Friedrich Schiller University Jena

School of Economics & Business Administration

Chair of Economic Policy

Prof. Dr. Andreas Freytag

Seminar – The Economics of Sustainable Development Goals (MW 25.5)

Winter 2015/16

Development of Nature - Sustainable Agriculture in Low Income

Countries

Supervisor: Sebastian Spiegel

Submitted by:

Name: Shahnewaz Tanveer Deip

Submission date: 23.11.2015
Table of Contents

1. Introduction 1

2. Agriculture in Twentieth Century 2

3. Concept of Sustainable Agriculture 3

4. Threats to Sustainable Agriculture in Low Income Countries and Positive

Trend 4

4.1. Threats to Sustainable Agriculture in Low Income Countries 4

4.2. Positive Trends 8

5. Empirical Analysis 10

6. Conclusion with Policy Implication 14

References 16
List of Tables

Table 1: Potential Carbon Mitigation from Land-Use Change, 2003-2012 10

Table 2: Selected Characteristics of Identified Farm Household Groups 11

List of Abbreviation

ANN Artificial Neutral Network

CA Cluster analysis

CIAT International Centre for Tropical Agriculture

ESCAP Economic and Social Commission for Asia and the Pacific

FAO Food and Agriculture Organization

IMF International Monetary Fund

PCA Principal Component Analysis

UN United Nations
1. Introduction

A remarkable growth in agriculture has been observed in recent decades. Since the be-
ginning of the 1960s, the aggregate world food production has grown by more than 220%
(FAO, 2013). Though the world population has been increased by more than four billion
over the same period, the per capita has exceeded the population growth. But the per
capita food production is quite different in the different regions. The per capita food pro-
duction trends have been positive across the most regions, though the growth rate has
been lower in Africa for the last 20 years (FAO, 2015).

The food crisis in African countries was deepened by recent food and financial crises
(Adesina, 2010). Poor agricultural performance as well as poor policies are responsible
for this situation. The lowest labour productivities, lowest chemical fertilizer use rates
with declining soil fertility has caused this continent to decline the agricultural output
levels. As a result, Africa is losing world market share for its export crops (World Bank,
2007). Moreover, they are falling short in supplying the sufficient food to feed the rapidly
growing population in spite of increased yield production. Therefore, food insecurity ex-
ists there, especially the rate is high in most of the Sub-Saharan African. Meanwhile,
people in Asia and Pacific are also facing the problem of food insecurity. Despite of
achieving the sufficient food production, people are food insecure because of failure to
access to food. According to the measurement of dietary energy requirement, on average
of 16% people of these region were hungry (United Nations ESCAP, 2009). The people
of South and South-West Asia are undernourished. Though Afghanistan is mostly af-
fected of this problem, a number of other countries also have high level of undernourish-
ment.

The low income countries have faced food insecurity due to climate change and globali-
zation in recent decades. Climate change aggravates the impacts of droughts, soil degra-
dation and decline the biodiversity in these countries (Flora, 2010). Agriculture has been
transformed to the capitalist system of production by disconnecting from nature to in-
crease yields (Heslin, 2015). As a result, it has become possible to support the growing
population but the negative consequences on the environment has been observed. There-
fore, the international bodies emphasize on sustainable agriculture for food security. Sus-
tainable agriculture takes environmental health, economic profitability as well as equity
into the account besides the food production. But, it is becoming difficult day by day for

1
sustainable agriculture. Land degradation, deforestation and decrease of water quality and
quantity are the main threats to the sustainable agriculture.

The main aim of this paper are to analysis the scopes and limitations of sustainable agri-
culture in low income countries. The study is based on the works of Adesina (2010),
Helsin (2015) and Woelcke (2006). In these papers, the present condition of agriculture
in low income countries and obstacles and opportunities of sustainable agriculture have
been discussed with remarking some strategies for sustainable agriculture.

This paper is structured with the following sections. In section 2, agriculture in the twen-
tieth century has been described briefly. The section 3 consists of the concept of sustain-
able agriculture. Following this, the threats to sustainable agriculture in low income coun-
tries and positive trends in agriculture are discussed in sections 4. An empirical analysis
is presented to illustrate the opportunities and constraints of sustainable agriculture. At
the end, a conclusion is drawn with the summary of this paper and policy implication.

