Master’s Thesis Proposal:

Crop Diversification in ASEAN countries:

A Panel Data Analysis

Prepared by : Clara Joan Joachim

Supervised by : Prof An Donghwan

Committee Members:
Prof Lee Jongwook Agriculture and Resource Economics
Prof Kim Taeyoon Department of Agricultural Economics and Rural Development

4PM, Thursday, 27th April 2023

 CONTEN
T
1. Introduction
2. Literature Review
3. Problem Statement
4. Research Objectives and
Questions
5. Methodology
6. Implication of Research
7. Reference
 INTRODUCTION: Why Diversifying crop?
Crop Diversification
• the practice of growing a variety of crops on a single farm or agricultural area -
opposed to relying on a single crop type
• Ex: crop rotation, polycultures, agroforestry

1. Poverty reduction 4. Climate change adaptation

• Cost‐effective and easier ways of reducing the effect • Reduces needs of nitrogen fertilizer consequently less GHG emissions
of uncertainties • Improves tolerance to drought and water‐logging
• Adaptation strategy for smallholder farmers under climate change
• Increases yield stability
2. Environmental sustainability • Can serve as insurance against rainfall variability as different crops
• Avoids soil exploitation are affected differently by climate events
• Reduces soil erosion
• Provides habitat
• Avoids forest clearing 5. Economic development
• Stabilises farming income
• Increases choice of farm practices
3. Food Security • Generates employment opportunities
• Diverse production contributes to more diverse household
diets
• Effect on food availability and nutrition
Sources: Feliciano (2018)
LITERATURE REVIEW : What are factors that contributes to crop
diversification?
Research title Authors/s & year Content

Trend, pattern and determinants of

Mithiya, Mandal & Datta
cropdiversification of smallholders in West
Bengal: A district-wise panel data analysis
Determinants of crop diversification among
Mozambican smallholders: Evidence from
household panel data
Determinants of crop diversification in
Bangladesh: An econometric analysis
Determinants of farmer’s agricultural
diversification: The case of Cambodia
Determinants of Farmers’ Land Use Decision-
Making: Comparative Evidence From
Thailand and Vietnam
Socioeconomic Determinants of Decisions
and Degree of Crop Diversification Among
Smallholder Rice Producers in Côte d’Ivoire
Factors Influencing Smallholder Crop
Diversification: A Case Study of Manicaland
and Masvingo Provinces in Zimbabwe
• As urban population increase, there is decrease of diversification. (-)
(2018) • Rainfall contributes to crop diversification. (+)
Turner (2014) • Increase of landsize and household size contributes to a more diversify crop. (+)
• Existance of irrigation system makes farming to concentrate on traditional rice cultivation. (-)
Azad (2022)
• Additional plot for farming increases diversification yet decline after 0.024 units. (+, -)
• The paddy relative price are significantly negative for the diversification selection. (-)
Seng (2014) • Access of irrigation has positive impact towards both diversification decision and diversification
intensity. (+)
Nguyen et al. (2017) • Irrigated land share has negative impact in Ha Tinh but positive in Ubon Ratchathani.
• Being male, owning agricultural equipment as well as having membership in farm group increases
Gniza & Loa (2023) diversification. (+)
• Increases of distance of plot from residence reduces possibility of growing other crops. (-)
• Soil fertility negatively significant affects crop diversification. (-)
Guveya (2016)
• Off-farm employment negatively affect crop diversification. (-)
LITERATURE REVIEW : What are factors that contributes to crop
diversification?
Research title
The determinants and extent of crop
diversifications among smallholder farmers: A
case study in of Southern Province Zambia
How diversified is cropping in Malawi?
Patterns, determinants and policy implications
Crop diversification in South Asia: A Panel
Regression Approach
Determinants of agricultural diversification in
Brazil: A spatial econometric analysis
Crop diversification and its determinants:
State-wise Analysis (India)
Crop diversification in Thailand: Status,
determinants, and effects on income and use of
inputs
Pattern, Trend and Determinants of Crop
Diversification: Empirical evidence from
smallholders in Eastern Ethiopia
Determinants of crop diversification in rice-
dominated Sri Lankan agricultural system
Authors/s & year Content
• Increase in the size of landholding, fertilizer and machinery better enable a farmer to participate in
Sihoongwe et al (2014)
diversification. (+)
Kankwamba, Kadzamira As landholding size continued to increase steadily above 1.5 ha, the level of crop diversification declined
& Pauw (2016) suggesting that diversification is more of a smallholder farmer practices. (+, -)
Singh et al (2022) Merchandize index showed negative relation with crop diversification. (-)
• Less technology (storage structure) have greater agricultural diversification. (-)
Parre & Chagas (2021) • Improvement in income stimulate adoption of crop diversification reflecting a more diversified
consumption of food by consumer. (+)
Kaur, Singh, Raju • Market encourages farmers to get rid of subsistence type of production system. (-)
(2015) • Road density has positive impact on agricultural diversity. (+)
Kasem & B.Thapa • Diversified farmers have more contacts with extension agents and attended more training programs (+)
(2011) • Monocropping is supported by the reason of not having adequate labor for growing several crops. (+)
• There is negative relation between number of extension contacts per year – concentrated on enhancing
Mesfin (2011)
farmers’ productivity and profitability which favors specialization. (-)
• Land that prone to water lodging due to soil type and drainage are ideal for flooded rice cultivation. (-)
Burchfield & Poterie
• Acces to agrowell attribute to farmers who regularly cultivate other field crops than rice. Agrowell
(2018)
allows farmers to pump groundwater to irrigate small field crops. (+)
RESEARCH GAP

