An economic analysis of ecological agricultural technologies among peasant farmers in Honduras

ELSEVIER Ecological Economics 12 (1995) 237-248

ECOLOGICAL ECONOMICS

Analysis

An economic analysis of ecological agricultural technologies among peasant farmers in Honduras

Christopher Mausolff *, Stephen Farber Graduate School of Public and International Affairs, UniL,ersity of Pittsburgh, Pittsburgh, PA 15260, USA

Received 5 April 1994; accepted 15 August 1994

Abstract

The economic costs and benefits of chemical and low-purchased-input ecological technologies are compared in two Honduran rural development projects. Surveys of 20 farmers in each project indicate that both approaches have tripled average corn yields from a baseline of roughly 700 kg per hectare to the present level of 2000 kg per hectare. However, the farmers utilizing the ecological technologies have achieved this yield increase with one-fifth the chemical fertilizer, and substantially lower overall costs. The study suggests that cover cropping with velvet bean (Macuna pruriens) is a promising ecological farming practice. Based on statistical analysis of the survey data, this nitrogen-fixing crop reduced costs by 22%.

Keywords: Agriculture; Cost-benefit analysis; Honduras; Sustainable development

1. Introduct ion

The conventional wisdom is that the best way to improve the productivity of resource poor farmers is through the use of high-yielding variety seeds and chemical fertilizer (Hayami and Rut- tan, 1985; Lopez-Pereira et al., 1990; Biggs and Farrington, 1991). However, there is evidence among Honduran peasant farmers that the resulting yield increases may not be sufficient to pay for these inputs, t On the other hand, a number of innovat ive n o n - g o v e r n m e n t a l o rgan iza t ions (NGOs) claim to be increasing farmer yields without costly green revolution technology. These NGOs rely on alternative, organic, and ecologi-

* Corresponding author.

cally-based technologies such as cover crops, live barriers, and minimum tillage to improve the soil and raise productivity. 2

l A survey of Honduran NGOs providing agricultural ex- tension services to peasant farmers (Kaimowitz et al., 1992) found that most had stopped providing credit for chemical inputs because of indebtedness and low repayment rates. Similarly, a detailed, long-term case study in Western Hon- duras (Felber and Foletti, 1989) found that green revolution corn technology offered a lower economic return than traditional growing practices.

2 Cover crops, or green manures, are leguminous plants that provide green organic matter, shade, and often nitrogen to the soil. The live barriers used include fast-growing grasses with deep root systems (napier, vetever, and king grasses). Minimum tillage is a soil conservation practice in which the narrow strips are plowed for crops and the remainder is left as unplowed turf.

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238 C. Mausolff, S. Farber / Ecological Economics 12 (1995) 237-248

A common criticism of these alternative approaches is that they do not provide as good an economic return as green revolution methods and, therefore, the promotion of these methods de- prives peasant farmers of the best available technology. An example of this criticism is the following statement by Biggs and Farrington (1991, p. 67) from their comprehensive review of agricultural research for the rural poor:

Many NGOs are attracted to the concept of sustainable agricultural development. Therefore, they par- ticipate in networks oriented variously toward "ecological agriculture" or "low-external-input agriculture" ...However, the presentation of these technologies in some NGO newsletters tends to be populist, underestimating both the technical skills and overall labor inputs required. Very few studies have drawn together and evaluated field experience in using techniques of this kind. Such efforts need to be expanded. In their absence, NGOs may them- selves take technology routes that, although superfi- cially appealing, do not live up to their promise.

A similar concern is raised by Michael Foley (1989) in his review of Gene Wilken's (1987) book Good Farmers:

Without economic analysis, the book provides the reader with no idea about how long such labor intensive, time-consuming methods will persist in the face of rising household costs and increasing competition.

There is considerable interest in the economic viability of these alternative agricultural technologies. This study addresses several empirical questions associated with the new ecologically-based technologies being promoted by Latin American NGOs. First, are these technologies capable of increasing yields above those of conventional green revolution technologies? Second, what is the relation between costs and benefits of the ecologically-based technologies versus the conventional technologies? A survey of Honduran hillside farmers in two comparable communities provides some tentative answers.

2. Background for traditional and ecological technologies

Honduran peasant agriculture is in the midst of a transition from traditional, extensive (slash and burn) agricultural systems to intensive systems that will support higher population densities. Studies of the nature of such transitions are heavily influenced by Ester Boserup's (1965) research. Boserup theorized that farmers will adopt more intensive methods when population pres- sures reduce the available farmland, shorten fal- low cycles, and lower the production returns of their labor. In Honduras, the pattern of transition to more intensive agricultural methods is influenced by high population growth rates and by the nation's development policies, which have exacer- bated socio-economic inequality)