2. Agriculture in the Twentieth Century

The agricultural revolution started in early 1900s with replacing the animals by machine
for ploughing. Previously farming and animal husbandry were in sustainable relationship
in the traditional agriculture. Crops were used as food for human and animals while the
animals provided the food for humans and fertilizer for the crops (Jordan & Constance,
2008). The chemical fertilizer and pesticides came to use over natural manure after World
War II. The agricultural revolution carried on as the genetically modified seeds replaced
the standard breeds. These revolutions managed to increase the yield drastically to meet
the demand of increasing population by creating a detached food system from nature
(Helsin, 2015). The ecosystem has been altered and controlled to produce more food as
the revolutions succeeded. As a result, the environment has been imbalanced.

The modern agriculture system has contributed to greenhouse gas emissions largely as
the arable land have been used intensively. Extensive practice of monocropping has
caused to change the landscape as well as to imbalance the biodiversity. Moreover, using
the chemical fertilizer and pesticides is responsible for decaying soil fertility and polluting
water (Kaur, 2013). Deforestation and desertification are the result of increasing of pas-
tures. In addition, widespread use of underground water for irrigation is worsening the
condition.

2
These technology-intensive system were advantageous to some large agricultural compa-
nies to gain huge profits. These corporations controlled the market, influenced the envi-
ronmental policy and made farmers dependent on their product by disempowering them
(Helsin, 2015). Thus, the environmental health as well as the quality life of farmers were
neglected. Disempowerment of farmers led them to a vulnerable situation. Integrated
world agricultural market created the scope of trading of agricultural product. Small farm-
ers in many countries left farming and shifted to other jobs due to failure to exist in com-
petition. As a result, a large number of population became dependent on the international
food market what caused to the food insecurity.

3. Concept of Sustainable Agriculture

The concept of sustainable agriculture first developed in 1987 (Kaur, 2013). A book,
named “Silent Spring”, written by Rachel Carlson, was published in 1962. The awareness
about the negative effect of chemical pesticides on environment was raised by this book
what led to the environment movement later globally (Helsin, 2015). In 1987, the concept
of sustainability came explicitly in the UN’s report ‘Our Common Future’. As agriculture
became the major component of sustainability and environmental movement, the perspec-
tive of global food security changed from fighting against the hunger to food access con-
sidering the environment, economy and social condition. However, there are some differ-
ences between sustainable agriculture and conventional agriculture. These differences are
categorized into six categories: dependence/independence, competition/community,
domination/harmony with nature, specialization/diversity, and exploitation/restraint. The
sustainable agriculture practice values local communities in these categories (Helsin,
2015).

The sustainable agriculture is defined in various ways by the different parties who are
engaged in it. According to the UN definition, the sustainable agriculture is a method of
food production without compromising the future of food production. This definition has
been extended by many authors. Kaur suggested that, sustainable agriculture implies a
better use of existing resources by reconfiguring the human capital and social capital
(Kaur, 2013). Similar to Kaur, sustainability is referred by Pretty as the system with aims
to make best use of environmental goods and services without damaging these resources
(Pretty, 2008). In some cases, rejection of agriculture with corporation is regarded as the

3
sustainable agriculture. The aspects to define this process mostly fall into three broad
groups: ecological, economic and social sustainability.

The components related ecosystem and the environment are emphasized mostly for sus-
tainable agriculture. Reduction of dependence on non-renewable sources by shifting to
renewable and local sources for energy and farm inputs is the key principle for sustaina-
bility in agriculture. Since the closed loop farming has some features, such as crop rota-
tion, using organic fertilizers, combined production of crops and livestock and solar and
wind-power harvesting, addressing this system can reduce the dependence on the existing
system.

The sustainable agriculture should move toward the smaller-scale and less capital and
technology intensive production. The farmers can consider external cost by using produc-
tivity knowledge and skill what can improve their self-reliance as well as substitute hu-
man capital. Moreover, productive use of people’s collective capacities can solve the ag-
ricultural and natural resource problems of pest, irrigation, forest and credit management
(Pretty, 2008).

The social equity and the economic equity in the food system are two other important
issues of sustainable agriculture. Decentralizing the control and valuing the local com-
munities can confirm these equities. The decentralization in agriculture ensures the in-
volvement of more farmers and confirm the direct sales from the farmers. Direct purchase
from the farmers reduces the price by removing short-term cost besides saving the farmers
from exploitation.

