Effects of using climate-smart agricultural practices on factor demand and input substitution among smallholder rice farmers in Nigeria

Abstract

The need to combat climate change and its devastating impacts while simultaneously addressing the urgent need to achieve zero hunger and no poverty as well as promoting good health and well-being makes transforming Africa’s smallholder agriculture towards greater sustainability an urgent necessity. This study examines the influence of the agricultural practices with climate-smart agriculture potentials (AP-CSAPs) on labour (and other production factors’) demand and input substitution. The study was based on primary data collected in a cross-section survey, in which 1500 smallholder rice farmers were drawn by a multistage random sampling across farming communities, local government areas, and states in Nigeria. The econometric data analysis was within the framework of Zellner’s Seemingly Unrelated Regression method in estimating parameters of a set of factor share equations. The study found that labour and fertilizer could not be readily substituted in Nigeria; hence, an increase in the unit price of labour and fertilizer results in a higher share of labour and fertilizer in the budget. In terms of the effects of AP-CSAP use on factor cost share, most of the AP-CSAPs are labour-intensive with the exception of agroforestry. Similarly, the use of organic manure and residue retention is significantly pesticide saving while zero/minimum tillage use is pesticide and fertilizer using. Given that most AP-CSAPs require higher labour requirements, their success is often impeded by labour shortages. Some of the policies to promote AP-CSAPs include creating incentives in the form of higher wages and/or compensation to bring people back to agriculture. Accessibility and availability of key inputs such as improved crop variety and seed of green manure and/or cover crops, and leveraging on community-driven development approach to provide labour-saving equipment to rice farmers, may boost the adoption of labour-using AP-CSAPs in Nigeria.