'half ofth etime ' (0.5); and 'usually,bu t sometimes npt' (0.75). With theseprobabilit y heuristics (including 'never' (0.0)an d 'always' (1.0))i ti spossibl e toderiv e thecumulativ eprobabilit y distributionso f[th e onset of ponding water inric e field aspresente d inFigur e7.2.1 .Th e same', questioning procedurewa suse d toevaluat e the termination ofpondin g waterIr t ricefields . 2) It issurprisin g that inth eeconomi c literature concerning farmers'cro p ; activity choice almostn o attention ispai d to farmers'ow nplans .I nth e conventional economic analysiso ffar mmanagemen t (planning)decisions , attention iscommonl y focused onex-pos t assessments,i.e. ,wha t farmershav e; done,rathe r thanwha tthe y wereplannin g todo .I nsuc h analyses,th e efficiency with which farmersallocat e their resources toth e various activitiesi sevaluate d on thebasi so fa compariso n between theex-ant e far* plan derived from adeterministi c farm planning model (e.g.Linea r Programming) and theobserve d ex-post farm activity pattern of farmers.Clearly ,i n dynamic orstochasti c choice situations such comparison isinappropriate .Observe d cropping plans areth eresul t of actualproductio n circumstances asthe y 301

develop in the course of a production season and the reaction of farmers to such circumstances. At best, deterministic farm planning models may beuse d to evaluate farmers' ex-ante farm activity plans, i.e., plans that are formulated by farmers before the onset of the growing season. The farmers' initial plan best indicates the choice of farmers based on their beliefs regarding the likely feasibility and attractiveness of alternative production opportunities, perceived constraints, and preferences.

3) The lack of buyers occurred due to a local oversupply of rice on the mvr'/e' resulting from large rice sales of farmers from anearb y irrigated ar'.. Because of more favourable production circumstances, irrigated farmers harvested rice two weeks ahead of the first harvests in the rainfed village. The fact that rainfed farmers can seldom benefit from the high price period of rice and even find problems in marketing it, is a facet of the more general problem that rainfed rice farmers are at adisadvantag e compared to irrigated farmers. In the rice production sector not only poor farmers,bu t rainfed areas as a whole are at a clear disadvantage in capturing the 'economic rent' that is associated with the early use of profitable new rice technology when markets have not yet adjusted to such higher productivity/market supply situation.

Chapter 8

1) The above safety principles can be transformed into mean - standard deviation rules by assuming that outcomes are normally distributed or after resort to the Chebychev inequality. This inequality shows that for any random variable 'x', the probability isneve r more than 1/h that *x'assume s avalu e outside the closed interval from E(x) -h * s(x) toE(x ) + h * s(x).Fo r the Safety principle, using Chebychev's theorem, Roy (1952)foun d that

Pr(p d'j p) s2(p)/ (m(p)-d')

where p isprofit , and m(p) and s(p) areth e mean and standard deviation of profits respectively. Hence, if m(p) d' and m(p) D,hi s principle can be approximated by maximizing the ratio

k = ((m(p)-d') / s(p)

without assuming any more detailed information of the probability distribution of outcomes.

For normal distributions, the Safety Fixed rule is equivalent to maximizing a utility function of the form m(p) -k *s(p) . The Safety First restriction can be rewritten after either resort to the Chebychev inequality or based on the assumption that outcomes can be considered normally distributed, ass^(p )/ (m(p)-d')2 a'.

2) Because of the limited occurrence of second fertilizer applications as well as the small contribution of these applications to the total amount of fertilizer applied, the effect of the second fertilizer application is not separately accounted for,bu t added to the first application. Although this isno t likely to influence the shape of the response function, itma y cause some underestimation of the risk involved in applying very high dosages of fertilizer in the first gift.

3) Although for similar fields the possibility of weed infestation ishighe r for dry seeded rice crops compared to wet seeded crops, farmers consciously choose lesswee d infested fields for dry seeded crops. 302 4) Thecompariso nbetwee nth etiu odat aset si sno tentirel y validbecaus eo fth e differencei nric evariety .Th evariet yIR-3 6(farmers 'data )i ssuperio rt p IR20(experimenta ldata )wit hrespec tt odiseas ean dpes tresistanc ea swel la s droughttolerance .Further ,th einfluenc eo fris kfactor so nric eyiel d(thi s excludeswate rstres sbecaus eth erespons efunction srelat et oirrigate d conditions)ma yhav ebee nsomewha tdifferen tfo rth eperio ddurin gwhic hth e experimentswer eundertake n (1969-75)an dfarmers 'dat awer ecollecte d (1978-81).

5) Thefindin gtha tth eprobabilit y distributiono fyiel di spoorl y representedb y avarianc emeasur e- a commo nmeasur eo fris ki nman yeconomi cdecisio nmodel s- isi nlin ewit hth egenera lfindin gtha tth eprofi tdistributio no fcro p activitiesi softe nnonnormal .Th epresen tdat aconfir mDay' shypothesi s(19179 ) thatth eunderlyin gweathe rvariable sinfluencin gcro pyield sar enonnormall y distributed andtha tcro pyiel ddistribution ssimpl yreflec tthem . 303 APPENDIX I

ECONOMIC MODELS OF DECISION MAKING UNDER UNCERTAINTY

1. Expected income-dispersion analysis Expected utility maximization can becharacterize d by the following solution to an uncertain choice problem (Robison, 1982): . identify the actionchoice s available and thepossibl e stateso fnatur e under which actionchoic econsequence sma y be experienced; . assign probability weightst o the stateso f natureconsisten t with the probability calculus; . identify theconsequenc e of each actionchoic e under each stateo fnatur e and assign toeac h apreferenc e measure,a utilit y value; . calculate theexpecte d utility index foreac h action choice by multiplying the utility indiceswit h their respective probabilities; . implement theactio nchoic ewit h thehighes t index.

Within theexpecte d utility maximization framework, preferencemeasure so r utility valuesassigne d byris k averse individualst oth e variousoutcome so f achoic e option areconsidere d tob e areflectio n of their diminishing marginalutilit y of money.A perso n issai d tob e risk averse when holding anassure d amount,wil l refuse achanc et owi no rlos ea nequa lamount ,wit h fairodd s (Arrow, 1971). Stated otherwise,fo rth e risk averse individual theexpecte d utility E(U)o f the gamble0. 5U($ 0win )+ 0. 5 U($200win )i sles stha n theutilit y derived from U($100 assured). Suchrelatio n indicatestha t forris k averse individuals theutilit y function U(x)fo rmone y isnon-linea r against the value of 'x'.Hence ,ris k aversion isviewe d asa reflection ofth ediminishin g utility ofmoney :a guaranteed sumo f $100i spreferre d toa 50:5 0chanc eo f$20 0o r nothing because the satisfaction orutilit y tob e gained from anextr a $200i sles stha n twice to be gained from anextr a $100.Thus , itca nb eshow n thatth e necessary and sufficient condition for risk aversion istha tth e firstderivativ e ofth e individual'sutilit y function forincom e (orwealth) , i.e.hi smargina lutility ,i s positive and strictly decreasing (Arrow,1971) . Increasing marginal utility implies risk preference and aconstan tmargina lutilit y impliesris k indifference.Utilit y indices dono tprovid e absolute value judgements asoutcome s are valued relative to eachother .

Themai n difficulties inusin g themetho d ofmaximizin g expected utility relate to the empericalestimatio n ofutilit y functions (and subjective probabilities),an d to thecomputatio n ofexpecte d utilities with continuousprobabilit y distributions and abitrary utility functions.Fo r simplechoic eproblem s involving few options withdiscret e outcomes,assignin g utilitiest o allindividua l outcome possibilities may notpos e aparticula r problem.However ,fo rth emor ecommo n caseo fa substantial number of optionswit hcontinuou soutcom e distributions,suc h procedure becomestedious .

For such cases,i ti scommo n toasses sutilit y in termso fth e probability distribution of income itself and toassum e that such utility valuesca n beencode d 304 in a risk preference function. In such an approach, expected utility isexpressed ! as aweighe d sum of a series of moments of aprobabilit y distribution using Taylor series expansion (Anderson et al, 1977). Although, in principle, it ispossibl e to assess probability distributions with an infinite series of moments, in practical applications it hasbee n popular to take into account only the first twomoment *O f the distribution, i.e., themea n and variance or any other variance related measure.

As an early example of anon-agricultura l application of such analysis,Markowitj z (1959) assumed that an investor choosing a portfolio of stocks and bonds would choose amongst alternative portfolios on the basis of autilit y function defined in terms of the mean and standard deviation (or variance) of portfolio returns.A n increase inth e mean or expected value of returns isexpecte d to increase utility, whereas increases in standard deviation decrease utility. Given these assumptions, a rational investor should restrict hischoic e to portfolios whose standard deviations of returns areminimu m for given levels of expected returns.Usin g methods such as quadratic programming or Heady and Chandler's (1958) modified simplex technique, aschedul e ofminimu m variance portfolios (also called the risk efficient choice set or frontier)wit h associated profit levels can be determined. Employing the utility function of the individual investor (expressed in terms of income and income variance), autilit y maximizing portofolio can be selectedfrol n this schedule. All other risk programming models essentially follow the same procedure, i.e., the minimization of ameasur e of risk for a range of possible levels of expected profit, subject to the ordinary farm constraints and restrictions.