During the 1950s and 1960s, the government of Honduras, along with USAID and the World Bank, channeled money into the construction of rural infrastructure and subsidies for the production of cotton and cattle (Williams, 1986, p. 124; Brockett, 1988, p. 117). Large-scale farmers re- sponded to these new economic incentives by expanding their holdings and pushing peasants off public and private lands (Williams, 1986, p. 124). As a result of this enclosure movement and rapid population growth, large numbers of peasant farmers have been forced onto ecologically fragile hillside parcels (Ruhl, 1984, pp. 39-40; Lindarte and Benito, 1991, p. 84). It is estimated that 73% of the land cultivated with annual crops is on hillsides and that hillside farmers produce 42% of the nation's corn (Lindarte and Benito, 1991, p. 168). The slash and burn agriculture

3 An in-depth field study by DeWalt et al. (1994) indicates that for Southern Honduras, " . . . inequal i ty in access to land and the investment patterns of large landowners. . , are much more important factors" contributing to the intensity of land use, destruction of forests, soil erosion, and pesticide contami- nation in the region (p. 118). The most significant pattern documented by DeWalt et al. in Southern Honduras, that of large scale cattle ranching in the fertile valleys and peasants crowded onto hillside parcels, is the dominant pattern throughout Honduras and Central America (Leonard, 1987, p. 75).

C. Mausolff, S. Farber / Ecological Economics 12 (1995) 237-248 239

practiced by these hillside farmers has been environmentally disastrous. Deforestation has been taking place at a rate of 10000 hectares per year (USAID, 1990, p. 3), and it is estimated that between 1980 and 1990, 60% of the deforestation was the result of peasant slash and burn agriculture (Lindarte and Benito, 1991, p. 170). At the current rate of utilization, the forests will disap- pear within a generation (USAID, 1990, p. 3). The pace of ecological destruction raises the question of whether or not Honduras will be able to replace traditional slash and burn agriculture in time to avoid large-scale human and ecological devastation. Alternative, ecologically-based, agricultural development technologies are being considered as one way to meet this crisis and facili- tate the transition to a more intensive and sustainable peasant agriculture.

3. The ecological technologies of World Neighbors

A project run by World Neighbors (WN) and the International Cover Crop Clearing House (CIDICCO) was picked for the evaluation of ecological technologies because these organizations have been the most influential in developing and popularizing these technologies in Honduras (Kaimowitz et al., 1992). 4 WN programs are consistent with the ecological models of agroecology and ethnoecology (Altieri, 1992), coevolutionary agricultural development (Norgaard, 1984), and alternative farming systems (Healy, 1989). These models share some of the following characteristics: - emphasis on stewardship of soil resources by

limiting erosion and increasing available nutrients;

- utilization of locally available resources instead of purchased, industrially produced inputs;

4 World Neighbors defines itself as a non-sectarian, self- help movement supported by private donations. The organization is over 40 years old and runs roughly 80 development programs in 19 countries throughout Africa, Asia, and Latin America. CIDICCO was started by World Neighbors- Honduras to be its research arm and to collect and distribute data on alternative agricultural practices.

- acknowledgment of the interactions between maintenance of local culture and ecosystem sustainability (e.g., the positive role of indigenous culture in maintaining plant genetic diversity); and

-u t i l i z a t i on and respect for local indigenous knowledge. Consistent with these principles, when WN

first begins in an area, their strategy is to start small (geographically, technologically, and con- ceptually) and build upon the technology and practices already in use (Flores and Sanchez, 1991, p. 365). WN's conception of agricultural sustainability also emphasizes development of the individual's thinking and problem-solving abilities. 5 Farmers are taught how to independently evaluate new agricultural technologies and keep improving their practices by learning how to con- duct their own on-farm experimentation (Bunch, 1982, pp. 138-143). The objective is for peasant farmers to learn how to keep improving their agriculture on an ongoing basis, even after the project has ended (Bunch, 1982, p. 11).

The outcome of these participatory and cultur- ally sensitive processes is agricultural systems that are remarkably similar to those of indigenous pre-Columbian farmers. Prior to the arrival of the Spanish, central Honduras was populated by Lencans. 6 The Lencans, like their Mayan neighbors, - cultivated corn, beans, and a variety of tree

and root crops together in a system of intensive intercropping (Hirth, 1989, p. 233; Mejia, 1993, p. 94);

- adapted the corn-bean polyculture to a wide variety of climates, soils, and altitudes by care-

5 Participatory and dialogue methods are utilized to develop these abilities. For example, extensionists might engage the peasants in the following type of dialogue: "Why doesn't this soil hold water? Why are some soils filled with water? What could we use in order to control these factors?" (Flores and Sanchez, 1991, p. 360).

6 The Lencans were similar to the Mayans both in their cultural practices and level of technology. Both had a similarly stratified and hierarchical society, an annual calender of 18 months of 20 days, and relatively intensive agricultural practices that allowed the concentration of people in large towns (Chapman, 1978, p. 36).

