IFPRI Discussion Paper 01915 March 2020 Demand and Supply Side Factors for Accelerating Varietal Turnover An Evidence from Soybean in India Chandra Sekhara Rao Nuthalapati Vinay K Sonkar Anjani Kumar South Asia Regional Office INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE The International Food Policy Research Institute (IFPRI), a CGIAR Research Center established in 1975, provides evidence-based policy solutions to sustainably end hunger and malnutrition and reduce poverty. The Institute conducts research, communicates results, optimizes partnerships, and builds capacity to ensure sustainable food production, promote healthy food systems, improve markets and trade, transform agriculture, build resilience, and strengthen institutions and governance. Gender is considered in all of the institute’s work. IFPRI collaborates with partners around the world, including development implementers, public institutions, the private sector, and farmers’ organizations, to ensure that local, national, regional, and global food policies are based on evidence. IFPRI is a member of the CGIAR Consortium. AUTHORS Chandra Sekhara Rao Nuthalapati ([email protected]) is professor of economics at the Institute of Economic Growth, Delhi, India Vinay K Sonkar ([email protected]) is a research analyst-II in the South Asia Regional Office of the International Food Policy Research Institute (IFPRI), New Delhi, India. Anjani Kumar ([email protected]) is a research fellow in the South Asia Regional Office of IFPRI, New Delhi, India. Notices 1 IFPRI Discussion Papers contain preliminary material and research results and are circulated in order to stimulate discussion and critical comment. They have not been subject to a formal external review via IFPRI’s Publications Review Committee. Any opinions stated herein are those of the author(s) and are not necessarily representative of or endorsed by IFPRI. 2 The boundaries and names shown, and the designations used on the map(s) herein do not imply official endorsement or acceptance by the International Food Policy Research Institute (IFPRI) or its partners and contributors. 3 Copyright remains with the authors. The authors are free to proceed, without further IFPRI permission, to publish this paper, or any revised version of it, in outlets such as journals, books, and other publications. Contents Abstract ............................................................................................................................................... iv Acknowledgements.............................................................................................................................. v List of acronyms ................................................................................................................................. vi Introduction ......................................................................................................................................... 1 Conceptual Framework ........................................................................................................................ 3 Analytical Framework and Data .......................................................................................................... 5 Move Towards Dynamics of Adoption ........................................................................................... 5 Factoring in Time for Switching Technologies ............................................................................... 6 Duration Model ................................................................................................................................ 7 Data .................................................................................................................................................. 8 Soybean Farm Households and Varietal Adoption .............................................................................. 9 Adoption of Soybean Varieties ...................................................................................................... 13 Econometric Results and Discussion ................................................................................................. 17 Duration of Switching Varieties Through Survival Function ........................................................ 17 Drivers of Varietal Change in Soybeans with Parametric Duration Analysis ............................... 20 Conclusions and Policy Implications ................................................................................................. 24 References ......................................................................................................................................... 27 List of Tables Table 1: Socioeconomic characteristics and varietal perceptions of surveyed soybean farming households ...............................................................................................................10 Table 2: Soybean varieties grown by farm households ........................................................14 Table 3: Varietal adoption in soybean across farm size categories in India .........................16 Table 4: Duration model regression results with hazard ratio ..............................................21 Table 5: State-wise duration model regression results (hazard ratio) (Gompertz distribution) ...........................................................................................................................23 List of Figures Figure 1: Field survey locations in India ................................................................................9 Figure 2: Variety-wise shares of certified seed quantity from 2017 to 2019........................14 Figure 3: Soybean productivity in India and in important states (kg/ha) .............................15 Figure 4: Kernel density of variety-wise yield .....................................................................15 Figure 5: Soybean varietal adoption curve of surveyed farmers ..........................................16 Figure 6: Varietal traits considered for farmers’ selection of soybean varieties ..................17 Figure 7: Kaplan–Meier survival estimates for two leading varieties ..................................18 Figure 8: Kaplan–Meier survival estimates across size categories of farmers (JS 95–60 variety) ...........................................................................................................19 Figure 9: Kaplan–Meier survival estimates across size categories of farmers (JS 335 variety) ...............................................................................................................19 Abstract Soybeans were promoted on a large scale in India in order to augment farmers’ incomes in poverty- stricken areas and to combat dietary protein deficiencies. Soybean cultivation in India is a unique success story, having expanded in area from zero in 1970 to 11.5 million hectares by the first decade of this millennium At this juncture, the major concern of policymakers is to sustain cultivation of soybeans by ensuring reasonable growth in yield and farm incomes in the face of competitive yield improvements in comparable crops such as corn. This paper tries to understand the varietal adoption patterns and the stages of diffusion of existing varieties. It uses a large primary data set of 1,410 farm households in central and western India to unravel the underlying pathways for accelerating varietal turnover. It employs a dynamic framework by harnessing duration analysis. The average age of the adopted varieties is 8.4 years, which is relatively high and implies slower varietal turnover. Survival functions show that adoption of the leading varieties has reached the saturation stage and that policy intervention at this point can thus have a rapid impact in terms of varietal replacement. The analysis of rate of change of varietal replacement through hazard functions throws up interesting conclusions that are relevant to the formulation of new policies. Examination of all three conceptualized pathways—farm characteristics, sources of information, and perceived traits of the varieties and of genetic improvements—suggest the need for substitution of existing varieties with new improved varieties. While the drivers of varietal change do not vary with size of farm, regional differences are relevant. This paper discusses the potential impact of policy on production and income. Keywords: Varietal adoption, Soybean, Duration model, Variety traits “A lack of dynamism in varietal change in food crop production represents a wasted opportunity that is potentially high, exacting a heavy toll on poor producers and consumers alike”. Walker and Awang, 2015 iv Acknowledgements This study was undertaken as a part of the CGIAR Research Program on Policies, Institutions, and Markets (PIM) led by the International Food Policy Research Institute (IFPRI), and as part of ICAR-IFPRI workplan. We acknowledge the Indian Council of Agricultural Research (ICAR), New Delhi, for extending financial support to conduct this study. We are grateful to Dr Trilochan Mohapatra, Secretary, DARE and DG, ICAR. During the study, we interacted with many scientists who are working on Soybean. We are grateful to them for their useful suggestions and feedback. v List of acronyms AIC Akaike Information Criterion BIC Bayesian Information Criterion CDF Cumulative Distribution Function CROPSAP Crop Pest Surveillance and Advisory Project GoI Government of India HYVs High Yielding Varieties ICAR Indian Council of Agricultural