The farm-level economics of conservation agriculture for resource-poor farmers

• Conservation agriculture can increase or decrease farm profits, depending on the context.
• Favourable contexts include larger farms, more resources, less uncertainty, longer time horizons.
• Partial adoption (of a subset of components) can sometimes be superior to full adoption.
• Conservation agriculture should not be promoted as a one-size-fits-all solution.

The farm-level economics of conservation agriculture (zero tillage, mulching and crop rotation) are described, reviewed and modelled. The economics are defined broadly to include not just short-term financial benefits and costs, but also the whole-farm management context, constraints on key resources such as labour and capital, risk and uncertainty, interactions between enterprises, and time-related factors, such as interest rates and the urgency of providing for the farm family. A wealth of evidence shows that these economic factors and variables related to them have significant influences on farmers’ decisions about adoption of conservation agriculture. Literature on the farm-level economics of conservation agriculture for resource-poor farmers is reviewed. There is not a large body of high-quality relevant studies. Those that have been published highlight that the economics are highly heterogeneous and need to be considered on a case-by-case basis. Their results tend to indicate that it would be profitable to adopt conservation agriculture or components of it (although not in all cases). This contrasts with disappointing adoption in many of the regions of interest. Potential reasons for this disparity are discussed. A general model of the farm-level economics of conservation agriculture and its components is presented, and used to illustrate influences on the overall economic attractiveness of conservation agriculture. Key factors that would tend to discourage adoption in situations that otherwise look favourable include: the opportunity cost of crop residues for feed rather than mulch, the short-term reduction in yields under zero tillage plus mulching in some cases, combined with short planning horizons and/or high discount rates of farmers, farmer aversion to uncertainty, and constraints on the availability of land, labour and capital at key times of year. Good quality economic analysis should be used more extensively to guide research and extension in this area, particularly in relation to the targeting of effort, and adaptation of the system to suit local conditions.