1. Existing literatures are focusing on smallholders level, state or province

level and very less at the assestment for a broader perspective - on a
national level, or even more to a comparison study between countries.

2. Existing literatures consisted of cross-sectional data analysis and very

less on a huge panel data.
BACKGROUND OF ASEAN COUNTRIES
• Economic growth of GDP at rate more than 5% (2000-
2015) driven by manufacture and services sector.

• Excluding Singapore and Brunei, agriculture has long

been an important income sector for people in the rest
of 8-ASEAN countries.

• However, agriculture sector grew slowly at rate 3%

annually and faced decline of GDP share, 15% to 11%
(2000-2015) accompanied by the factors of diminishing
labor force (Pratap et al., 2022)

• GNI per capita:

Upper Mid-income Lower Mid-income:
($4,046 - $12,695) ($1,036 - $4,045)
• Malaysia • Cambodia
• Thailand • Laos
• Philippines • Myanmar
• Indonesia
• Vietnam
 PROBLEM
• STATEMENT
Since the 1994 , most public irrigation systems in Asia’s humid tropics were primarily for rice production
(Taylor)
constrained for agricultural diversification. Rice dominates cropping system in lower income countries: ¾ of
total cropped area in Cambodia, 50-56% in Lao PDR, Thailand and Vietnam, 1/3 in Indonesia and Philippines,
and 10% in Malaysia. While plantation crops are significant in higher income country: oil palm occupies 72%
total cropped area in Malaysia and Indonesia about 20% after rice. (FAOSTAT, 2016)

• Diversification contributes to a fast growth of agriculture in lower income country. Contrarily, growth of
agriculture has been slowed in higher income country, driven by price increases, mainly on export-oriented
commercial crops (oil palm, rubber and coconut) alongside the expansion area under these crops (Pratap et al.,
2022).

• The countries’ agriculture is threatened by sustainability and resilience of crop production in the face of climate
change, productivity and food security. Production diversification was proposed to be a potential strategy in
mitigating the issues in this region (ASEAN framework, 2021)

• However, there are still limited research been done in the ASEAN demographic on evidence of crop
diversification determinants. Therefore, further research is needed in order to understand the drivers of this
strategy. To address this gap, this study propose to investigate the determinants of crop diversification in
selected ASEAN countries.
RESEARCH OBJECTIVES & QUESTIONS
Objective
With a panel data of 30 years, the study try to examine various determinant
variables such as socioeconomics, agronomics, technology, productivity, export,
climate and consumption demand as factors that could influence crop
diversification in 8-ASEAN countries.

Question
What are the driving factors of crop diversification in 8-ASEAN countries?
METHODOLOGY
Data and Variables:
Research will depend on secondary data for the span of 30 years for 8-ASEAN countries.
Sources Data Year
1. Area of harvested crops
2. Yield of crops
3. Arable land
FAOSTAT 4. Cropland 1991 - 2020
5. Population
6. Area equipped for Irrigation

International Fertilizer Association

Fertilizer consumption 1991 - 2020
(IFA)
1991 - 2020
UN Comtrade Export of crops commodities

1991 - 2020
NASA Power Data Access Viewer Temperature, Rainfall, Root Zone Moisture

1991 - 2020
World bank Per capita GNI, Rate of urbanization
Specification variables and units:
Factors Indicators Unit Description
Population ‘000 person
Socioeconomics Arable land Ha/person Hectarage of arable land per person
factors Cropland share from total agriculture
Cropland Percentage land
Soil/agronomic factor Root zone moisture Percentage Surface to 100cm below
Total N, P2O5, K2O nutrients from
Fertilizer ‘000 metric tones inorganic fertilizers and N from organic
Technology factor fertilizers applied to soils
Irrigation ‘0000 Ha Total area equipped for irrigation
Food crop yield index Percentage
Productivity factor
Non-food crop yield index Percentage
Export factor Crop Export index  USD
Temperature (Maximum) degree Celsius
Climate factors Temperature (Minimum) degree Celsius
Rainfall Millimeter Percipitation milimeter per day