240 c. Mausolff, S. Farber / Ecological Economics 12 (1995) 237-248

ful seed selection strategies (Mejia, 1993, p. 102);

- d e v e l o p e d intensive agricultural production practices (such as terraces and ridged field systems) that helped to support the population densities of the larger towns (Friedel, 1983, pp. 43-44; Hirth, 1989, p. 235);

- practiced burning to clear tropical forests and prepare the soil for cultivation (Loker, 1989, pp. 147-149; Mejla, 1993, p. 101). 7 Friedel (1983, p. 43) suggests that some inten-

sive agricultural techniques were replaced with more extensive methods as a result of the Spanish scorched earth warfare and the subsequent population losses. During colonization, the forced re- location of indigenous people to new areas may have eroded knowledge of intensive farming practices appropriate to specific eco-systems (Mejia, 1993, p. 90). Although intensive agricultural technologies were lost in many areas, the corn-beans polyculture system has remained the most dif- fused and common feature of current peasant practices throughout Mexico and Central Amer- ica (Wilken, 1987).

In discussing traditional indigenous agriculture, it is possible to distinguish between the more intensive systems that existed close to urban areas in pre-Columbian times and the extensive shifting agriculture that has persisted since then. The new ecologically-based technologies repre- sent a return to the permanence of the intensive systems and a rejection of shifting agriculture. Among the traditional practices that have been retained are the intercropping of corn and beans and the selecting of seed stock from among traditional, locally grown varieties. WN improves the productivity and utility of these traditional technologies by collaborating with farmers to determine such things as appropriate planting densi-

7 Most researchers conclude that "burning is the most efficient and agronomically sound method for clearing tropical forests" (Loker, 1989, p. 149). Nonetheless, as an ongoing soil preparation practice on already cleared parcels, burning speeds up the soil depletion process by killing the soil's microscopic life and by making the soil more susceptible to nutrient leaching and erosion (Lindarte and Benito, 1991, p. 87).

ties, planting times, and alternative uses of local plants. Among those traditional technologies that have been rejected by WN are the use of burning as part of soil preparation and allowing cattle to graze in corn fields after harvesting, s

Although the new ecologically-based farming systems retain some practices from traditional shifting cultivation, the underlying premises of the two systems are exactly opposite. As noted by Healy (1989, p. 118), traditional slash and burn agriculture is oriented toward extracting as much as possible in a short period, while the new farming systems are based on limiting erosion and building up the soil's nutrients. This stewardship orientation is also at odds with conventional green revolution approaches that rely on high levels of purchased chemical fertilizers to make up for the depletion of the soil's natural fertility (Healy, 1989, p. 118).

4. Methodology and data analysis

Two study sites, near the capital city of Teguci- galpa, were selected for comparison of green revolution and organic agricultural technologies. The ecological technologies were evaluated in three communities, El Jute, La Cuesta, and Sor- aguara, that had been sites of a project run by World Neighbors from 1986 to 1991. Since 1991, CIDICCO has maintained an extensionist in these communities for the purposes of coordinating agricultural research and providing local peasant farmers with technical assistance.

s In one of the communities within the project area (La Cuesta), farmers have traditionally cultivated Lablab bean (Lablab prurien) in association with maize. C1DICCO investi- gators concluded that this traditional practice has helped the farmers to maintain soil productivity "in spite of other negative practices such as the burning of residues prior to preparation of their cropland and the almost non-existent use of other organic or chemical fertilizers" (CIDICCO, 1991b, p. 1). The peasants use of Lablab bean had been limited to harvesting and eating the immature pods and allowing their animals to graze on the leftover beanplants. CIDICCO researchers found that by not allowing the animals to graze on the parcels, farmers could obtain greater corn production, weed control, and soil protection - advantages that greatly outweigh the bean's use as animal fodder (CIDICCO, 1991b, p. 3).

c. Mausolff. S. Farber /Ecological Economics 12 (1995) 237-248 241

The H o n d u r a n g o v e r n m e n t ' s L a n d Use Pro- duct ivi ty E n h a n c e m e n t ( L U P E ) p ro jec t 9 was se- l ec ted as the base l ine by which to c o m p a r e W o r l d Ne ighbor s ' me thods . Wi th in the L U P E project , h i l l s ide p e a s a n t f a rmers in the c o m m u n i t i e s c lose to the town of T a t u m b l a were in te rv iewed. In these communi t i e s , many o f the f a rmer s have had long expe r i ence with soil conse rva t ion prac t ices (e.g., t e r r ac ing and d r a i n a g e d i tches) and g reen revolu t ion soil fe r t i l i za t ion t echno log ies as a result of the Na tu r a l R e s o u r c e s M a n a g e m e n t Pro- jec t which served these c o m m u n i t i e s in the ear ly 1980s. T h e L U P E pro jec t has c o n t i n u e d to p ro - m o t e these technologies .