4. Threats to Sustainable Agriculture in Low Income Countries and Pos-

itive Trends

4.1. Threats to Sustainable Agriculture in Low Income Countries

Several threats are identified as challenging for the sustainable agriculture, especially in
low income countries. The people related to agricultural sector are affected by these fac-
tors particularly the dwellers. Environmental degradation and climate change along with
a series of other threats are the concerns what is creating difficulties for farmers to yield.
These threats or challenges can be categorized under (a) environmental, (b) structural and
(c) policy categories.

4
(a) Environmental factors. Environmental factors have explicit impact on the agricul-
tural sector and the people involved with it. Land degradation, deforestation, water de-
pletion and climate changes are determined as the major concerns along with biodiversity
losses.

Land degradation. Land degradation is considered as one of the major threats to sus-
tainable agriculture. Large areas of arable land, grassland have already been destroyed.
This threat put many more lands at risk. It has been predicted to produce twice as much
food than that of mid 1990s with half of the topsoil of that time by 2050 (Ruttan, 1999).
Deserts are expanded in many countries including China due to land degradation. Lands
are degraded due to extensive cultivation in order to increase the yield under the existing
agriculture practice. Using ecologically fragile soil areas, excessive cultivation and poor
management of crop, soil and water interaction cause to land degradation. Moreover, in-
appropriate use of mineral fertilizers and excessive livestock- keeping are two other
causes for land degradation (United Nations ESCAP, 2009).

Deforestation. Forest is the natural protector of watersheds. It is also a great support for
fisheries. Forests are the source of food, fibre and other materials for lots of people, es-
pecially for poor people and small-enterprises over the world. But it is getting harder day
by day to find these materials due to deforestation. Approximately 13 mega hectares of
natural forest are destroyed every year (Hazell & Wood, 2008). Trees are cut down to
collect woods for timber industries. Collecting woods as alternative to fuels is another
reason of deforestation. The mangrove forests in Asia-Pacific region are under high risk
as extraction of timber and export-oriented shrimp cultivation have been emphasized over
the importance of the forest in this region. In Latin America, deforestation is the conse-
quence of large-scale ranching. Deforestation results the losses of one-fifth of the total
forest in low income countries (Hazell & Wood, 2008).

Water depletion. Water scarcity is becoming a serious issue for agricultural growth.
More than 50% of the total water are used for crop production (Hazell & Wood, 2008).
Almost 70% of total water withdrawals are used for rice production across Asia and the
Pacific (United Nations ESCAP 2009). Subsidized constructions of irrigation system
have lowered the prices in many countries what tempted the farmers to withdraw water
from river, over-pump ground water inordinately. This cause a waste of fresh water. Wa-
ter pollution due to industrial wastages worsen the condition. Many countries are now
facing water scarcity due to withdrawing more water to use in domestic, industrial and

5
agricultural sectors than the renewable capacity of natural system. As a result, social sta-
bility is at risk for water conflicts.

Climate change. Climate change has a complex impact on agriculture. Some countries
are benefited for climate change, while it is disadvantageous to others. But this factor is
a threat to attain food security. Conventional agriculture practice causes the emission of
greenhouse gas. In one hand, deforestation to increase the arable land and the pasture land
reduces the capacity of absorbing the carbon dioxide gas. On the other hand, tillage, burn-
ing practice, inordinate use of chemical fertilizers and pesticides contribute to increase of
carbon dioxide gas emission. Moreover, paddy rice cultivation and livestock are respon-
sible for methane gas emission. Carbon dioxide and methane gases have been identified
as liable for global warming and changing pattern of rainfall. Weather conditions become
uncertain due to global warming and variable rainfall. Floods, draughts and storms are
occurring more frequently what affect the environmental health. The environmental
health is under severe risk for natural calamities in low income countries. According to
the EPI’s 2014 report, most of the low income countries have been ranked in lower spots
with their poor scores in environmental health (EPI, 2014). The agro-ecosystems and food
security in these countries are facing huge challenge from climate change in consequence.

Biodiversity losses. The conventional agriculture practice affects the biodiversity in sev-
eral ways. The existence of natural biodiversity are limited due to the management of
agricultural landscapes. Deforestation, using pesticides and other chemicals increase the
losses of natural biodiversity as animals, birds, bees and other useful insects lose their
place and die of chemicals used for crop production. The traditional crop species are also
at risk of biodiversity loss. A few modern species are being planted instead of large vari-
eties of traditional to gain more yields. This practice leads to the potential losses to the
outbreaks of diseases and pests.