  Urbanization Percentage
Consumption Factors Per capita Gross National Income
USD
(GNI)
METHODOLOGY: Measurement of key variables
1. Crop Diversification Index (CDI)
Herfindahl index (HI)
= Land share of the i-th crop in total cropped area
N = Total number of crops cultivated

Simpson Diversity index

(SDI)

= Land share of of i-th crop in total cropped area

N = Total number of crops cultivated
METHODOLOGY: Measurement of key variables

Crop classification:

1. Fruits and nuts Category Range of CDI

2. Pulses (legumes)
3. Roots and Tubers
4. Oil crops Low 0.00 – 0.30
5. Fibres
6. Vegetables Medium 0.31 – 0.60
7. Citrus
8. Cereals
High 0.61 – 1.00
9. Sugar crops
10.Stimulant, spices and aromatic crops
11. Rubber (Anuja et al., 2022)
12.Tobacco
METHODOLOGY: Measurement of key variables
2. Crop Yield Index

Production Effeciency
𝑛
𝑌𝑖
P.F.𝑖  =  ∑ ×100
𝑖=0 𝑃 .𝑌 .𝑖 Country’s actual yield of crop i-th
= Country’s potential yield of crop i-th
= Country’s area of crop i-th
Crop yield index

Crop yield index

METHODOLOGY: Measurement of key variables
3. Crop Export Index
Exported crops:

Crop Export Index 1. Vegetables, roots and tubers

2. Fruits and nuts
3. Oil seeds and oleaginous fruit
CEI 4. Cereals
5. Coffee, tea, mate and spices
6. Sugars and sugar confectionery
7. Soya-bean oils
8. Palm oil
9. Groundnuts oil
10. Rubber
11. Tobacco
Total export value of all crops exported 12. Cocoa
13. Fibre
METHODOLOGY : Model Specification
The model can be described as follow:

CDI = f(POP, AL, CL, FER, IR, MAXT, MINT, RZM, RAIN, URB, GNI, FC, NFC, EXP)
…………(1)

Based on the production function, empirical model is being specify for the variables so
that all independent variables able to shows its impact to CDI outcomes.
= ………………….(2)
METHODOLOGY : Model Specification
Where;
= Population = Rainfall
= Arable land = Urbanization
= Crop land = Gross National Income
= Fertiliser usage = Food crop yield
= Irrigation = Nonfood crop yield
= Max temperature = Crop Export
= Min Temperature = Error term
= Root Zone Moisture = country and = year (1991-2020)
Model test were being run on STATA
• Brusch- Pagan test: Pooled OLS vs Random Effect test
• Hausman test: Fixed Effect test vs Random Effect test
Fixed Effect Model showed as the most optimum model specification.
• Able to control on time-invariant unobserved heterogeneity
• Able to estimate the within-individual variation on outcomes
variable
IMPLICATION OF
RESEARCH
1. There is no such existing study on determinants of crop diversification at national
level in Southeast Asian countries as far. Therefore, the proposed study will offer a
new literature with comparisional of crop diversification factors between ASEAN
developing countries. The study will overview of crop diversification within the
span of 30 years, offering a rich panel data instead of cross-sectional data.

2. Identification of determinants helps to promote sustainable agriculture practices,

increase productivity and enhance food security in ASEAN countries.