Presenting risk preferences in terms of the mean and variance of income,however ^ I puts serious restrictions oneithe r the distribution of outcomes or on the form<>f ! the preference function.Choic e according to the mean-variance approach is [ i consistent with the expected utility theorem and with the underlying assumptions': (axioms), only on the condition that either profits (or any other return measure) j are normally distributed or that the individual's utility function isassume d tojbja of quadratic form. \

If returns are normally distributed, the probability function (and thus the utility of a prospect) can be fully expressed by the first two moments of the distribution. This isa necessary condition for Freund's (1956)far m production model based onI the assumption of an exponential utility function of the form j -by i u = 1- e ' where (u)denote s utility, (y)denote s income, and (b)i s a risk aversion , parameter. Assuming that income isnormall y distributed, expected utility evaluates at E(u)= E(y )- 0.5 b V(y), which is linear in themea n and variance of income,j j

Amean-varianc e model can also be justified by assuming a so-called quadratic i utility function of income (as suggested bfflarkowitz),y regardles s of thewa y in j which income isdistributed . For quadratic utility functions, expected utility ofia prospect isevaluate d solely as a function of the mean and variance. That is, quadratic utility does not take into account higher moments of the probability distribution ofoutcomes .Becaus e mean-variance analysis based on quadratic programming routines istedious , a number of linear approximations to the mean- variance model have been suggested (Boussard, 1979).O f thesemodels ,POTA D \ programming (Hazell, 1971)i sth emos t popular as it yields risk efficient sets 305 remarkably similar toth emean-varianc e solutions (Anderson,1979) . This approach isbase d onminimizin g themea n absolute valueo fnegativ e deviationsfro m the mean, foran y given levelo fmea nreturn .

Apart from problemsassociate d withelicitin g risk preference functions (see Chapter 3.3),th eus eo fmean-varianc e analysisan d the implied risk preference functions have beenheavil y criticized fora numbe ro f otherreasons :

First,th e assumption thatprofi t distributionsar enormall y distributed isver y restrictive.Empirica l evidence suggests that field crop yieldsexhibi t frequency distributions that aremor eofte ntha n notnonnorma li ncharacte r and with pronounced variations inskewnes san d kurtosis.Da y (1965,1979 )hypothesize stha t theunderlyin g weather variablesinfluencin g crop yieldsar enonnormall y distributed and cropyiel d distributions simply reflect them (see also Section8.3) .

Second,quadrati c utility functionsar echaracterize d by increasing absoluteris k aversion,i.e. , they imply that individualsar eles swillin g toaccep t risk at increasing levelso f wealth.O nthi sgroun d they havebee nrejecte d byman y theorists (e.g.Pratt ,1964) . Theexponentia l utility function suggested by Freund providesa mor e realistic representation of risk attitudesa si t impliesconstan t absolute risk aversion.However ,becaus eo f the frequentoccurrenc e of nonnormal profit distributions thisfunctiona l form isgenerall y notapplicable .

Third,th econtinuous ,smoot hcharacte ro f the quadratic utility function implies that for allrange so f income individualsar ealway swillin g toaccep t some sacrifice inexpecte d return inorde r to reduce variance.A numbe r of studieshav e demonstrated, however,tha tutilit y functionswhic h areno tmonotonicall y increasing arequit ecommo n (e.g.O'Mara ,1971 ;Masson , 1974). For example,i t is quitecommo n to find S-shaped utility curves.Masso n arguestha t such results suggest asecurity-base d behaviour over critical incomeranges .

Fourth,a clea r drawback of variance asris kmeasur e isit simplie d symmetrical treatment of upper and lower deviations from themean .Th edecisio nmake r isno t assumed tob econcerne d with highermoment so f the outcomeprobabilit y distribution such asskewness .I ti showeve r quite likely that decisionmaker sar e particularly concerned with theoutcome sa t the lower tailo f theoutcom e distribution (downside risk). For particular casesconsideratio n fordownsid e risk may lead topreferenc e forhig h variance alternatives.I ti sfo r instance quiteeas y toconstruc t reasonable looking utility functionsan dprobabilit y distributions for tworisk y options,sa y F and G,fo rwhic hF ha s alarge r mean and asmalle r variance than G, and yethav eG bepreferre d toF .Th e idea ist omak eG highly skewed toth eright . To alleviate thisproblem ,Markowit z (1959)propose d to replacevarianc eb y target semi-variance.Semi-varianc e isth eexpectatio n of squared deviationsbelo w some fixed (disaster)level .Thi smeasur e allows for acommo n target returnwhe n evaluating risk across alternativesan d only considersdeviation sbelo w this target level.However ,du et oth ecomputationa l problemsinvolved ,thi smode l formulation isno tpopular .

Stochastic dominancy Theproblem sassociate d withelicitin g risk preferencesan d thegenera lnon - applicability ofmean-varianc e analysiso rrelate d approaches,ha s led to the developmento f an approach- stochastic dominancy -tha tca nb eapplie d to 306 situations in which little is known about the decision makers' preferences and < where entire profit distributions are evaluated instead of certain parameters pf such distributions as in mean-variance analysis.Thi s approach is also based on the expected utility maximization framework, but does not require complete specification of the utility function. The essence of the method lies in the comparison of entire cumulative frequency distributions (CFD)o f arrays of possible profit levels associated with choice alternatives.Th e procedure is to screen CFDs of profits according to anumbe r of rules that allow the subsequent elimination of alternatives that are dominated by others.Hence ,th e method involves a partial ordering of alternatives as opposed to the complete ordering inherent to maximizing models. In theory, it is possible that, after the application of the first rule, only one alternative remains.Th e first rule simply states that a decision maker prefersmaximu m profits which implies that theCF D of profits of a preferred alternative lieseverywher e to the right of the dominated alternative(s).Th e second rule compares CFDs that cross each other and allows apreferenc e ordering for risk averse decision makers with a utility function that is smoothly increasing and strictly concave.Th e preferred alternative liesmor e to the right in terms;o f the area under the CFD cumulated from the lower values of the profit scale.The ) \ assumption underlying the third rule is that as people become wealthier, they also become decreasingly risk averse.Ho w these rules are related to the expected utility maximization theory is described in detail by Anderson et al (1977).

2. Safety First approaches

The safety first approaches originate from descriptive decision theories and are based on the notion that in common usage risk iscloses t defined as the possibility of loss.Followin g Roy's (1952)origina l proposition, lossca n be conceived asa particular (range of)negativ e outcome(s)whic h decision makers try to avoid; 'It! is reasonable, and probable in practice,tha t an individual will seek to reduce as far aspossibl e the chance of such acatastroph e occurring' (Roy, 1952). Such ' outcomes can betake n as net losses from abusines s activity, erosion of assets,Ci r income falling below acriticall y low level.

The central tenet of the safety first approaches isth e overriding importance of| security motives on the part of decision makers.Da y et al (1971)surveye d thre$ security based rules-of-thumb: ! i i . The Safety principle (Roy, 1952)involve s the minimization of the probability that income or activity returns will fall below aspecifie d target level.Jf j (a)i sth e probability that disaster occurs, (p)i s stochastic profit, (x)lie avecto r of decision variables,an d (d')i s the target income,thi s rulec^n j be written as:minimiz e a=Pr(pd';x). M

. The Safety Fixed rule (Telser,1955 )involve s the maximization of theminifl|u| i return that can beobtaine d with a given probability or a probability bound. According to this rule,th e individual maximizes the income level (d)subjec t to the restriction that a'= P r (p d; x).I t is argued that this principle may beusefu l in situations where it seemsmor e natural toidentif y a fixe q confidence level (1-a')tha n to identify the critical minimum income level ' (d'). . The Safety First principle, advocated by Shackle (1949)an d applied by Katoaka (1963), assumes that the individual is satisfied to work within the context of some minimum perceived probability of disaster (a')an d maximizes the expected 307 profitleve lconsisten twit hthi sconstraint .Hence ,th edecisio nmake r maximizesprofi tsubjec tt oth erestrictio ntha t Pr (p d';x ) a'.