(b) Structural. The structural adjustment in economics and poor agriculture structure
are the major obstacles for sustainability in low income countries. The World Bank and
IMF prescribed this structural adjustment for achieving the higher growth rates. The gov-
ernment intervention on agricultural sector and agricultural market is reduced by this ad-
justment. Though the policy reforms under the adjustment have brought positive benefits
for the farmers in trade with cash crops, the reforms have affected negatively the small-
holders (Adesina, 2010). As the input subsidies have been taken off under the policy re-
forms, the production cost of staple foods has increased. Competition with low cost and

6
imported foods and limited access to credits along with the removal of subsidies have
worsened the conditions for the dwellers.

The market and infrastructure in the low income countries are poorly developed. The
transportation costs are high due to less developed infrastructure. Poorly developed mar-
ket structure causes high transaction costs for farmers to access inputs. High tariff and
non-tariff barrier reduce the intra-regional trade flows. As a result, the price of staple
foods remain low. Intra-regional trade can be an opportunity to gain economies of scale
largely in marketing. It can also help to reduce the price collapse for agricultural products.

Low levels of human capacity and farmers’ lack of education and training about farming
constraint the agricultural growth. As a result, the efficient use of available resources is
not found. The farmers also fail to access to the information about the market prices.

(c) Policy factors. Poor policies along with lack of political will block the sustainability
in agriculture. The agricultural sectors in the low income countries are getting less prior-
ity. Poor agriculture structure does not attract the foreign investment. Moreover, the gov-
ernments are also unlikely to encourage the foreign investment in agricultural sector.
Tight domestic budget allows inadequate investment on agricultural research. Donors
have shifted their emphasis to social sector what causes the decline the share in agricul-
ture, especially in African countries (Adesina, 2010).

Subsidy to biofuels makes it less costly to produce. It puts the food production in compe-
tition for land. Using more land for producing biofuels instead of food crops causes to
shortage of food and to drive up the price, what is risky for food security. Moreover,
Biofuels replace the use of fossil fuels what has negative impact on environment as there
is highly potential to increase carbon dioxide emission.

Food security is a key aspect of sustainable agriculture. Most of the low income countries
emphasize on the increase of yield production without considering the food security.
Therefore, even a country achieves sufficient foods to meet the demand, people of this
country fail to access to the food. Due to achieve food sufficiency, the genetically modi-
fied (GM) crops are used in many countries. But there are strong arguments about using
GM crops as fewer evidences of higher production have been found. Meanwhile, it allows
the large corporations to control the agriculture what leads to a wider socio-economic
disparities.

7
Trade policies also affected the food production. During the global food crisis, the ex-
porting countries restrict export by imposing export tariff or quotas to secure supply. On
the other hand, the importing countries reduce the tariff. In that case, the producers from
both countries are hurt.

4.2. Positive Trends

Despite of challenges, some positive trends in agricultural sectors are being observed at
present. These trends influence the transformation of agriculture to sustainability by mit-
igating the obstacles. The taken policies for betterment of the agricultural producers’
show a strong commitment to the agricultural and rural development.

(i) Renewed support by implying good governance

Corruption is a major obstruction for the sustainable development. A good governance

can reduce the corruption and strengthen the democracy. Implication of a good govern-
ance helps to improve the political will to agricultural development. For example, the
political will of policy makers and donors is changing towards the agricultural develop-
ment in the African countries due to improvement of governance (Adesina, 2010).

The development of the public-private partnership in effective way has come underway
as agricultural and rural development are focused. The subsidy system has been modified
from the traditional system and is being monitored to evaluate the impact. The govern-
ments of the African countries have moved away from the traditional approach of subsidy.
The farmers are getting vouchers as the smart subsidy. In addition, support from World
Bank and AGRA has strengthened this subsidy program. As a result, a rapid agricultural
productivity has been experienced in that region. Food security along with economic
growth are ensured as increased food production has declined the food price inflation.