3. Discussions on these research could be used as a guideline for respective countries

in nation’s policy making, as well as reference for other developing countries.
 REFERENC
ES
Kankwamba, H., Kadzamira, M., & Pauw, K. (2018). How diversified is cropping in Malawi? Patterns, determinants and policy implications. Food security, 10(2), 323-338.
Singh, P., Adhale, P., Guleria, A., Bhoi, P. B., Bhoi, A. K., Bacco, M., & Barsocchi, P. (2022). Crop Diversification in South Asia: A Panel Regression Approach. Sustainability, 14(15),
9363.
Parré, J. L., & Chagas, A. L. S. (2022). Determinants of agricultural diversification in Brazil: a spatial econometric analysis. Letters in Spatial and Resource Sciences, 15(2), 173-195.
Kaur, A. P., Singh, J., & Raju, S. S. (2015). Crop Diversification and its Determinants: State-Wise Analysis. The Indian Economic Journal, 62(4), 1301-1312.
Kasem, S., & Thapa, G. B. (2011). Crop diversification in Thailand: Status, determinants, and effects on income and use of inputs. Land Use Policy, 28(3), 618-628.
Mesfin, W., Fufa, B., & Haji, J. (2011). Pattern, trend and determinants of crop diversification: empirical evidence from smallholders in eastern Ethiopia. Journal of Economics and
Sustainable Development, 2(8), 78-89.
Sichoongwe, K., Mapemba, L., Ng'ong'ola, D., & Tembo, G. (2014). The determinants and extent of crop diversification among smallholder farmers: A case study of Southern Province,
Zambia (Vol. 5). Intl Food Policy Res Inst.
Burchfield, E. K., & de la Poterie, A. T. (2018). Determinants of crop diversification in rice-dominated Sri Lankan agricultural systems. Journal of rural studies, 61, 206-215.
Mithiya, D., Mandal, K., & Datta, L. (2018). Trend, pattern and determinants of crop diversification of small holders in West Bengal: A district-wise panel data analysis. Journal of
Development and Agricultural Economics, 10(4), 110-119.
Azad, A. K. (2021). Determinants of Crop Diversification in Bangladesh: An Econometric Analysis. Asia-Pacific Journal of Rural Development, 31(2), 195-217.
Turner, E. C. (2014). Determinants of crop diversification among Mozambican smallholders: Evidence from household panel data. Michigan State University.
Seng, K. (2014). Determinants of Farmers' Agricultural Diversification: The Case of Cambodia. Asian Journal of Agriculture and Rural Development, 4(8), 414-428.
Nguyen, T. T., Nguyen, L. D., Lippe, R. S., & Grote, U. (2017). Determinants of farmers’ land use decision-making: Comparative evidence from Thailand and Vietnam. World
Development, 89, 199-213.
Gniza, D. I., & Loa, R. L. B. (2023). Socioeconomic Determinants of Decisions and Degree of Crop Diversification Among Smallholder Rice Producers in Côte d’Ivoire. American
Journal of Multidisciplinary Research and Innovation, 2(1), 65-73.
Dube, L., & Guveya, E. (2016). Factors influencing smallholder crop diversification: A case study of Manicaland and Masvingo Provinces in Zimbabwe. International Journal of Regional
Development, 3(2), 1-25.
Feliciano, D. (2019). A review on the contribution of crop diversification to Sustainable Development Goal 1 “No poverty” in different world regions. Sustainable development, 27(4),
795-808.
Birthal, P. S., Joshi, P. K., Roy, D., & Pandey, G. (2022). Transformation and sources of growth in Southeast Asian agriculture. Journal of Southeast Asian Economies (JSEAE), 39(2), 171-
197.
Taylor, D. C. (1994). Agricultural diversification: an overview and challenges in ASEAN in the 1990s. ASEAN Economic Bulletin, 264-279.
ASEAN Framework, Retrieved from : https://asean.org/wp-content/uploads/2021/12/FAFD-27.-ASEAN-Framework.-PED-Brunei-D-adopted-by-the-SOM-AMAF-on-20.3.2021.pdf
Anuja, A. R., Shivaswamy, G. P., Ray, M., & Singh, K. N. (2022). Pattern of crop diversification and its implications on undernutrition in India. Current Science, 122(10), 1154.
APPENDIX : Descriptive
Statistics
Crop Diversification
Mean
0.5555
Median
0.5850
Max
0.7375
Min
0.2432
Std Dev
0.1313
Skewness
-0.7136
Kurtosis
-0.4314
Index
Population 69838.3515 54761.5315 271857.9700 4437.2250 68077.2756 1.5730 1.7360
Arable Land (ha/person) 0.1540 0.1249 0.3996 0.0029 0.0916 0.3136 -1.1069
Cropland (%) 85.9345 89.8956 97.6332 51.8652 12.3566 -1.0666 0.2514
Fertilizer (kg/ha) 1539640.6772 1114223.6318 8284520.9733 31814.9187 1629637.5458 1.8023 3.9388
Irrigation 1795.3762 721.0000 6415.0000 65.6055 2032.3859 1.0682 -0.1849
Temperature (Max) 36.4179 37.4370 42.5300 31.2328 3.1667 -0.2276 -1.4079

Temperature (Min) 14.5925 14.2697 22.3521 1.7794 4.9406 -0.2074 -0.9706

Root Zone Moisture (%) 0.6954 0.6670 0.9138 0.5155 0.1098 0.3308 -1.0692
Rainfall (mm) 4.8196 4.5611 9.4688 0.9195 1.7810 0.0916 -0.4767
Urbanization (%) 32.5859 29.8580 56.6410 15.7820 10.3603 0.4639 -0.8520

Per Capita GNI 6570.4661 4760.0000 28090.0000 370.0000 5704.8272 1.5680 2.4041
Food Crop Yield Index
78.3601 80.4295 98.8988 42.0497 12.7365 -0.5235 -0.4937
(%)
Nonfood Crop Yield
76.1215 80.6986 98.8911 36.9239 16.0753 -0.6921 -0.5289
Index (%)
Crop Export Index (USD) 2739810880 941222926.4 16789763251 206284.9974 3864331510 1.6888 1.7885
APPENDIX : Crop Diversification in ASEAN
countries
Thank You. 감사합니다 .