Peasan t s in the two pro jec t s were surveyed r ega rd ing the i r f a rming p rac t i ces and p r o d u c t i o n levels. Wi th in each p ro jec t a rea , the s amp le of in te rv iewed f a rmer s focused on those who were cul t ivat ing corn on hi l ls ides, so as to c ap tu r e the effects of the var ious soil conserva t ion prac t ices . T h e r e f o r e , the in te rv iewed p e a s a n t s were not se- l ec ted r andomly . In all, 20 p e a s a n t s were in ter - v iewed in each p ro jec t for a to ta l s amp le size o f 40. E a c h in terview was a c c o m p a n i e d by a walk t h r ough the f a r m e r ' s corn f ie ld so tha t the size, s t eepness , and u t i l i za t ion of var ious t echno log ie s cou ld be ver i f ied . Corn p r o d u c t i o n was se l ec t ed for eva lua t ion since it is the single most impor - tan t c rop to fa rmers .

A l t h o u g h the survey m e t h o d o l o g y was not de- s igned to es tab l i sh a we l l -de f ined cont ro l g roup , t he re we re some i m p o r t a n t s imi lar i t ies b e t w e e n the two projec ts . A s shown in T a b l e 1, educa - t ional levels a re roughly s imi lar in bo th sites, as is the s t eepness of the l ands cu l t iva ted in corn. In add i t ion , nea r ly all of the in te rv iewed p e a s a n t s in bo th p ro jec t s c la im to have owner sh ip of the i r land. T h e l eng th o f t ime f a rmer s had p a r t i c i p a t e d in a d e v e l o p m e n t pro jec t , the average a l t i tude

Table 1 A comparison of farms and peasants in the two projects

Variable World Neighbors LUPE

Mean Std Mean Std Dev Dev

Years in project 3.95 2.09 7.42 3.40 Land in corn 0.9 ha 0.6 2.1 ha 2.1 Av. steepness 17.14 ° 14.16 16.89 ° 11.50 Av. altitude 1309.5 ft. 4 3 . 6 1568.4 ft. 228.7 School years 2.90 2.19 2.26 1.91 Landowners 86% n.a. 95% n.a.

and the average a r ea p l a n t e d in corn are g r e a t e r in the L U P E communi t i e s .

The corn p roduc t i on t echno logy was a s sumed to be m o d i f i e d C o b b - D o u g l a s . This is a s imple t echno logy and was d i c t a t ed by the small s ample size. The p r ima ry inputs were l imi ted to land, l abo r t ime, and vo lumes o f chemica l 1° and na tural fer t i l izers . Cap i t a l is p r imi t ive for this type of h i l l s ide agr icu l tu re and is exc luded , tl P roduc t ion t echno log ies were l imi ted to the usage of mini- m u m ti l lage, live bar r ie r s , cover crops , and terraces. G e o p h y s i c a l cond i t ions were l imi ted to the m e a s u r e m e n t o f the average s t eepness of t i l led land. The C o b b - D o u g l a s funct ion inco rpo ra t ing these fac tors is r e p r e s e n t e d as follows:

In Q = o~ 0 + c~tln L + a21n H + a31n C + a ~ M A N

+ a 2 C O V + a 3 T I L L + a 4 T E R R

+ a s L I V E + a~ln S T E E P

+ a 2 P R O J + E, (1)

w h e r e Q is annua l corn p roduc t i on (kg), L is l and in corn p roduc t i on (hec tares) , C is chemica l fe r t i l izers (kg), and S T E E P is s lope (degrees) . 12 The d u m m y var iab les are : M A N = 1 if m a n u r e is used, 0 o therwise ; C O V - - 1 if a cover c rop is used; T I L L = 1 if m i n i m u m t i l lage p rac t ices a re

9 The purpose of the LUPE project is to help small-scale Honduran farmers to prevent soil erosion and improve crop yields. It is a large-scale project designed to reach approxi- mately 20000 farm families in Central and Southern Hon- duras. The Honduran government's Ministry of Natural Re- sources manages the project with financial assistance from USAID.

l0 Urea is the type of chemical fertilizer most commonly used in both projects. The various chemical fertilizer formulas (e.g., 12-24-12 and 15-15-15) are also popular. The cost of all these types of fertilizer are similar and. therefore, the combined averages are used in the production function and in the cost-benefit analysis.

11 The farming tools of peasants in the study area, and throughout Honduras, are a planting stick, a machete, and a large hoe called an azadon.


used; T E R R = 1 if te r rac ing is used; and LIVE = 1 if a live bar r ie r is used. The dummy variable, P R O J, = 1 if a fa rmer is in the Wor ld Neighbors project and 0 for the L U P E project. This variable allows for project effects i n d e p e n d e n t of the technologies control led for.