(ii) Macroeconomic policy improvement & Debt reduction

Improved macroeconomic policies drive the agricultural growth rates to increase

(Binswanger-Mkhize, et. al, 2009). These improved policies help to decline the inflation
and to reduce the government expenditures. In consequence, the fiscal deficits are reduced
what relief the government from accumulating more debt. The good macroeconomic and
fiscal policies together with budget reforms have improved the debt situation in the low
income countries, particularly in Africa. A total debt reduction from $279 billion in 2000
to $260 billion in 2007 was seen in Africa (Adesina, 2010). In addition, the improved

8
agricultural policies have led to the agricultural recovery in this region (Binswanger-
Mkhize, et. al, 2009).

(iii) Increase in per capita income growth

The improved policies also contribute to increase of the per capita income growth. Ac-
cording to Binswanger-Mkhize, et al (2009), a higher per capita income growth rate than
that of developing countries was obtained by some African countries during 1994-2004.
This accelerated growth led to increase in food production by increasing the effective
demand. As a result, the agricultural growth was obtained in these fastest-growing coun-
tries (Adesina, 2010).

(iv) Improved agricultural & trade policies and reformation of agricultural system

Increase in food production was emphasized under the conventional agriculture practices
in most of the low income countries. The governments are considering the sustainable
agriculture at present. It is noticed that, the agricultural policies have been changed and
reformed in these countries. Reduction of taxation in the agricultural sector, integrated
farming, assuring the efficient use common properties and removing the antifarm and
antitrade policy biases are some measurement of the improved agricultural policies. It is
found that the African governments reformed their policies by removing the antifarm and
antitrade policies what had worsened the condition in the late 1960s and 1970s (Adesina,
2010). The level of taxation on agricultural product was reduced. Meanwhile, integrated
farming is becoming popular in Asia what reduces the risk of failure to production. The
crops and livestock are produced in combined way. As a result, almost all wastes are used
as resources. Establishment of grain or seed banks has provided the food security to the
farmers. Poor communities in rural areas have shortage of modern storage technology.
This type of bank is a mutual support for the people of a certain area.

(v) Land distribution and sustainable use of land

Land distribution is one of the major successful trends that leads to sustainability in agri-
culture. It has provided benefits to the smallholders. Poor and landless people in the low
income countries have got opportunities to produce their own food. As a result, the food
insecurity has been reduced. Moreover, it has decreased the pressure from forest. Defor-
estation for arable land is one of the major problems in the low income countries. As poor
people and dwellers are getting land, the rate of deforestation is decreasing what contrib-
utes to reduction of carbon dioxide emission. Furthermore, carbon trade market has

9
brought a good opportunity for the low income countries to achieve aid as the market size
is of several billion dollars (Adesina, 2010). As sustainable intensification use of lands
reduce the deforestation and degradation, the countries can mitigate a huge amount of
carbon losses (FAO, 2007). This has been showed in the following table:

Table 1: Potential carbon mitigation from land-use change, 2003–2012 (million tons of
carbon)

Region Avoided De- Sustainable Forest Restora- Total

forestaton Agriculture tion

Africa 167.8 69.7 41.7 279.2

Asia 300.5 227.3 96.2 634

Latin America 1097.3 93.1 177.9 1368.3

Total 1565.6 390.1 315.8 2271.5

Source: FAO (2007)

5. Empirical Analysis

Modelling Approach and Data

An empirical study was done to find out economic and ecological consequences of agri-
cultural intensification at the farm household level (Woelcke, 2006). The study was con-
ducted in Uganda. The specific constraints for the farm households to adopt ecologically
sustainable farming practices, the optimal levels of adoption of these practices and their
impacts on household income and natural resources are also explained in this study.

Since agricultural producers are different due to their wealth, economic opportunities and
resource endowments, then the identification of the farm households should be included
in the modelling approach for the investigation of their response to the policy changes.
The data was collected from two household surveys one after another, to identify the
representative household. Four types of representative household were found by perform-
ing the PCA and subsequent CA: subsistence farm households (30% of all households),
semi-subsistence farm households (53%), commercial farm households (10%) and inno-
vative farm households (7%) (Woelcke, 2006). The farmers, under the type of innovative
farm households, were found to have several agricultural training courses. They adopted

10
highest number of technologies within the last 10 years. The characteristics along with
the score of each group are listed in the Table 2.