Bothth eSafet yan dSafety-Fixe dPrinciple signor eth eexpecte dvalu eo fth e alternativechoic eoptions .Particularl y theSafet yPrincipl ediscriminate s unreasonably betweenchoice so flo wrisk ,irrespectiv eo fthei rexpecte dvalue .A furtherdrawbac ko fth eSafet yFixe drul ei sth enon-existenc eo fa pre-determine d disasterlevel .I ncontras tt othes etw orules ,th eSafety-Firs trul ei sconcerne d withbot hth eprobabilit y ofdisaste ran dth eth eexpecte dvalu eo fth eobjectiv e function.Thi srul ei sclosel y relatedt oth eChanc eConstrain tProgrammin g approachdevelope d byCharne san dCoope r (1959)i nwhic hprofi ti smaximize d subjectt oa chanc econstrain to nloss .I nthi smode lris kaversio ntake sth efor m ofrejectin gan yalternativ ewit ha nunacceptabl y highchanc eo ffailure .Onc ethi s amounto fsecurit yi sensured ,th edecisio nmake ri sassume dt ob eris kneutra l regardinghi schoic eamon gremainin galternatives ,i.e .maximize sexpecte dprofit .

Asindicate db yRoumasse t (1976),i tma yno talway sb epossibl et osatisf yth e chanceconstraint ,implyin gtha tth ebes tchoic ecanno tb edetermined .H epropose s twoalternativ erule susin glexicographi corderin go falternative sbase do na combinationo fth eabov erules ,whic hh elabel sLexicographi cSafet yFirs t (LSF). Thefirs trul e(LSF1 )combine sth eSafet yFirs trul ewit hth eSafet yPrinciple .I t involvesa switc ht oth eSafet yPrincipl ei fnon eo fth ealternative ssatisf yth e chanceconstraint .Tha tis ,th edecisio nrul ei st ocom ea sclos et osatisfyin gth e chanceconstrain ta spossible .Th eothe rrul e(LSF2 )combine sth eSafet yFirs twit h theSafet yFixe dPrinciple .I fth eris kconstrain ti sfulfilled ,bot hrule spredic t thesam echoice ,i.e .expecte dprofi tmaximization .

Theabov esafet yprinciple sar eals oemploye dwithi nth eframewor ko fmea n- standarddeviatio nanalyses .B yassumin gtha toutcome so falternative sar enormall y distributedo rafte rresor tt oth eChebyche vinequalit y (seeNot e1 ,Chapte r 8), allthes erule sca nb etransforme d intomean-standar d deviationrule san di nthi s formthe yclosel yresembl emean-varianc eanalyse s(Pyl ean dTurnovsky ,1970) . However,apar tfro mth eearlie rmentione dproble mrelate dt oth eassumptio no f normaloutcom edistributions ,i tappear stha tb yemployin gsuc hmean-standar d deviationapproximation so fsafet yprinciples ,th ewhol emeanin gunderlyin gthes e principleschanges .Th eimportanc eo fshort-ter msecurit yobjective si stransforme d intoa long-ru nconcer nwit htrading-of fexpecte dprofit sagains tris ki nterm so f thestandar ddeviatio no fprofits .

3. Gametheoreti capproache s

Decisioncriteri aemploye di ngam etheoreti capproache sar eoutline di nman y economictextbook s(e.g .Baumol ,1972) .Amon gother sthe yinclude :

. TheMai dcriterion ,als oknow na smaximin :Her eth ebes tselectio nbetwee n alternativecourse so factio ni sth emaximum-minimu mpay-off ,i.e. ,tha t courseo factio nwhic hyield sth ebes tresul ti fth e 'opponent'(b ei ta huma n beingo rnatura lcircumstances )doe shi sworst .Thi srul erepresent sth emos t extremecas eo fris kaversion .I ti sa specia lcas eo fth eSafet yFixe drul e wherea 'i szero .Als oaccordin gt othi srule ,prospect sar eordere dsolel yo n thebasi so fth eminimu mvalu eo feac hdistribution .

. Hurwicz'spessimism-optimis m criterion:Th ebes tan dwors tpay-off sfo reac h alternativecours eo factio nar ecompounde dwit ha 'pessimismindex '(x) , 308 ranging from D to1 ,an d (1-x). Theexpecte d pay-off iscalculate d for each alternative and thealternativ e with themaximu m ischosen .Th eWald' smaxlmi n criterion isa nextrem e caseo fthi s rule. . TheLaplac eprincipl e of insufficient reason;Sinc e inchoice s involving uncertainty the probabilitieso f specific outcomesar eunknown, Laplac e argues that they can be regarded asequall y likely.Th ealternativ e giving the highestaverag e return ischosen . . The Savage minimum regret criterion:Fo r any one strategy ofhi sopponen t *r of 'Nature' there isa bes t outcome forth e decision maker.I fa cours eo f actioni schose n which doesno tachiev e this,the n some regret ofno t choosing that alternative may beexperienced .Savag e suggeststha t the decision maker may choose thatcours e whichminimize s thisregret .

There aren otheoretica l groundsfo rpreferrin g onecriterio n toanother .Wclnernd y (1967)wa sth efirs t to apply themaximi ncriterio n toa farm planning model,aih d Maruyama (1972)generalize d themaximi n modelt oincorporat e variability notonl y into the activity returns,bu t also inth e input-outputcoefficient s andconstrain t levels. 309 APPENDIX II

II.1 TheGree n Revolution at the village level:flasagana-9 9 On anation-wid e scale, the Masagana-99 (1*1-99)ric e production programme was launched infla y1973 .It s main objective was to recover from severe shortfalls in rice production inpreviou s years, reduce importation of rice, and achieve self- sufficiency in rice.T o thisend , a16-ste p package of rice production technology mas put together and disseminated to farmers through production technicians, radio, and leaflets.Th e package included the use of IR-varietiesan d recommendations on the timely and correct application of crop inputs and farming practices.Lo w cost, non-collateral production loansunde r the supervision of the production technician mere extended to farmers provided they organized themselves into groups of 4 to 5 farmers.Thes e so-called 'seldas' (Appendix II.2)wer e supposed to act as joint liability groups for loan repayment. The maximum loan per hectare started with$10 4 in 1973, mas raised to $127 in 1974, and stabilized at $160 in 1975 and subsequent years.Roughl y half of the loan was given inkin d (fertilizer and pesticides) through acoupo n system, whereas the other half was given incas h to cover labour- hiring expenses.T o encourage farmers to join the programme a palay-price support system wasestablishe d and implemented by theNationa l Grain Authority (NGA).

The M-99programm e was rushed into the village around the end of August 1973 through asecon d meeting of the newly established local farmers1 association Samahanq Nayon (Appendix II.2). Since the programme was launched in themiddl e of thegrowin g season, the few members of this association had to decide on the spot whether toparticipate . One selda was formed composed of eight relatively large farmers grouped around (and related to) the two wealthiest farmers of the village: the rice mill owner and aloca l moneylender. Although allmember s repaid their loan at the end of thecro p season, for most of the members of this group it was the only time they participated. Being ina positio n to acquire loansfro m other sources (e.g. a '\2%ban k loan with land ascollateral ) or to generate their own cash, they apparently found the1*1-9 9procedure s too burdensome to obtain a second loan.

In itssecon d year ofoperatio n (1974), the number ofparticipant s increased sharply. Partly attracted by the low cost credit (1973 wasa bad crop year), but mainly because for most farmers it was the only way to obtain fertilizer (the large- scale implementation of the l*l-99programm e caused a fertilizer scarcity situation and drying up of commercial channels), 30 farmers (35% of the total number of farm households) applied for a1*1-9 9loan .Som e of these farmers were persuaded to apply for aloa n by the local technician who benefited from increased lending through a bonus system.

At the start of 1975, it became apparent that most farmers did not have the cash to repay their loans,partl y because of adrough t period during the main crop period, but mainly because the surplus production capacity of most households was totally insufficient tocove r loan repayment. Most of the loans were re-financed for the next year, i.e., farmers were given ane w loan the cash component of which was used to repay the balance of the previous loan still remaining. In this way, the cash portion of the 1975 loan could finance around two-thirds of the 1974 loan leaving a balance of $40 tob e paid by the farmer.Unde r the pressure of both the technician and their fellow selda members,mos t farmersmad e useo f this scheme and, consequently, participation rates remained at almost the same level. 310 Evidently, in 1976 repayment problems similar to the previous year occurred. However, incontras t with thepreviou s year,re-financin g of loanswa sno t possible and heavy penalties were imposed on defaulting. Farmers were threatened withjaiJ L and a feuperson s - including a barrio captain- wer e actually imprisoned. They mere not released before they had repaid a substantial portion of the loan which forced some of them to sell their working animal (carabao).S o other farmers, afraid to bepu t into custody aswell , sold their carabaos, took the boat to Manila to borrow money from their children, orborrowe d money from local moneylenders. However, even under this pressure, it was impossible to reach full repayment of the loans and the authorities changed to apolic y of restructuring loans.Fro m that year onwards it became possible to repay the loan gradually, in instalments with practically no lower limit with respect to the annual amount tob e repaid.

In 1976,non e of the 1974-75 seldas were able to enter the programme. In 1977,titi o small seldas were able to repay their 1975 loans and acquired ane w loan. All farmers participating in these two groups can be considered relatively large with farm areaso f over 2hectare s and fields located on the better land units,som e , portions of which are partially irrigated. It was essentially this last group of survivors (B%o f the total number of farmers)wh o could have (or did)benefit(ed ) from theM-9 9 lending were it not for the fact that it took them again two years to repay and by that time (1979)ther e wasn o technician present inth e village to mediate in their loan application.