Eq. 1 is es t imated directly. Genera l ly , there are statistical p rob lems associated with the direct es t imat ion of p roduc t ion funct ions since cost- min imiz ing agents would select opt imal input combina t ions according to relative prices. If so, inpu t decisions would not be i n d e p e n d e n t nor would they be i n d e p e n d e n t of ou tpu t decisions. However, inpu t prices are likely to be so similar across farmers in the sample that it is impossible to use other, more acceptable es t imat ion methods, such as cost or inpu t d e m a n d funct ions to es t imate the coefficients of Eq. 1.13

The results of es t imat ing Eq. 1 are shown in below in Tab le 2. The model captures the most impor t an t factors in the peasants ' agr icul tural p roduc t ion funct ion, expla ining over 80% of the var ia t ion in corn product ion . The soil fer t i l izat ion variables, C O V and MAN, have more positive effects on p roduc t ion than the soil conservat ion variables, MIN, LIVE, and T E R R . This result is not unexpec ted since the effects of soil conserva- t ion may be shown only in the long run. The m i n i m u m tillage variable suggests that this soil conservat ion technology reduces product ion , per- haps because it tends to reduce p lan t ing density.

z2 The data for the production function was gathered using the following questions: How many quintales of corn do you produce per hectare on an average year? How many hectares do you have in corn production? To determine labor inputs, the farmers were asked how long they take to perform each of the following tasks: preparation of soils, planting, first weeding, second weeding, applying fertilizers, folding over the corn stalk prior to harvesting, and harvesting.

13 Another difficulty in using Eq. 1 is that crop varieties may not be the same across the sample. Coefficients in Eq, 1 may vary across crop varieties. The only solution to this is to have a large enough sample to allow separate estimates of Eq. 1 for each corn variety or to allow the use of dummy variables and interaction terms in Eq. 1. This may not be such a problem in this case since sampled farmers were farming in the same small geographic area and may have been using similar varieties.

Table 2 Estimation of the production function (dependent variable: In corn production)

Variable Standard

Estimate error t-Value Prob > I t I

Intercept 1.545587 0.644 2.40 " 0.0230 lnL 0.757574 0.118 6.40 " * 0.0001 lnH 0.216436 0.129 1.68 0.1046 lnC 0.087346 0.057 1.52 0.1393 COV 1.002445 0.258 3.88 * * 0.0006 MAN 0.676802 0.188 3.59 " * 0.0012 TERR 0.193660 0.189 1.02 0.3151 LIVE 0.228335 0.207 1.10 0.2802 TILL - 0.740578 0.232 - 3.20 * * 0.0034 InSTEEP - 0.047176 0.097 - 0.49 0.6289 PROJ - 0.074426 0.248 - 0.30 0.7665

N= 40, R z = 0.87, F = 19.3

* * Two-tail significance at 0.01 level. * Two-tail significance at 0.05 level.

The value of the project coefficient is not significant, implying that the inc luded variables suffi- ciently explain the differences be tween the two projects. The es t imated produc t ion funct ion ex- hibits near ly cons tan t re turns to scale in the three inputs - land, labor, and chemical fertilizer.

Al ternat ive funct ional forms for Eq. 1 were es t imated. For example, if chemical fertilizers were more effective in terraced agricul ture than in non- t e r r aced agr icul ture (because run-off can be reduced by terracing), there would be an interact ion te rm in Eq. 1 be tween In C and T E R R . Or if chemical fertilizers were less effective u n d e r the W N than the L U P E technologies, an interac- t ion te rm be tween ln C and P R O J would be needed . These interact ive variat ions were estimated, but revealed no significant in terac t ion terms. Addi t iona l variables were also considered, inc luding years of educat ion , and whether labor productivi ty was impacted by chemical fertil izer use, cover crops, or manure . None of the respective coefficients was significant. The produc t ion funct ion shown in Table 2 provided the highest adjusted R 2 for the data, pr imari ly since addi- t ional variables used scarce degrees of f reedom in the small sample.

C. Mausolff, S. Farber / Ecological Economics 12 (1995) 237-248 243

5. Cost Comparisons Between WN and LUPE

There are two critical issues associated with the adoption of either ecologically-based or chemically-based methods: (1) the cost differences to farmers, and (2) the ecological differences. No data were collected regarding the latter issue. However, the estimated production function can be used to establish estimated cost differences between farmers in the two projects. In principle, there is an optimal combination of inputs and technologies that would minimize farmers' costs.

Differences in yields between the two farming methods can be illustrated by using the typical technologies for each of the two methods, assuming other inputs not specific to the technology are similar. The primary differences between the WN and LUPE technologies are that LUPE used chemical intensive production while WN used cover crop and minimum tillage technology. Peas- ants in the LUPE project used nearly 1900 kg of chemical fertilizers per hectare while peasants in the WN project used less than 400 kg per hectare. Assuming the mean chemical usage for LUPE and WN, respectively, cover crop and minimum tillage only for WN, and combined mean sample values for other inputs and terrain variables, we can use the estimated regression in Table 2 to compare yields. Yields per hectare were 17% higher under the WN technology, even when minimum tillage reduces the overall production levels.

