Is direct seeded rice a boon for economic performance? Empirical evidence from India

The direct-seeded rice (DSR) establishment method can improve productivity and labor efficiency while taking into account the soil and hydrologic conditions of the field, the availability of appropriate land equipment, and irrigation-drainage systems. Using plot- and household-level data, we analyze the impacts of DSR adoption in two rice-growing states of India. We account for observed and unobserved heterogeneity using endogenous switching regression. We analyze the yield and costs effects of DSR adoption. Our study shows a small but significant effect of DSR adoption on yield and costs. We find increase in rice yields (by 3.74%) for DSR adopters; an increase in rice yields (by 6.79%) if the DSR method were adopted on puddled transplant rice (PTR) parcels. We find a 7.51% reduction in total costs for DSR adopters; a decrease in total costs (by 3.71%) if the DSR method was adopted on PTR parcels. DSR farmers can significantly reduce their fertilizer and land preparation costs. Hence, the decision to adopt DSR may help households with limited resources to reduce their cost of production without compromising the yield.