From the above it isclea r that, for this particular village with rainfed rice agriculture,1*1-9 9a s an institutional credit programme was not very successful. Most participants (83J{)receive d only one loan which was re-financed and subsequently restructured. One of the major reasons for the poor performance is; that the yield levels aimed at in M-99 - 99 sacks of unmilled rice (palay)pe r hectare which is roughly equivalent to4. 2 tons/ha -ar e difficult to attainundef c rainfed conditions. Although under favourable weather conditions it is certainly possible toobtai n such production per hectare, yieldso f IR-varieties under rainfed conditions (particularly those released during theFI-9 9period )are ,o n average, closer to 2.8 tonspe r hectare ($400/ha).Obviously , such lower expected; yield level jeopardizes the very basis of non-collateral lending. Given such lowef yield level and resulting lower benefit/cost ratio, small farm-households depending! upon 1 to1. 5h a of rainfed lowland rice for their subsistence needs simply cannot improve their surplus income earning capacity to such an extent that they are abl£ ; to repay $160,no t even ina bette r than average year (Chapter 6). Stated I j differently, subtracting harvesters' share and land rent payments from the gross' . yield (roughly 40%) and given the fixed subsistence requirements inrice , these households cannot absorb more than $40 to$4 5 in farm investments yearly. This is: barely above the necessary expenditures for fertilizer/chemical inputs for a1 hectare rice crop.Moreover , assuming that the M-99 years were not allo f the type of 'better than average', it is not surprising to find that most farmers repaid [ their loans with the proceeds from upland crop sales.Thi s even rendered the rice; price support system formos t farmers totally ineffective.

Asurve y undertaken in 1979 reveals that only 13Jto f the farmers would again participate inM-9 9 or a similar credit programme, but none of them would borrow more than the amount required for fertilizer and pesticides.Tabl e II.1 provides a picture of village participation over the period 1973-1979 set against the pattern of the Philippine National Bank (PNB)release s for Iloilo Province. These figures tend to indicate that a similar pattern hasoccurre d inothe r villages. 311

Table II.1 Plasagana -99 participation

Villageparticipatio n IloiloProvinc e1 ) No. of No.o f PNE loanrelease s Repayment Year seldas farmers (Pesos'000 ) (*) 1973 1 8 6,117 98 1974 5 30 13,061 84 1975 4 26 13,125 70 1976 1 5 745 95 1977 2 7 2,270 86 1978 - - 2,162 77 1979 - - 1,320 11 1) Source:PN Bloa n releasesan drepaymen t bulletin (1980)

Iti smor e difficultt odetermin e the general impacto fth e programmeo n agricultural developmento fth e village since farm techniques mere already changing beforeM-9 9entere d the area.Farmer swer eexperimentin g with the new IR-varieties (IR5i n1968 , IR20i n1970) , higher fertilizer levelso nbot hol dan d new varieties,a swel la shighe r pesticide application levels.Moreover ,th e land reform (1973)ma yhav egive n some farmersmor e room for experimenting with new crop production technologya slan d rent payments were substantially reduced.

However, accordingt ofarmer s the programme recommendationsdi d not fit their rainfed rice production conditions.Althoug hi tma yhav e given farmersa sens eo f properly timing themai n crop operationsan d may have helped themi nth e (complex) useo fpesticides ,i tcertainl ydi d not substantially contributet oth e adaptation of thene wshort-maturin g varietiest orainfe d farm systems.Th e proper timingo f crop operations wascertainl y appreciatedb yfarmer san dinterview s revealed that they easily memorize the timingo fmos t major operations.However ,a tth e same time they argue that they often cannot follow theoptimu m time schedule becauseo fth e uncertain natureo fwate r availability inthei r rice fields.Moreover , the resulting yield variability leads themt oadop ta decisio n procedure whichi s essentially lessmechanica li ncharacte r than that followedb ythei r irrigated counterpartsan ddescribe di nth e PI-99brochure s (Fora nanalysi so fth e impacto f irrigationo nfarmers 'decisio n making see Jager (1980)).Fo r instance, their experience has learned themt ob ecarefu lno tt oinves t toomuc h cashi na cro pto o early. They deliberately postpone certain input investments until they think that the crop hasa reasonabl e chanceo frepayin g the investment. Hence,i ti sno t surprising that farmersneithe r used the cash budgeted forhirin g labourt oploug h the field,no r adopted the recommended straight-row planting methodo fcro p establishment orth e recommended basal applicationo ffertilizer .

Land preparation isusuall y carriedou ta smuc ha spossibl eb yth e farmer himself or with the helpo f(unpaid )exchang e labour.Straight-ro w planting would increase crop establishment cost with 50%withou t yieldingan yreliabl e increasei nne t production. The fact thata straight-ro w planted fieldi seasie rt owee d becausei t facilitates the useo fa rotary-weeder , apparently did not appealt ofarmers .The y reason thati ti simpossibl et ous e such devicei na dr yo rslightl y moist field and eveni fth e field gets flooded oncei na whil eth erotar y weederi sonl y effective against sedgesan dbroadlea f weeds which are relatively easyt ocontro l with herbicides. Insteado fadoptin g the more expensive straight-row planting, farmers started tous e- i nspit eo fal l recommendations and extension effortsi n 312 the area - the direct seeding method of rice crop establishment inpuddle d fields and later in dry fields.Thi spractic e proved tob e soviabl e that most farmers completely abandoned transplanting IR-varieties.I n fact, combined with the introduction of IR-varieties, it can beconsidere d the biggest breakthrough in rica farming in the area which actually stimulated the use of IR-varieties.

II.2 Government imposed farmers' associations; theSamahan q Nayon and selda

Following the proclamation of martial law and the subsequent declaration ofLan d Reform in 1972, the Department of Local Government and Cooperative Development \ hurriedly started toorganiz e village associations or Samahanq Nayon. Thesepre- i cooperative organizations were supposed to replace the old, municipality-based, »nd defunct Farmer Cooperative Marketing Organization (FaCoMa).Th e ideawa s to shif^' the cooperative effort in twodirections , in a first phase downwards toth e villige level and in a later stage - after these organizations proved viable -upward s to the district level.

The broad objective of this association was stated as 'toimprov e the quality of life for village people both socially and economically by encouraging them towof k together in an atmosphere of joint cooperation'. More specifically, it wasmean t to ensure amortization payments by farmers for land received under the land reform programme and elicit savings to finance theoperatio n of this programme. Further, these associations were supposed to serve asa channel for essential services provided to farmers. Inadditio n to an entrance fee of 10 pesos kept in a general fund and used for the association's operational expenses,member s were expected to contribute one sack ofpala y per hectare per crop per year (with an approximate value of $6 per hectare per crop)t o aBarri o Guarantee Fund (BGF), and to foregq 5%o f the value of each loan received from an institutional source, tob e credited to apersona l account within aBarri o SavingsFun d (BSF).Member s not borrowing ; from institutional sources were expected tocontribut e about $8 to the BSF ; annually. The guarantee fund was meant - among others - to support members' land amortization commitments, whereas the savings fund was intended to acquire shares! in existing or new rural banks. i

The organization wasintroduce d in thevillag e inMa y 1973.B y the end of thatyefc t it counted 41 members (about half of the number of farm households)wh o all paid their membership and annual fee.Th e main reason for joining the organization was the idea that it would facilitate access to fertilizer and other farm inputstha t had become scarce after the nation-wide introduction of M-99 in 1972. After thefflf- 99 programme was introduced in August that year and one group of farmers had acquired loans from this programme, most farmers started to pay their membershipi fee with the aim of becoming eligible for the M-99 scheme next year.Further ,quite i a few farmers were interested in the life insurance facility offered through the organization. None of the officials,however ,mentione d the organization's speciflq function in the land reform programme and when asked, merely stated that this programme waso f no use to the village.Still ,a few landlords prevented their I tenants from joining the organization. ,

Given the strong link-up between the Samahanq Nayon and the M-99programm e as viewed by farmers and taking into account the development of this programme, it i$ not surprising that theenthusias m for theS N rapid declined in the following thr^e years.Payment s to the guarantee fund decreased from an initial 41 sacks of palay, in 1973, to2 9 sacks in 1974,2 0i n 1975,1 0i n 1976,t o none in 1977 and the ' 313 following years.Stil l in 1975,o n the suggestion of a government official, the organization wasofficiall y registered.Moreover , the same official urged the local board members to subscribe to 10shares of $13.5 to help capitalizing a cooperative marketing organization. After 1976 the organization became effectively a dormant society. The then acting president resigned from office induced by the aggressive repayment drive of thePI-9 9programm e launched that year. Since none of the farmers were prepared to take over his position, the very official who was instrumental in establishing the association took over the presidency.