Cost comparisons are slightly more compli- cated than yield comparisons. In principle, there is an optimal combination of inputs that would minimize farmers' costs. The production function in Eq. 1 and its estimated coefficients in Table 2 imply unique input combinations for land, labor, and chemical fertilizers that depend upon input prices for these factors as well as the technology selected; i.e., cover crops, terracing, etc. One method of cost comparison between the two projects is to assume that the three major input prices are identical for the projects and that the projects differ only in the uses of cover crops and minimum tillage. Even when input prices are identical, farmers will select different cost-mini-

mizing major input combinations since cover crops and minimum tillage will affect traditional input productivity. |4

Using sample mean input prices for the traditional inputs, optimal L, H, and C can be determined and minimum costs estimated. A more general minimum cost would also allow for ex- plicit or implicit costs associated with the use of different technologies. For example, terracing may have a cost in additional labor. Therefore, allowing only L, H, and C to be optimal provides a technology constrained cost minimization. In order to focus solely on the cost effects of cover crops and minimum tillage, we assume for purposes of estimation that the use of terraces, manure, and live barriers are the same for the two projects, although terracing is used by more farmers in the LUPE project (74 compared to 48%). The resulting minimum costs will differ between the two projects and will vary with output.

Minimum cost estimates for varying outputs were estimated for the WN and LUPE technologies. 15 Costs were 22% lower under WN. This cost savings was invariant to output because of the Cobb-Douglas function form used for estimation. For example, at combined mean sample production levels, costs were $976 per year lower with the WN technologies.

14 Using the production function in Eq. 1 and letting the prices of land, labor, and chemical fertilizers be Pz, P2, and P3, respectively, optimal combinations of these inputs are determined by minimizing cost subject to an output constraint and the production function. Solving this optimization problem results in the following input demands:

InC = {In Q - Z - [ a I I n ( o t , p 3 / a 3 p l )

+ ot21n(ot2p 3/ot3p2)]} ( a l + tr 2 + a3 ) - I .

In H = ln(tr2p3/a3P2)+lnC, In L = ln(cqpz/azPl) , where Z = a 0 + a I M A N + a , C O V + o ~ 3 T 1 L L + a 4 T E R R + a s L I V E + a I I n S T E E P . As one can see, changes in MAN, COV, etc. will result in changes in C. H, and L.

z5 The input quantities, production levels, and wage rates are based on the surveys in the communit ies . The price of chemical fertilizers is based on USAID (1992). The land rental prices are from surveys by Lopez-Pereira (1989).


6. Interpretation of the model results and adoption patterns

6.1. Soil fertilization technologies

Tab le 3 shows the cu r r en t p e r hec t a r e corn p r o d u c t i o n levels and those o b t a i n e d p r io r to the invo lvement of ou t s ide extensionis ts . T h e yie ld inc reases for L U P E inc lude those o b t a i n e d by the p r e d e c e s s o r N a t u r a l R e s o u r c e s M a n a g e m e n t Pro- ject . Both p ro jec t s have ach ieved subs tan t ia l y ie ld increases . T h e cu r r en t p e r hec t a r e p r o d u c t i o n levels and the ne t p r o d u c t i o n inc reases a re h igher in the W N pro jec t .

W N fa rmer s had , on average , lower u t i l i za t ion of chemica l fe r t i l i zer and g r ea t e r u t i l i za t ion of cover c rops and compos t ing . Based on ou r stat is- t ical resul ts , this is a r a t iona l subs t i tu t ion since it bo th lowers costs and ra ises yields. T h e elast ic i ty of o u t p u t wi th r e spec t to chemica l fe r t i l izers is only 0.09 in T a b l e 2, implying tha t a 100% in- c rease in fe r t i l izer use would only inc rease o u t p u t by 9%.

In the pas t , chemica l fe r t i l izers have inc reased the economic r e t u r n of corn p r o d u c t i o n cons ide r - ably. T h e t r ip l ing of corn p r o d u c t i o n in the L U P E pro jec t has p robab ly been due in la rge pa r t to the use o f these fer t i l izers . However , wi th the deva lu- a t ion of the L e m p i r a in 1990, chemica l fe r t i l i zer p r ices d o u b l e d in less than two yea r s ( U S A I D , 1992, p. 12). A t the cu r r en t pr ices , the benef i t s of subs t i tu t ing velvet b e a n for chemica l fe r t i l i zer a re grea t ly magni f ied .

In add i t i on to the i r high costs, a n o t h e r r eason why chemica l fe r t i l izers d id no t p e r f o r m b e t t e r in this eva lua t ion is tha t very few of the p e a s a n t f a rmer s use h igh-y ie ld ing var ie ty ( H Y V ) seeds .