Table 2: Selected Characteristics of Identified Farm Household Groups

Subsistence Semi-sub- Commer- Innovative

sistence cial

Number of different 0.3 0.7 1.0 4.2

types of agricultural
training

Value of agricultural 4,358 5,261 9,739 5,778

equipment per person in-
volved in farming (Ush)

Total value of agricul- 455 833 1,635 1,066

tural production in 2000
(103 Ush)

Value of agricultural pro- 80 80 99 91

duction per hectare (103
Ush)

Maize yield per season 933 1,150 1,930 1,875

(kg/ha)

Quantity sold on total 23 52 64 35

production (%)

Number of technologies 5 5 6 7
adopted in last 10 years

Note: Ush = Uganda Shilling

Source: Woelcke (2006)

The commercial farm households achieved the highest mean values for several variables,
such as, value of agricultural equipment per person involved in farming, total value of
agricultural production, value of agricultural production per hectare, maize yield per sea-
son and quantity sold on total production. These values reveal that the commercial farm
households had higher productivity levels, high degree of market orientation along with

11
high value of human and physical asset. On the other hand, subsistence and semi-subsist-
ence farm households scored relatively low mean values for the same variables. This val-
ues indicate to the lower productivity, lower capability of innovativeness, low degree of
market orientation as well as low level of human and physical asset.

The bio-economic models were used to determine the optimal level of technology adop-
tion and their impact on income and natural resource conditions. These models consisted
of influential socio-economic factors for farmers’ objectives and constraints, biophysical
factors and the impacts of land management practice (Woelcke, 2006). The modelling
approach was constructed with a mathematical programming model, artificial neutral net-
work as yield estimator and nutrient balances as sustainability indicator. The results of
yield estimators and the calculation of nutrient balances were added in the programming
model.

Crop yields were estimated from CIAT farm-trial data by using the Artificial Neutral
Network (ANN). The multi-layer perception model was used as the ANN structure among
many existing neutral networks in this model as it has ability to calculate the error and
distribute backward through the system. There are some good reasons to use ANN over
deterministic simulation models. The enormous data requirement and limited capacity for
estimating the impact of several different technologies simultaneously are lacking of de-
terministic models. In addition, the ANN have ability to capture nonlinear relationship.
The ANN attained higher modelling accuracy for this model.

The nutrient balances were used as sustainability indicator for land management practices
and new technologies. Their comprehensiveness of evaluating the biophysical impacts of
land management and importance as a determinant of yield levels made nutrient balances
as a good choice to be sustainability indicator. Though the quantification of the feedback
effects of nutrient losses on the development of the yields is very hard, nutrient balances
can indicate to the future soil productivity considering the total nutrient stock in the soil.
A concept developed by Wortmann et al (1998) was implied to calculate the adjustment
of the nutrient balances to the household for collected data. Several factors were captured
in the programming matrix as nutrient-removing and nutrient-adding factors. The rainfall
factor, crop factor, erosion management factor and soil factor were considered as the nu-
trient-removing factors. Meanwhile, inorganic fertilizer, farmyard manure, green manure
and atmospheric deposition were counted as the nutrient-adding factors.

12
The mathematical programming model was constructed to compute the optimal produc-
tion and households’ consumption plans for four representative household types. The
consumption plans of households were based on the lexicographic utility concept. The
model consisted of 507 variables and 201 constraints for each type. The programming
matrix captured the following activities: crop production, livestock production, consump-
tion and selling of agricultural product, permanent off-farm employment, hiring in and
out temporary labour, labour exchange, labour transfer, investment activities and hiring
tractor and credit application.

Crop production included 12 different crops, 6 soils classes, 2 seasons, different cropping
methods and different technology levels. The livestock production considered the local
and exotic cows in zero-grazing units. The model allowed the options of selling the total
produced amount of a specific crop, using this amount for consumption or choosing the
combination of both under consumption and selling agricultural products. Hiring in and
out of temporary labour indicated to the control costs of hiring in labour, as there is a
price difference between these activities. Transfer activity confirmed the labour for pro-
duction activities, while an alternative form of labour acquisition to overcome seasonal
labour constrained was ensured by labour exchange. The data on investment costs and
maintenance costs along with technical details were accounted under the investment ac-
tivity and hiring tractor. Credit application comprised the micro-finance schemes pro-
vided by the commercial banks and the micro-finance institutions. This activity differen-
tiated the credit for investment as well as the annual production costs for both schemes.