Obviously, the main cause for the poor performance of this association followed directly from the fact that with an ineffective land transfer programme - as in this village - the main function of this association disappeared. However, even under afailin g land reform programme, theSamahan g Nayon could still have performed itsothe r functions.B y substituting for services rendered by landlords (e.g.credit ) it could have facilitated amor e vigorous and widespread change in tenure conditions.Th e major weakness of the programme wastha t it never entered the stage where it could have developed itsow n support services aspromise d to farmers during the start of theprogramme . Although for the larger tenants,PI-9 9 may have, to some extent, bridged the credit gap that arose after tenants started to oppose existing land rent levels and sharing arrangements, it certainly did not help the smaller tenants.Fo r short-term farm input credit and emergency assistance in case of crop failures or major diseases in the family, they remained dependent on landlords and local moneylenders.Amon g others, these strong landlord-tenant relationships partly explain the still widespread occurrence of (illegal) share tenancy, covering about 30%o f the total cultivated area.

Further, the association could have provided acommo n meeting ground where local participation and interest could have been generated and local action could have started to solve problems encountered in farming and in the village in general. However, given the limited number of meetings as well as the vague notion members had of the purpose of the organization, attempts at cooperative education and mobilization should be considered rather unsuccessful. In fact, it seems that none of the members ever perceived the Samahang Nayon as their cooperative.Th emember s - including the local officials -ha d no idea what to do with the organization. Essentially, the only person considered tounderstan d the organization's rules and purposes was the government official himself.A s aresul t the members of the organization merely followed hisdirective s which finally caused the embezzlement of the association's funds.

The selda system Nationally, seldaswer e officially introduced in 1970 and were established throughout the country at the beginning of 1972.Apar t from providing an easy control over loan repayment, the seldas had to serve as the basic production unit at the farm level; as achanne l for facilitating distribution of farm inputs; as collection and assembly points for agricultural marketing; as rural nuclei for concentrated technical training and extension assistance; and as sub-units for social development within the village structure.

For this village, however, the selda system was introduced as a side effect of the M-99 programme. The idea behind the formation of seldas was to form small-scale joint liability groups facilitating the supervision of production credit. Members were required to sign a promissory note stating joint liability for all production loansan d a joint marketing agreement, and members had to comply with abudge t 314 prepared by technicians and agree to follow the supervision of agrou p leader.I t mas expected that the Filipino spirit of 'bayanihan' (farmers voluntarily helping each other)wa s to become the cornerstone of an internal policing system of repayment of credit. It was felt that with small groups of farmers,th e social pressure exerted by thebayaniha n spirit would ensure improved credit delivery and repayment systems.

For farmers in this village it remained largely unclear how this joint liability system should have worked. According to one farmer they should have jointly worked the land of a defaulting member in order to repay his loan with the proceeds, whereas others argue that they had to repay his loan with their own money or force the farmer to repay hisow n loan. Inbot h cases,a defaulting farmer wouldchangf e hisdeb t position with theban k to amuc h heavier debt position within the village. Most farmers viewed theseld a as anecessar y evil accompanying the1*1-9 9programm e (see also Castillo, 1982).

The main reason why the selda system never worked may be found ina basic misunderstanding of its very guiding principle: the bayanihan spirit. Bayanihan, locally known as sul-og,belong s to agrou p of 'quasi-contractual reciprocity' arrangements which involve more or less balanced exchanges where the terms of repayment are not explicitly stated before the contract ismade .Rathe r the terms are implicit in situations which culture recognizes and defines ascallin g for ' these terms.Reciprocit y comes into play automatically without any specific prior arrangement, and repayment ismad e in amechanical , almost non-affective manner (Hollnsteiner, 1972). ! .

Sul-oq arrangements typically occur when activities require alarg e amount of labour sucha s the relocation or repair ofhouses ,fencin g a field, etc.,an dthii s takes the form of acooperativ e labour project which commonly takesplac e inthe i off-farm season.Sul-o g activities have the character of asocia l event.Peopl et join voluntarily, food and drinks are provided by the organizing party.Stric t f»rm activities are explicitly not included.Fo r such activities, labour iseithe r hiied on a daily wage basis or exchanged (dagyaw).Th e latter also involves a reciprocity arrangement but hasa contractual nature:tw o or more people agree to behave towards one and another in aspecifie d way for a specified time in the future.Fpr ! instance, dagyaw activities occur in land preparation where farmers agree to taka turns in ploughing one another's fields.Participatio n in these activities isno t : generated by afeelin g of being responsible for each other.I t isno t amutual-hil p mechanism which can be relied upon in the case of rice or other shortages.I n fact, in order to reduce such commitments, it wastypica l that seldas were seldom ! ! composed of close relatives.

The non-functioning of the joint liability groups also became evident to thel*l-9 9 organization. In a first effort it allowed existing seldas to regroup and finally decided tocompletel y abandon thiscomponen t of lending requirements. 315 APPENDIXII I

Computation ofth eincom et ofamil y factors derived from crop production Table II1.1 Structureo fcro p production; annual averagespe rhousehol d category forth eperio d 1979-81 ($)

Non-surplus Surplus Average young middle young middle old

Grossproductio n 869 400 511 991 1404 1037

Paymentt oexterna linput s1 ) 343 163 150 423 541 432

Hiredlabo r 110 48 27 140 169 164 Cash 35 17 2 57 58 40 Kind 75 31 25 83 111 124

Rent 144 77 80 166 222 173

Purchasedcurren tinput s 64 29 28 87 105 71 Fertilizer 56 25 25 75 94 61 Chemicals 6 4 3 12 11 10

Capitalrenta l 25 9 15 30 45 24

Seedus e 60 28 36 74 93 72

Imputed incomefamil yfactor s 466 209 325 494 770 533 Labour 165 106 136 178 246 161 Profit (residual)2 ) 301 103 190 316 525 372

1), 2) Seefootnote sTabl eII ] ".3

TableIII. 2 Structureo fric e cropproduction ; annualaverage spe rhousehol d categoryfo rth eperio d1979- 8 ($) Non-surplus Surplus Average young middle young middle old

Grossproductio n 632 278 364 628 1100 790

Paymentt oexterna linput s1 ) 278 128 119 319 472 351

Miredlabo r 95 40 25 120 163 129 Cash 31 14 1 48 58 35 Kind 64 26 24 72 105 94

Landren t 102 56 55 99 169 132

Purchasedcurren tinput s 56 23 24 70 95 66 Fertilizer 50 21 22 61 86 58 Chemicals 6 2 2 9 9 8

Capitalrenta l 25 9 15 30 45 24

Seedus e 36 16 21 35 62 47

Imputedincom efamil yfactor s 318 134 224 274 566 392 Labour 89 62 82 60 142 100 Profit (residual)2 ) 229 72 142 214 424 292

1), 2) Seefootnote s Table III.3 316

Table III.3 Structure of non-rice crop production; annual averagespe r household category foi the period 1979-81 ($) Non-surplus Surplus Average young middle young middle old Gross production 237 122 147 363 304 247 Payment to external inputs D 65 35 31 104 69 81 Hired labour 15 8 2 20 6 35 Cash 14 3 1 9 5 Kind 1 5 1 11 6 30 Land rent 42 21 25 67 53 41 Purchased current inputs 8 6 4 17 10 5 Fertilizer 6 4 3 14 8 3 Chemicals 2 2 1 3 2 2 Capital rental Seed use 24 12 15 39 31 25 Imputed income family factors 148 75 101 220 204 141 Labour 76 44 54 118 105 61 Profit (residual) 2) 72 31 47 102 99 80 1) Interest payments are not included in thecos t of production. 2) For the feu cases that households own land, returns toow n land are included in the residual profit. 317 APPENDIX IV bleeds in rice fields identified by farmers

Scientificnam e Localnam e Occurrence 1)

Grassyweed s Brachiaramutic a gasa Cynodondactylo n buko-buko * Dactylocteniumaegyptiu m blantiki * Echinochloacolon a ginga ** Echinochloacrus-gall i paray-paray * Echinochloaglabrescen s lalakiparay-para y Ischaemumrugosu m limba-limba ** Paspalumconjugatu m blantiki * Paspalumpaspalode s loya-loya Paspalumscrobiculatu m gasa

Sedqes Cyperusdifformi s lisu-lisu ** Cyperusiri a payong-payong * Cyperusrotundu s lalakipayong-payon g ** Fimbristylislittorali s bungot-bungot **

Broadleafmeed s Alternantherasessili s lupo Ecliptaprostrat a tinta-tinta * Commelinabenghalensi s sabilao ** Ipomoeaaquatic a kangkong ** Phyllanthusnirur i SanPedr o * Marsileaminut a apat-apat * Ludwigiaadscenden s kurokudkudan * Ludwigiaoctovalvi s kahoy-kahoy Monochoriavaginali s yahong-yahong Spenocleazeylanic a kahoy-kahoy *

1) Frequency of occurrence: common (*) and very common (**) APPENDIXV

Insectpest sI nric ecrop sidentifie db yfarmer s

Intota leigh tinsec tpes tspecie saffectin gric ecro pproductio nwer eidentifie d byth emajorit yo ffarmers .

