Perceptions, Risk Attitude and Organic Fertilizer Investment: Evidence from Rice and Banana Farmers in Guangxi, China

Xinjian Chen, Di Zeng (), Ying Xu and Xiaojun Fan
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Xinjian Chen: Business School, Guangxi University, Nanning 530004, China
Ying Xu: The Centre for Global Food and Resources, The University of Adelaide, Adelaide 5005, Australia
Xiaojun Fan: Business School, Guangxi University, Nanning 530004, China

Sustainability, 2018, vol. 10, issue 10, 1-14

Abstract: Overuse of chemical fertilizer has led to severe land degradation and environmental pollution in China. Switching to organic fertilizer may improve soil quality and reduce pollution, which is meaningful to the sustainable development of Chinese agriculture. This study examines how farmers’ perceptions and risk preference affect their organic fertilizer investment using a representative rural household survey from Guangxi, a major agricultural region in China. Tobit and double-hurdle models are used to empirically test their impacts on organic fertilizer adoption and investment. An ordinary least squares model is used to regress chemical fertilizer use on the same set of explanatory variables to compare and contrast farmers’ different fertilizer investment behaviors. It is found that both organic fertilizer perceptions and risk attitude significantly affect organic fertilizer investment. Perceived yield-increasing and quality-improving effects encourage organic fertilizer investment, while perceived cost increases discourage it. Moreover, risk-averse farmers are more likely to invest in organic fertilizers. Most of the perceptions affecting organic fertilizer investment have an opposite impact on chemical fertilizer investment, which suggests substitutability between organic and chemical fertilizer. Interventions that aim to improve farmers’ perceptions of organic fertilizer and illustrate its risk-reduction effect could be effective in promoting organic fertilizer use, which can help achieve China’s sustainable development of agriculture.

Keywords: organic fertilizer; perception; risk preference; rice; banana; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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