The Economics of Tropical Farming Systems

Organic farming may be more sustainable in tropical farming systems.

A variety of factors affect the economics of tropical farming systems, determining whether a particular farming system is economically viable and sustainable in a given location. In some cases, organic farming methods may be more sustainable than conventional farming systems, although these farms may not be certified as organic due to the cost of certification.

Viability

Whether tropical farming is viable in any location depends in part on the amount of inputs that are necessary to grow crops in that location. If the soil is very depleted, it will take more fertilizer than in areas with good soil, and if the rainfall is low the crops will need irrigation. If the cost of the inputs exceeds the price you can get for the crop, it's not economically viable to grow the crop.

Sustainability

The type of farming practiced affects the sustainability of tropical farming. Organic farming methods can help keep the soil fertile and increase crop production. Other options for increasing sustainability include crop rotation, planting nitrogen-fixing crops and making efforts to decrease erosion. Planting crops that are suited to the type of soil and the amount of rain received also improves the sustainability.

Conventional vs. Organic

Conventional farming methods can require a lot of inputs to produce high yields, including fertilizers, pesticides and seeds. Organic farming methods can help tropical farmers minimize their inputs while maximizing the output of their farms. However, certification can be costly, so farmers who participate in smallholder contract farming schemes may be better able to take advantage of the increased income available through certified organic farming. Even without certification, organic farming can increase revenue slightly, according to a study published in 2008 in "World Development."

Considerations

Not all organic shareholder contract farming schemes are the same. Certain features, including providing a guaranteed market for the product at a premium price and providing contract farmers with inexpensive organic methods to increase yields, make it more likely that the organic scheme will be economically beneficial for farmers in tropical areas, according to the "World Development" study.

References

• Agricultural Economics: Measuring the Sustainability and Economic Viability of Tropical Farming Systems: A Model from Sub-saharan Africa
• World Development: The Economics of Smallholder Organic Contract Farming in Tropical Africa
• Priorities for Alleviating Soil-related Constraints to Food Production in the Tropics; International Rice Research Institute