Minorinsec tpest s

Molecricke t (mara-mara)i sparticularl y aproble m indr yseede dric ewher esoi l conditionsar efavourabl et othei rdevelopment .The yfee do nth eroot so fth eyoun g riceplant scausin gstunte dgrowt ho rdeat ho fseedlings .Non eo fth efarmer sfoun d itdifficul tt oidentif ythi spest .Floodin gth efiel deffectivel y controlsth e pest,bu tma yno tb epossibl eunde rrainfe dconditions .Occasiona lhandpickin gO f insectsoccurs .Onc eth eare ai sflooded ,affecte darea sar eusuall y replantedWit h seedlingsfro mdens eportion so fth efield .

Leaf folders(kusim )als ooccu ri nth eearl ystage so fcro pgrowt han dth e infestationusuall y subsideswhe nth eplan tgrow solder .However ,th epes tma y sometimesattac ka tth emor esensitiv elate rstage so fcro pgrowth .Farmer s describeth epes ta s'worm shidin gan deatin go nth eleaves' .Larva efaste nth e edgeso fa lea ftogethe ran dliv einsid eth efolde dlea fwhil eeatin gth elea f tissue.Infestatio nusuall yoccur sunde rcondition so fcontinuou srainfal lan d especially onfield swhic har eshade db ytrees .Th eafflicte dportion so fth e leavesdr yup ,givin ga seriou sinfeste dfiel d ascorche dappearance .Thi spes ti s considered easyt ocontro lb yfarmer swit han ytyp eo fpesticide .On efarme r mentionedeffectiv econtro lo fth epes twit hth eus eo fa loca lbran do fsoap .

Ricecasewor m(salabay )i sals oconsidere da mino rpest ,althoug hi toccur squit e frequently.I tdevelop sunde rhumi d (coolan dcloudy )condition swhe nther ei sa n abundantwate rsuppl yi nth efield .Th edefoliatin geffec to fthi spes ti seas yt o identifyi nth efield .Insect smainl y feedo nyoun gplant san dattac kearl y inth e season.Mos tfarmer smentio ncuttin gof fo fleave san dstem scausin gstunte dgrowt h anddeat ho fyoun gplants .Drainag eo ffield si sconsidere d aneffectiv econtrol !• practiceb yfarmers .I tprevent slarva efro mfloatin go nwate rfro mon eplan to r fieldt oanother .An ykin do fpesticid ei sfoun dt ob eeffectiv ei npreventin ga pestbuild-up .Replantin go fvacan tspace sma yfollo winfestation .

Army-worm (taqustos)i sconsidere d amajo rthrea tt oric eproduction ,bu tonl y olderfarmer sca nremembe rseriou soutbreak so fthi spest .

Majorinsec tpest s Stemborers(tamasok )ma yseverel yreduc eyield sespeciall y wheninfestatio noccur s duringth elatte rpar to fth egrowt hcycle .Stemborer sbor ean dfee dinsid eth e ricestem .Whil efeeding ,th ebore rcut sof fth egrowin gpar to fth eplan tfro mth e base.Thi sconditio nresult si nwha ti scommonl yknow na s'dea dheart '(gin a tamasok).A bore rattac kdurin gth eflowerin gstag ecause sempt ywhitis hpanicle s thatar ecalle d 'whiteheads '(bukay) .Plant sattacke ddurin gth eearl yvegetativ e stageca nrecove rfro ma mil dattac ksinc ethe yca ngro wne wtiller st oreplac e thosedestroyed .Farmer sar egenerall ywel lawar eo fth edevelopmen tcycl eo f stemborers.Th eadul tmoth s(tamaso kputi )wer eidentifie da s'thos einsect stha t 319 layeggs ,tha twil llate rbecom eth eworm s(tamaso kulod) ,tha tmak ehole san dea t theinne rprotio no fth eplant 1.Accordin gt omos tfarmers ,n oseriou sdamag ei s inflictedb yth eadul tmoth ,bu tfarmer scontro lthe mt opreven ta build-u po f larvae.Commo ncontro lconsist so ffolia rsprayin gwit hbroad-spectru mpesticide s sucha sendri nan dassodrin ,usuall yupo nvisua loccurrenc eo fa sufficien tnumbe r ofadul tmoth si nth ecro po ractua ldamag ecause db ystembore rlarvae .Th eoptima l conditionfo ra pes tbuild-u pwa sconsidere da lon grain yperio dafte ra drought , partlybecaus erai nprevent sfarmer sfro msprayin gagains tth eadul tmoths .Mos t farmersmentio ntha ti ti sdifficul tt ocontro lth epes tonc eth elarva ear einsid e thestem .

Brownplan thopper san dgree nlea fhopper s(waya-waya )ma ycaus eseriou sdamag et o plantswhe na larg enumbe ro fthes einsect scongegrat eo na crop .However ,onl ya feulocalize d infestationswer ereporte ddurin gth esurve yperiod .Th etypica l concentricappearanc edamag ecause db yhopper s(hoppe rburn )i slocall yknow na s 'pugtak-pugtak' .Farmer sindicat etha talthoug hther ei ssufficien twate r availablei nth efield ,plant ssee mt odr yup .The yattribut ehoppe rbur nt oth e presenceo fhopper sa tth ebas eo fth este mo fth eric eplant ,an dindicat etha t theseinsect sdamag eth eplant sb ysuckin gth esa p('thes einsect sar esuckin gth e nutrientstake nb yth eplan tfro mth esoil 1)o rtha tthe yinjec ta poisonou s substanceint oth eplant .Farmer scontro lhopper swhe nsufficien tnumber sar e presenti nth efiel deithe rb yfolia rsprayin g (greenlea fhoppers )o rb ysprayin g towardsth ebas eo fth eplan t(brow nplanthopper) ,usuall ywit hShellcarb .

Thelas tinsec tpes to fthi sgroup ,ric ebug s(tianqaw) ,ma yhav ea devastatin g effecto nfina lgrai nyield si fa sever einfestatio noccurs .Th eloca lexpressio n 'youar evisite db yric ebugs 'mean stha tsomebod y isver yunlucky .Bot hnymph san d adultssuc kth esa po fdevelopin gric egrain swhic hma yresul ti nshrivelled , empty,o rpartiall yfille dgrains .Ric ebu gpopulation susuall y increasea tth een d ofth erain yseaso nan dwill ,therefore ,especiall y affectth ephoto-sensitiv eBE- 3 varietywhic hi sharveste di nDecember .War mweather ,overcas tskies ,an dfrequen t drizzlesfavou rth edevelopmen to fth epest .N omajo rinfestation soccurre ddurin g thesurve yperiod ,bu ti fnecessary ,farmer swil ld oeverythin gi nthei rpowe rt o controlth epes ti ncas ethe yexpec ta goo dharves twhic hma yg oa sfa ra ssprayin g pesticidesever yothe rthre edays . APPENDIX VI

Specificationo f theRando mCoefficien tRegressio n Model

Arando m coefficient model specifies arelationshi p inwhic h the left-hand or dependent variable respondst oa uni t change inth e right-hand orexplanator y ! variable with arando m change that ischaracterize d by acertai n mean andvarianc e (Theil, 1971). Thesemodel sar eusuall y applied topoole d cross-section andtime - seriesdat at o allow forheterogeneit y between observation units.Anothe r rationale forusin g thismode l istha t incomplete specification isunavoidabl e because ofth e inevitable omission ofinfluentia l variables.

Mount (1974)point st oth epotentia l useo f thismode l for risk estimation '..., in aproductio n process,particularl y ifinfluence d by the weather, it isth e unexplained variability ofoutpu t overtim etha t contributes toris k .... ifth e slopecoefficient s arespecifie d asstochastic , thevarianc eo foutpu t dependsupo n the input level,an d asa result , risk behaviour can be investigated inthi styp e of model1.

Based onSwamy' sspecificatio n (Swamy, 1970), the random coefficient regression (RCR)mode l with oneexplanator y variable can bewritte n asfollow s (Fladdala,1977) :

y.. = b.x .. +u .. ;i = 1,2 , T (time periods) 'ij l IJ IJ j =1,2 , N (observations) (1) E(u.. )= 0

var(ui .. )\= s . 2

2 theb .ar eindependen t withmea n ban dvarianc ed .W eca n write 2 b. =b + v . ,wher eE(v. )= 0 an dvar(v. )= d l l I i'

Underthes e assumptions regressionmode l (1)ca nb ewritte n as

y.. =bx .. +w .. ij iJ ij where w.. =u .. +v.x .

i \ 2 J-2 (2) and vartw.. )= s .+ d x .. 2 cov(w.. ,w. ,) = cov(u .. +v.x ..)(u. ,+ V.X. ,) = d X ..X. , ij ik ij li j lk ll k ijl k cov(w.. ,w., ,) = 0 :fo ri^i 1 foral l jan dk ij l'k

Thusth evariance-covarianc e matrix ofth ew . is

V= s 2I+ d 2x.x! l li 321 In statistical terms,thi smode l canb eregarde d asa mixe d model,wit hbot h fixed and random effects.I tcorrespond sclosel y toth emode l evaluated by Just andPop e (1979)a shavin g thebes tpropertie swit h respect toreasonabl e risk criteria.