Six groups of main constrains were also incorporated into the programming matrix. The
available land resources were divided into six soil classes under the total land area con-
strain. Crop rotation constrain confirmed the cultivation of a specific crop with a certain
percentage of the total land area. Labour supply was divided into 2 groups by sex and 3
groups by ages. The nutrient requirement for the household members were calculated by
considering the nutrient requirement of household members and consumption prefer-
ences. The capital constrains indicated to the capital required for investment and for an-
nual operational production costs. Nutrient balances were used as the sustainability indi-
cator as mentioned earlier.

The programming model selected the cluster centre for four groups. The regression anal-
yses were conducted to check the consistency of the model. The estimated values for R2

13
were between 0.89 and 0.99 for all groups what indicated to the sufficient association
between real world data and model results (Woelcke, 2006).

Results

The goal of achieving the nonnegative nutrient balances was difficult under the existing
market conditions. The land management practices led to high negative nutrient balances.
Higher yields and higher nutrient losses from fields pushed the commercial farm house-
hold to the more negative position than other groups. Existence of feasibility was not
found in any groups for sustainability constrains. In most cases, the relaxation of technical
constraints and the relaxation of capital constraints did not help to achieve the ecological
sustainability. The introduction of new technologies and credit were effective only for the
commercial farm households to gain nonnegative nutrient balances.

A decrease in fertilizer prices from the existing price level provided a favourable condi-
tion for the semi-subsistence farm households group to attain the nonnegative nutrient
balances. But, it would not lead to the economic harmonization and ecological goals.
Household welfare and ecological sustainability could be achieved by adopting technol-
ogy along with reducing market distortion. Shortage of capital and farm labour were cited
as the obstacles for adopting new technologies. Improved input-output price relations
along with improved access to credit and labour exchange significantly improved the
household income and nutrient balances. Farm households’ access to credit for invest-
ment and operating costs increased the economic indicators to a significant extent
(Woelcke, 2006).

Conclusion with Policy Implication

The sustainable agriculture is quite different from the conventional agriculture practices.
The rising food production is the main priority in the conventional practices, while sus-
tainable agriculture confirms the food security and better use of existing resources and
technologies along with increasing food production by considering the environmental ef-
fect. It is a huge challenge to maintain the consistency of sustainable agriculture in the
low income countries. Though several policy reforms and changes in agricultural struc-
ture are showing the interest of these countries to sustainability, yet these countries are
falling short to achieve the goal. Implication of some additional policies besides the pol-
icies already taken for attaining the sustainability would be effective.

14
First, the completion of market reforms is highly encouraged for sustainability. It is es-
sential for creating the business environment and increasing marketing efficiency what
lead to agricultural trade. Moreover, it can significantly improve the price relations for
farmers. Second, it is important to remove the information asymmetries about the market
information. Smallholders are found as sufferer for information asymmetries. Using the
social network besides the radio and television programs would be effective to reduce the
asymmetries. Third, the easy access to the credit for farmers is essential. In many low
income countries, the small-scale farmers are facing this problem because of high access
to credit in these countries. Easy access to credit will help the farmers to reduce capital
constrains. Improvement in operating capacity of microfinance should be prioritized.
Fourth, more research works on agricultural sector should be emphasized. The public
investment into agricultural research is insufficient in the low income countries. The in-
vestment into research will help in adopting better technologies along with upgrading the
existing technologies. Moreover, agricultural training for farmers will increase their in-
novative capacity on farming. Lastly, land redistribution and integrated farming should
be emphasized. Distribution of land to the poor people promotes the self-employment
what reduces the food insecurity. On the other hand, farmers can increase food production
with less resources by integrated farming. These features reduce the risk of deforestation.

15
References

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Position Paper

 Poorly developed infrastructure and agricultural structure is one of the major obstacles
to attain sustainability in agriculture in low income countries.

 Environmental issues, such as deforestation, land degradation, water deficiency and

climate change, are major concern for achieving sustainable agriculture in low income
countries.

 Emphasizing on increasing of food production to meet the demand without prioritizing

the food security has made the condition difficult, especially in Asia and the Pacific.

 The lack of public investment on agricultural sector and the apathy to encourage pri-
vate investors do not help to get expected goal.

 Reformation of several agricultural as well as trade policies recently in low income

countries has been being paid off with great success.

 Lowering the credit access for small-scale farmers and providing agricultural training
and education to them would help to improve the condition.