Table 3


Mean Std Mean Std Dev Dev

Corn production 2018 kg/ha Pre-proj production 600 kg/ha Chemfert 365 kg/ha Covercrop 76% Manure 24%

945 1879 kg/ha 1260 625 822 kg/ha 800 289 1862 kg/ha 3904

0O% 26%

H Y V seeds are much m o r e respons ive to fer t i l - izer inputs and could s ignif icant ly inc rease produc t ion levels. O n e cons t r a in t is tha t deve lop ing H Y V seeds for each of the many eco-sys tems in H o n d u r a s may be costly. A n o t h e r issue is tha t f r equen t ly the exist ing t r ad i t i ona l seed var ie t i es a re less suscep t ib le to d rough t and d i sease or have o t h e r charac te r i s t i c s de s i r e d by the peas - ants. 16 W h a t e v e r the reason , L U P E extens ionis t s g radua l ly came to the conclus ion tha t no H Y V corn seed was avai lab le for these c o m m u n i t i e s tha t could o u t p e r f o r m t r ad i t i ona l var ie t ies , and they s t o p p e d r e c o m m e n d i n g H Y V s e e d s ) 7

A c o m m o n subs t i tu te for chemica l fer t i l izers is the use of cow m a n u r e , t8 Both pro jec t s encour - age the use of cow m a n u r e , and abou t o n e - q u a r t e r of the p e a s a n t s in each p ro jec t use it in the i r corn pa rce l s (see T a b l e 3 above) . However , the use of an ima l m a n u r e s by themse lves is not a suff icient a l t e rna t ive to chemica l fer t i l izers . In these communi t ies , the p e a s a n t s do not have enough cows o r ch ickens to mee t the i r fe r t i l izer needs . Never - theless , a m o n g the in te rv iewed peasan t s , the use of cow m a n u r e is a s soc ia ted with 68% higher corn p roduc t i on (s ignif icant at the 0.01 level).

T h e most v iable subs t i tu te for chemica l fert i l - izer t u r n e d ou t to be cover crops. Cover c rops a re p r o m o t e d only in the W N pro jec t whe re they are u t i l i zed by 76% of the in te rv iewed fa rmers (see T a b l e 3 above) . C I D I C C O f inds tha t the cover c rop of choice in these communi t i e s , velvet bean (Mucuna pruriens), p r o d u c e s up to 60 kg of n i t ro- gen pe r hec t a r e ( C I D I C C O , 1992a, p. 1). W N

t6 Frequently the seeds from a HYV crop are not usable as seed and therefore seeds need to be repurchased every year.

17 As an alternative to developing HYV seeds in the labora- tory, World Neighbors attempts to improve the selection process of each peasant. With this method, the beneficial genetic characteristics of the native seeds, which have been built up over centuries, are not lost. Altieri and Anderson (1992, p. 56) stress that maintaining these seed varieties helps to preserve the rich genetic diversity that is necessary for the expansion and renewal of crop genetic resources.

is Another possible substitute would be composting, but due to its labor intensity, it is generally not economical when used on basic grains. Instead it is generally reserved for more intensive uses such as vegetable gardens (World Neighbors, 1989, p. 3).

C. Mausolff, S. Farber /Ecological Economics 12 (1995) 237-248 245

recommends that peasants plant velvet bean in- tercropped with corn. This practice is traditional to Central America and Mexico, and was already being utilized by a few hundred small farmers on the northern coast of Honduras when WN first started promoting it in their programs in 1987 (CIDICCO, 1991a, p. 1; Neugebauer and Bunch, 1991, p. 465). WN and the Association for Coor- dination of Development Resources ( A C O R D E ) can be credited with popularizing the use of velvet bean among N G O s and peasants throughout Honduras (Kaimowitz et al., 1992, p. 6).

Velvet bean is a technology readily adopted by peasant farmers. At the time the WN project ended in December 1991, WN had convinced 59 farmers to adopt the velvet b e a n - c o r n intercropping system (CIDICCO, 1992b, p. 5). By August of the following year an additional 26 farmers in the project area had adopted this technology without promotion from any agencies (CIDICCO, 1992b, p. 5). The results of this study and those of other researchers provide several possible explanations for the receptivity of peasants to this technology.

Our regression results in Table 2 indicate that the use of velvet bean in these communities increases yields by 100%. These findings are in the range of those reported by other researchers in Honduras. The studies of velvet bean by Pineda and Gonzfilez (1975) and Nfijera and L6pez (1990) on the north coast of Honduras find average yield increases of 105 and 78%, respectively. Pineda and Gonzfilez (1975) also report velvet bean use results in a 148% improvement in total economic return per unit land area, while Nfijera and L6pez (1990) find that it reduces weed control costs by 58%.

Table 4 Adoption of soil conservation methods by project


Terraces 48% 74% Livebarriers 76% 63% Minimum tillage 62% 0% Drainage ditches 86% 74%

not indicate the adequacy of the application of each technology to the particular circumstances of each farmer. In some cases, farmers may have one corn parcel well terraced, but have several others without any soil protection. The analysis here simply reports on whether the farmer has adopted the soil conservation technology on any part of his corn parcel. Casual observation suggests that most farmers in both projects could achieve significantly greater soil conservation by applying these technologies in a more intensive manner.