Equation (2)canno tb eestimate d byordinar y least squares (OLS),becaus evar(w .. ) isno tconstant .OL Swoul d provide anestimat eo f btha ti sconsisten t butno t efficient.T ocalculat e anefficien t estimator wemus tus eth egeneralize d least squares (GLS)estimator :

b = (2x!(s?I + d2x.x!)"1x.)"1 (2x!(s?I +d 2x.x!)"1y.) (3) ~,1 1 Ii ' i' •" I I li I whichca n be simplified as T b = y w.tj. whereb .i sth eestimato ro f b.fro mequatio n (1)correspondin g toth eit htim e period

•*! =(2(l/(d 2 + s^/Cx'x,.))))"1 (l/(d2+ s 2/(x!xj)) (*)

2 Hence,i fd =0,wha tequation s (3)an d (4)mea n istha t bi sa weighte d averageo f 2 b., theweight sbein g inversely proportional toth e variances.I fd islarg e 2 _ compared to s./(x!x.),th eweight s (4)ar ealmos tequal ,the nb isclos et oa 2 simpleunweighte d averageo fb. .Th e samewil lb e true ifs./(x!x. )ar ealmos t equal. 2 2 2 2 Theparameter st ob eestimate d areb ,d ,an d s.(i=1, .., T).Becaus ed an d s.i n equation (4)ar eunknown ,w ecanno t directly computeth eGL Sestimato ro f equation (3).Maddal a (1977)suggest susin g somepreliminar y consistent estimators forthes eparameters .T oobtai n these,w e first estimate equation (1)separatel y for each timeperio d toge tb .an d thevecto ro f residualsu. ,afte r whichw eca n

s".2= NM" 1u;u -i.- l li

32= T" 1 SB2- (T_12B.)2

-2 -2 Althoughbot h s.an d d arebiase d estimators,fro m an estimationpoin to f view they areprobabl y theleas tarbitrar y ones. REFERENCES

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KEUZE ENONZEKERHEI DI ND E SEMI-ZELFVOORZIENINGSLANDBOUW. Een studie over besluitvorming inee n Filippijnsdorp .

Deze studie handelt over de reaktie vanFilippijns e boeren op onzekerheden in de landbouwbedrijfsvoering en de daaruit voortvloeiende risiko's.He t risikogedrag van boeren wordt bestudeerd tegen deachtergron d van landbouwintensivering op basis van de introduktie vand e zogenaamde 'verbeterd zaad-kunstmest' technologie.Dez e technologie isvaa k bekritiseerd vanwege de,i n vergelijkingme t de bestaande technologie,hog e benodigde investeringen end e daaraan verbonden risiko's.D e aversie van boeren om risiko's teneme nword t genoemd alsee n van de faktoren dieee n trage adoptie van deze technologie veroorzaken. Teneinde de invloed van risiko-aversie op de besluitvorming van boeren te onderzoeken dient een onderscheid gemaakt teworde n tussen (1)d e bereidheid van boeren risiko's tewille n nemen en/of (2)d e kapaciteit van boeren risiko's te kunnen nemen.Indie n boeren inhe t algemeen een geringe bereidheid vertonen risiko's te nemen, kan dit leiden tot een ekonomisch suboptimaal gebruik van aanwezige produktiemiddelene n te lageinvesteringe n innieuw e technologie.Al sarm e boeren geen risiko's kunnen nemen vanwege een te geringe risikodraagkracht, kan risiko bovendien een onevenwichtige verdeling van de opbrengsten van nieuwe technologie veroorzaken met alsgevol g een verbreding vand e inkomenskloof tussen arme enrijk eboeren .

Konceptuele vraagstukken en praktische problemen betreffende het analyseren vand e invloed van risiko en onzekerheid op de besluitvorming van boerenhuishoudens worden besproken in Hoofdstuk 3.E rword t een kritisch overzicht gegeven vand e verschillende theorieen betreffende besluitvorming onder onzekerheid. De algemene konklusie isda t geen van deze theorieen een voldoende raamwerk biedt op basiswaarva n het voorkomen van risiko-aversie kanworde n bestudeerd en het effekt op de besluitvorming kanworde n bepaald.

Hoofdstuk 4beschrijf t in eenhistorisc h perspektief het proces van landbouwintensivering in relatie tot bevolkingsgroei.Dez e analyse geeft aan dat de introduktie van de zogenaamde 'moderne' rijstvarieteiten ontwikkeld door het IRRI (IR-varieteiten)e n het,o p deze varieteiten gebaseerde,verbouwe n van twee opeenvolgende rijstgewassen inee n seizoen,ee nnieuw e fase is in een kontinu proces van landbouwintensivering. Een proces dat reeds begon aan het eind van de veertiger jaren onder invloed van een toenemende bevolkingsdruk op het land. Invergelijkin g met hun voorganger BE-3 - nu beschouwd alsee n traditionele rijst varieteit - isd eadopti e van IR-varieteiten relatief snel gegaan.O p grote schaal vond deze adoptie echter niet eerder plaats nadat boeren zelf op een suksesvolle wijze de teelt van IR- varieteiten geadapteerd hadden aan regenafhankelijke produktie- omstandigheden. 332 De nieuwe rijsttechnologie heeft een effektiever gebruik van gezinsarbeid mogelijk gemaakt en heeft het inkomen van individuele boerenhuishoudens verhoogd. Echter,vanweg e de door deze technologie geinduceerde veranderingen in het gebruik van arbeid in de rijstbouw en de introduktie van arbeidsbesparende technologie (dorsmachines), nam voor een groeiende bevolking het totaal aantal arbeidsplaatsen in de rijstbouw niet toe.Voort s verminderde de inkomensoverdracht tussen dearm e en wat rijkere boeren en verslechterde de positie van vrouwen.I n het proces van landbouwintensivering zijn de risiko's die boeren-huishoudens lopen aanzienlijk toegenomen.He t huidige type landgebruik kenmerkt zich door intensieve teeltsystemen op kleine bedrijven, die sterk afhankelijk zijn geworden van externe inputs.Di t betekent dat,i n vergelijking met het verleden,e r minder mogelijkheden zijn binnen het bedrijf risiko's te spreiden en dat het financiele bedrijfsrisiko toegenomen is.

Het merendeel van de ontwikkelingsprogramma'sgeinitieer d door de overheid in de zeventiger jaren heeft niet of nauwelijks bijgedragen tot de pogingen van boeren het landgebruik te intensiveren. Integendeel,zi jveroorzaakte n een sfeer van onzekerheid en druisden vaak in tegen de behoeften en ekonomische ontwikkeling van boerenhuishoudens.

Teneinde de invloed van risiko op de besluitvorming van boeren­ huishoudens te onderzoeken, werden huishoudens ingedeeld in vijf kategorieen op basis van hun sensitiviteit ten aanzien van inkomensrisiko's.Twe e klassifikatie variabelen werden gebruikt:; (1)d e zelfvoorzieningsgraad welke demat e aangeeft waarin huishoudens door middel van eigen gewasproduktie een surplus J kunnen genereren boven hun basis behoeften en (2)d e fase van de. gezinscycluswelk e de beschikbaarheid van gezinsarbeid bepaalt en; daarmee demat e waarin huishoudens adekwaat kunnen reageren op bepaalde produktie-risiko's.

Verschillen tussen kategorieen van huishoudens in het gebruik van bedrijfsproduktiemiddelen,d e opbouw van het inkomen en konsumptieve bestedingen worden geanalyseerd inHoofdstu k 6. Huishoudens verschillen aanzienlijk wat betreft de mogelijkheden om hun levensomstandigheden te verbeteren en hun risiko-nemende kapaciteit te verhogen. In scherp kontrast met de surplus huishoudens bestaat er voor niet-surplushuishouden s nauwelijks ruimte voor het terugdringen van de bestedingen en het kreeren van reserves.Doo r lage reserves en de noodzaak aan voedsel- behoeften te voldoen, zijn jonge niet-surplus huishoudens gedwongen hun schaarse arbeid te investeren inaktiviteite n die direkt inkomen opleveren - bijvoorbeeld in loonarbeid voor andere boeren - ten koste van arbeidsinvesteringen in eigen landbouw- aktiviteiten. Vanwege een hogere arbeidsbeschikbaarheid per konsumptie-eenheid is de kategorie niet-surplus huishoudens in h$t midden van de gezinscyclus in staat veelmee r gezinsarbeid in eigen landbouwaktiviteiten te investeren zonder dat daarbijkort e: termijn inkomensgenerende aktiviteiten in gevaar komen. In feite 333 heeft dezekategori e huishoudens aanzienlijke problemenme t het vinden van lukratieve aktiviteiten om hun arbeid in te zetten.D e arbeidsmogelijkheden buiten het boerenbedrijf zijn beperkt, terwijl demogelijkhede nmee r arbeid te investeren in individuele gewassen ekonomischmarginaa l zijn.

