An Economic Analysis of the Impact of Practicing Climate Smart Agriculture by Rice Producers in Bangladesh

Bangladesh is one of the most climate hazard-prone countries in the world. Floods, tropical cyclones, storm surges, droughts and salinity in coastal Bangladesh are likely to become more severe and frequent in future. While salinity impacts on coastal agriculture is well understood, dealing with farmers’ preferences on livelihood choices, newer rice variety adoption and appropriate policy options to address salinity issues remains unexplored. In addition, productivity and efficiency differences between saline and non-saline Boro rice farmers are still unknown. This research study aims to explore the influence of salinity on rice productivity and agricultural decisions in the coastal regions of Bangladesh. A translog stochastic production function provides an appropriate methodology to investigate the differences in technical efficiency between Boro rice farmers in saline and non-saline areas. To test for differences between Boro rice production from these groups, a Welch t-test has been employed. The actual input use in both areas were estimated using a simulation model. The effect size from each model indicates that more irrigation and family labour are being used by farmers in saline area to maintain Boro rice output, but extra irrigation decreases marginal productivity because of salinity effects. Then, the study used three different stated preferences methods, contingent behaviour (CB) approach, discrete choice experiments (DCEs) and Best Worst Scaling (BWS), to identify how farmers will respond to the future risks. The CB approach has been applied to collect hypothetical data regarding farmers’ risk attitudes and farming choices. The heterogeneity of preferences of coastal rice farmers towards adopting newer salt-tolerant rice varieties was identified from a discrete choice experiment. This study also used the best-worst scaling (BWS) method to analyse the preferences of Bangladesh coastal farmers towards the agricultural policy options that were identified in Bangladesh's Agricultural National Policy 2018. Twenty coastal agriculture-related policies were selected for the BWS questions from this policy document. The results indicate that the productivity of Boro rice is significantly lower in saline areas compared with non-saline areas. The larger rice yield reduction creates a challenge for farmers to continue rice farming, with risk-taking farmers more likely to allocate their farming land to traditional rice and risk-averse farmers are more likely to allocate their land to salt-tolerant rice. Policies that promote integrated rice-fish farming and access to better salt tolerant rice varieties would be useful to address the rice yield decline in salinity affected areas.