Does commercial farming protect the environment? Evidence from chemical input use in Haryana, India

Saroj Verma, Kirtti Ranjan Paltasingh and Souryabrata Mohapatra

MPRA Paper from University Library of Munich, Germany

Abstract: Purpose This study investigates the impact of contract farming (CF) on chemical input usage (fertilisers, pesticides and herbicides) in wheat farming in Haryana, India, weighing on environmental risks from unsustainable chemical input usage under CF. Design/methodology/approach The research employs an endogenous switching regression (ESR) model using data from 754 farm households, enabling a comparative analysis between contract and non-contract farmers. Findings The results show that farmers who adopted CF would have reduced chemical input usage by 26.8% if they did not adopt it. Conversely, non-adopters would have increased chemical input usage by 54% if they adopted CF. While CF enhances farm productivity and income, it also increases chemical input usage, posing risks such as soil fertility loss and water contamination. Originality This study addresses the overlooked topic of chemical input usage in CF research. Leveraging household data and using an endogenous switching regression model provides unique comparative analysis and counterfactual scenarios. The findings contribute to understanding the environmental implications of CF and propose actionable recommendations for sustainable agricultural practices. Managerial or Policy implications The study recommends promoting organic farming and minimal chemical usage in CF agreements. Government intervention is needed to reduce the environmental impact of CF. Policies should promote environment-friendly fertilisers and provide guidelines on chemical usage based on crop variety, seed quality and soil fertility. Research limitations/implications The geographic focus on Haryana may limit generalisability. Reliance on cross-sectional data from a single season might not capture variability across different seasons. Future research could expand to other regions, use longitudinal data and investigate a broader range of crops.

Keywords: Contract farming; Chemical inputs; Endogenous switching regression; Haryana, India (search for similar items in EconPapers)
JEL-codes: Q12 Q15 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-agr and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/125805/1/MPRA_paper_125805.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:125805

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().