In vergelijking met de surplus huishoudens vertonen deniet - surplus huishoudens een lage arbeidsproduktiviteit,di eme t name veroorzaakt wordt door een laag nivova n 'cashinput ' investeringen. De noodzaak om krediet te gebruiken voor konsumptie en schooluitgaven vermindert de kapaciteit vanniet-surplu s huishoudens te investeren in produktieaktiviteiten en noopt hen tot het bewust beperken van het gebruik van krediet.Rente - betalingen van leningen aangegaan in slechte produktiejaren slokken in goede jaren een groot deel van het inkomen op dat overblijft nadat in de basisbehoeften is voorzien.D e kategorie huishoudens in het midden van de gezinscyclus moet bovendien fors investeren in het onderwijs van hun kinderen teneinde zich op de lange termijn enige ekonomische zekerheid te verschaffen.

InHoofdstu k 7word t de relatie tussen de risiko-sensitiviteit van het huishouden en de adoptie van een teeltpatroon van twee opeenvolgende rijstgewassen onderzocht.Huishouden s verschillen wat betreft de inschatting van de risiko's verbonden aan dit teeltpatroon. Zijverschille n ook wat betreft de noodzaak tot verdergaande intensivering van het landgebruik. De invloed van de gezinscyclus - een faktor die gewoonlijk niet beschouwd wordt in adoptie studies - op het adoptiepatroon wordt aangegeven. Deze faktor kan ook aanleiding geven tot cyclische veranderingen in het gebruik van bepaalde typen technologieen. Een analyse van het adoptieproces geeft aan dat voor boeren het experimenteren met nieuwe technologie een belangrijk instrument iso m onzekerheid met betrekking tot die technologie te verminderen.Bovendie n blijkt dat -in tegenstelling totwa t vaak wordt aangenomen - experimenteren niet uitsluitend isvoorbehoude n aan dewa t rijkere boeren.

De besluitvorming van boeren met betrekking tot het gebruik van kunstmest in de rijstteelt wordt behandeld inHoofdstu k 8.Ee n poging wordt ondernomen tot een kwantitatieve analyse van de invloed van risiko op kunstmestgiften.D e problemen die voorkomen bijhe t kwantificeren van de verschillende variabelen welke een rol spelen in zo'n analyse (zoalsrisikodraagkracht ,risiko - attitude, percepties van boeren betreffende opbrengstverhoging door kunstmest en risiko-perceptie)worde n besproken. Percepties van boeren betreffende kunstmest response blijken verbluffend gelijk aan de empirisch geschatte resultaten. In tegenstelling tot percepties en de bereidheid risiko's te nemen, blijkt de risikodraagkracht een belangrijke verklarende variabele te zijn voor verschillen inkunstmestgifte n tussen huishoudens. Percepties en de bereidheid risiko's teneme n zijn echter van belang in het verklaren van verschillen tussen individuele huishoudens. 334 Een samenvatting vand e belangrijkste kenmerken vanbesluit - vormingsprocessen van boerenhuishoudens en een synthese van bevindingen betreffende het risikogedrag van boeren wordt gegeven inHoofdstu k 9. Alsalgemen e konklusie wordt gesteld dat het gevaarlijk isrisiko-analyse s tebasere n op'oppervlakkig e observaties en tegeneralisere n over het risikogedrag van kleine. boeren.Te n eerste,diene n veel produktie-strategieen en -technieken,waarva n gedacht wordt dat zijkenmerken d zijn voor het risiko-averse gedrag van boeren,he t tweeledig doel debest e ekonomische resultaten te behalen enhe t risiko zoveel mogelijk te beperken.Zi jzij n het resultaat van (1)ee nmeerjari g proces van 'voorzichting optimaliseren1 gekenmerkt door geleidelijke aanpassingen aan veranderende kondities binnen het huishouden en externe omgevingsfaktoren,he taktie f zoeken naar verbeteringen en het experimenterenme t nieuwe mogelijkheden, en (2)sekwentiel e besluitvormingsprocedurese n risiko-kontrole gedurende het landbouwseizoen,gekenmerk t door adaptatie aanonzeker e produktie- beperkingen en -mogelijkheden zoals ze zich in het verloop vanh$ t seizoen voordoen.

Ten tweede ishe t onmogelijk risiko als een eenduidig koncept te definieren. Risiko beschrijft verschillende typen onzekerheid, terwijl dehoogt e vanhe t risiko afhangt van de risikodraagkracht van het huishouden en dusonderhevi g isaa n veranderingen.Binne n een ogenschijnlijk homogene groep vanklein e boerenhuishoudens bestaan er dusdanige verschillen in financiele risikodraagkracht en samenstelling van produktiemiddelen,da t huishoudens opbrengstrisiko's als ook financiele risiko's verbonden aan produktieaktiviteiten verschillend kunnen inschatten. Bovendien kan er voor hetzelfde huishouden eenkonflik t bestaan tussen • risiko-vermindering op dekort e eno p de lange termijn.Me n kan '• dus niet zonder meer vaststellen of risiko'sverbonde n aan de adoptie van nieuwe technologieen het keuzegedrag van een bepaaldd kategorie huishoudensmee r beinvloeden dan dat van een andere i kategorie huishoudens.Aangegeve n dient teworde n welk type risiko het betreft,e n wanneer en onder welke omstandigheden een investeringskeuze gemaakt wordt.Me t betrekking tot opbrengstrisiko's van individuele landbouwaktiviteiten kunnen boeren niet alsrisiko-aver s of risiko-prefererend gekarakteriseerd worden.Dezelfd e boer kan beide typen gedrag vertonen.

Boeren zijn gewend om risiko'st e nemen. In hetalgemee n zijn ze niet erg geinteresseerd inhe t stabiliseren van gewasopbrengsten als dit een vermindering van hun verwachte inkomen betekent.Het j zijn niet zozeer deopbrengstrisiko' s ind e landbouw die het ', keuzegedrag van arme boeren beinvloeden,maa r denoodzaa k te kiezen voor aktiviteiten die direkt een inkomen opleveren enhet > effekt van financiele risiko'so pd e bestaanszekerheid vanhe t huishouden beperken.Teneind e het financiele bestaansrisiko op een acceptabel nivo tehandhaven , beperken arme boeren bewust he^ gebruik vankredie t en financiele investeringen in de landbouw.i Wanneer, vanwege risikofaktoren,non-adopti e van winstgevende 1

335 technologieoptreed to fsub-optimal einvesteringe n ind elandbou w voorkomen,moe td eoorzaa knie tgezoch tworde ni nee nrisiko - aversehoudin gva nboeren ,maa ri nhu ngering efinanciel e risikodraagkracht.Gegeve nd ekontinu eschuldpositi eva nd eniet - surplushuishouden si she tnie tkunne nneme nva nfinanciel e risiko'see nbelangrijk eoorzaa kva nsub-optimal einvesteringe ni n delandbou we nd everbredin g vand einkomenskloo ftusse narm ee n rijkeboeren . CURRICULUMVITA E

AbrahamHuijsma nwa sbor ni nPijnacker ,th eNetherland s in 1951.H e receivedhi ssecondar yeducatio na tth eStedelijk eScholengemeen - schap 'HugoGrotius 'i nDelf tan dobtaine d theHBS- BCertificat ei n 1970.I n 1979h egraduate d indevelopmen teconomic san dth efollow ­ ingmino rsubjects :developmen tsociology ,agricultura l creditan d ruralco-operative s indevelopin gcountries ,an dth esociologica l aspectso fdevelopmen tplannin gi nrura larea sa tth eAgricultura l UniversityWageningen .I nth eperio do f 1977-78h eparticipate di n theresearc hprojec t 'TheSmal lFarme ran dDevelopmen tCooperation ' ofth eInternationa lAgricultura lCentre ,Wageningen .Durin ghi s studiesh ewa sinvolve d ina nevaluatio nstud yconcernin gsmall ­ holdertobacc oproductio nfo rth eLilongw eLan dDevelopmen tProgfam - me,Malawi .

Aftergraduatin gi n 1979,h ebecam ea researc hfello wo fth eInter ­ nationalRic eResearc hInstitut e (IRRI)i nth ePhilippine san d carriedou ta researc hprojec tconcernin gris kmanagemen tstrategie s offarm-households .A sa researc hassociat eo fth eDepartmen to f DevelopmentEconomic so fth eAgricultura lUniversit yWageninge n (1980-83),h econtinue dworkin gi nth ePhilippine so nth eabov e projectunti lJun e 1982.Thi sthesi si sa resul to fthes eactivities . In 1984h ejoine d theRura lDevelopmen tProgramm eo fth eRoya l TropicalInstitute ,Amsterdam ,a sa nagricultura leconomist .

distributie:Koninklij kInstituu tvoo rd eTrope n- Amsterda m ISBN9 0683 2Oi l4