Overall, Table 4 shows that the soil conservation adoption pat terns are similar across the two projects, except that WN farmers have adopted minimum tillage while more L U P E farmers have constructed terracing) 9 Although it should be noted that most of the terracing in the LUPE project was constructed during the previous Nat- ural Resources Management Project, which paid farmers to build terracing. Based on our results, the soil conservation strategy followed by the L U P E peasant farmers is more optimal. Our statistical results show minimum tillage to be nega- tively associated with corn yields (significant at the 0.01 level), and terracing to be positively correlated with higher yields (although not at a statistically significant level). 2°

6.2. Soil conservation technologies

In soil conservation programs, motivating the farmers to adopt the generally labor-intensive technologies is the key problem (Hurni, 1988, p. 36). Table 4 provides a very rough measure of the success of WN and LUPE in convincing farmers to adopt various technologies. The adoption rates repor ted in Table 4 are impressive, but it should be remembered that the rates reported above do

19 Some farmers in other WN projects are gradually building their minimum tillage rows into terracing.

2°The negative correlation between corn production and use of minimum tillage has several explanations. It is possible that the weeds in the uncut turf between the tilled rows compete with the corn for soil nutrients. Another explanation is that minimum tillage results in lower planting densities. For this reason, some World Neighbors extensionists ask the peasants to measure their planting according to linear meters rather than hectares or manzanas.


It is generally thought that for steeper slopes, terracing is the only good long-term solution (Hurni, 1988, p. 36; Sheng, 1989, p. 37). A detailed soils study on hillside farms in Southern Honduras (Thompson, 1992) found that terraces are effective for controlling erosion even though they do allow some soil nutrients to filter through the soil and collect behind the stone wall of the terrace. The use of minimum tillage could be an effective way to prevent this type of unwanted nutrient filtration on steep slopes. In those farms that are using minimum tillage in combination with terracing, it appears that this problem has been alleviated. 21

The primary problem with terracing is the amount of initial work required for its construction. David Leonard of LUPE estimates that one man can build 4-10 meters of stone terracing in a day (pets. commun., May 1992). By comparison, he reports that 20-40 meters of vetever grass (a common live barrier) can be planted in a day. Several different approaches exist for addressing the heavy work involved in constructing terraces. In the Natural Resources Management Project, farmers were paid to construct terracing on their own property. The LUPE personnel argue that the practice of paying farmers for soil conservation has been detrimental to the current project's efforts to motivate farmers to maintain their ex- isting structures and to construct new ones volun- tarily.

In the LUPE project, the motivational problem associated with terrace construction is dealt with through educational efforts about the productivity benefits of erosion control and the promotion of alternative technologies; for example, live barriers and drainage ditches. These technologies require less labor and some offer advantages in addition to their soil conservation quali-

21 The effects of nutrient seepage can be often be observed by the progressive yellowing of the corn leaves in different areas of the parcel. On parcels with both minimum tillage and terracing, the coloring of the corn is uniform between the terraces.

ties. Many of the live grass and tree barriers, for example, provide food for livestock. Also, live barriers, when used together with terracing, increase the durability and erosion control proper- ties of the terracing (Thompson, 1992, p. 10).

7. Summary

In the context of the economic and ecological crisis facing Honduran peasants, both the conventional, chemical-oriented (LUPE) and the low- purchased-input (WN) approaches can be judged a success. Both projects have convinced peasants to adopt soil conservation methods and both have significantly increased average corn production levels in their respective communities. In addition, all surveyed peasants in both communities have stopped the practice of burning their fields as part of their soil preparation process. There- fore, even though the LUPE project has increased the peasant's usage of chemical inputs, it has still been environmentally beneficial. The en- vironmental damage associated with the use of chemical fertilizers may be small compared to the soil erosion and smoke caused by burning. How- ever, the economic superiority of the alternative ecological technologies suggests that there is no need to trade-off chemicals for burning. Peasants using these alternative methods achieved com- mensurate yield increases using one-fifth the quantities of chemical fertilizers. The substitution of velvet bean for chemical fertilizer results in both less pollution and lower overall costs.

Not all of the new agricultural technologies are associated with higher economic returns. Uti- lization of minimum tillage appears to substantially lower corn production levels. It is possible that with refinement of this soil conservation technique these negative effects can be overcome. This finding demonstrates the importance of ongoing monitoring to ensure that prescribed technologies are, in fact, benefiting farmers.

Extrapolating these local results to the national level, we conclude that either the conventional or the new ecological methods would do much to alleviate rural poverty and prevent the wholesale destruction of the Honduran country-

C Mausolff, S. Farber/Ecological Economics 12 (1995) 237-248 247

side from slash and burn, shifting cultivation. However, current agricultural development programs reach only a small percentage of the peasants in need. The LUPE project is projected to reach a total of 20 000 peasant families (Leonard, 1992, pers. commun.), while the 66 NGOs involved in agriculture reach an additional 50000 peasant families (Kaimowitz et al., 1992, p. 5). Combined, these programs reach only 21% of Honduran peasant farmers. Meeting the rural ecological crisis will require a much greater com- mitment to the productivity and well-being of peasant farmers.

Acknowledgments

Special thanks are given to the Center for Latin American Studies and the Graduate School of Public and International Affairs at the Univer- sity of Pittsburgh for funding assistance.

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An economic analysis of ecological agricultural technologies among peasant farmers in Honduras

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