Market-Based Incentives for Conserving Diversity on Farms: The Case of Rice Landraces in Central Tarai, Nepal - PowerPoint PPT Presentation

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Market-Based Incentives for Conserving Diversity on Farms: The Case of Rice Landraces in Central Tarai, Nepal


Market-Based Incentives for Conserving Diversity on Farms: The Case of Rice Landraces in Central Tarai, Nepal Devendra Gauchan University of Birmingham, UK and – PowerPoint PPT presentation

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Title: Market-Based Incentives for Conserving Diversity on Farms: The Case of Rice Landraces in Central Tarai, Nepal

Market-Based Incentives for Conserving Diversity
on Farms The Case of Rice Landraces in Central
Tarai, Nepal
  • Devendra Gauchan
  • University of Birmingham, UK and
  • In Situ Agrobiodiversity On-Farm Project Nepal
  • Presented at BIOECON Conference, Venice, Italy,
    28-29th August 2003

Presentation Outlines
  • Background to study
  • Market Incentives Crop Genetic Diversity
  • Research Methods
  • Findings Market share, market channels, price
    and margin analysis and Market Participation
  • Summary and conclusions
  • Implications for policy and research

Background to Study
  • Rice-a globally important food crop also for
  • Landraces- sources of global crop genetic
    diversity and livelihood security for farmers in
  • Markets can provide signals for farmers decisions
    to maintain or abandon diverse landraces (LR)
  • Markets if function well, could be cheapest
    instruments to conserve agrobiodiversity on-farm
  • However, so far, market studies have focused
    mainly modern varieties (MV)- studies on market
    and policy incentives disincentives to maintain
    landraces are lacking

Rice Varietal Diversity
Landrace Intermediate
Landrace-Early maturing
Landrace-Late maturing
Market Incentives and Issues
  • Markets may be thin for LRs Price signals may
    be limited use to provide incentives to cultivate
  • Markets may function poorly- farmers produce for
    own consumption affecting choice of varieties
  • The attributes that farmers demand for production
    own consumption may not be recognised and
    valued by other consumers
  • Price premium may not transmit consumer demand
    for quality when attributes are not transparent

Market Policy Incentives Disincentives
  • Technological change, with development of
    markets provide incentives for Modern Varieties
    over Landraces.
  • Input markets biased to MVs with direct seed
    subsidies or hidden subsidies on other inputs
    (e.g. fertilizers).
  • Information problems inherent in new seed
    technology biased for MVs through public
    extension trainings
  • Asymmetry of information and poor flow of market
    information in landraces .

Case Study Purpose
  • Advance scientific understanding of the
    incentives the farmers have to grow landraces as
    the market environment changes in Nepal
  • Study premise If the superior traits of
    landraces recognised and valued in markets -they
    could deliver incentives in the form of price

Map of Nepal and Study Site
Bara Ecosite
Research Methods
  • Baseline household survey of farmers (N202)
  • Key Informant Survey, Focus groups and other
    Informal methods (e.g. direct observation)
  • Market channels, market actors product flow
  • Marketing costs and Margin Analysis
  • Market price analysis Price Differentials
    between LR and MV and Within LRs

(No Transcript)
Market Channels
  • Producer-Sellers
  • Local market intermediaries Golas, Bania,
    Kutuwa, Paldar, Kawarni etc.
  • Small-scale local processors e.g. custom mills
  • Large scale trader processors e.g.
  • Exporter /importer of milled rice, parboiled rice
  • Wholesalers of milled rice
  • Retailers
  • Local farmer urban consumers

Market Channels Practices
Small scale traders
Collection point at Gola-Large-scale traders
Rice Market and Landraces
  • Less than half of the households sell rice
  • Farmers grow 53 varieties of which, 33 are LRs
  • Two landraces were formally traded in market
  • Market recognises only phsically observable
    quality i.e coarse and fine grain types
  • Many coarse LRs traded informally in small scale
    irregularly and are of heterogenous grain types
  • Fine grain aromatic Basmati LR traded in formal
    market in small scale

Market Shares for Landraces
Market Price and Margin Analysis
  • Price Differentials between LR MV high and
    observable for some landraces
  • The ratio of average farmgate and market price to
    those of similar MVs for Basmati LR is gt 1 whilst
    for the coarse grain Mutmur LR lt 1
  • Coarse grained landraces considered poor quality
    in formal market lower margins and profits
  • Though profit margins for local Basmati-fine
    landrace is high, its market is affected by the
    supply of cheaper Basmati from across the border

Market Participation Rice Diversity
  • Farmers selling rice have larger farm, more
    literate and wealthy as compared who donot sell
  • Farmers selling rice grow more no of varieties
    both LRs and MVs have larger area in MVs
  • Higher of farmers selling rice maintain more
    combination of LRs MVs
  • Farmers growing marketable landraces (Basmati)
    were better off with less off-farm work

Varietal Ratings for Attributes
  • Inferior physical attribute is valued in market
    but not their superior agronomic attributes
  • Basmati rated higher for consumption but low for
    agronomic attributes
  • Coarse grained LRs Mutmur rated higher for
    agronomic attributes but lower for consumption

Disincentives to Landraces
  • Landraces face disincentives both from market and
    policy environments
  • Market development favouring modern varieties
    (MV) over landraces
  • Seed and input subsidies directed to MVs
  • Public funded extension and training support
    given for only MVs

Summary and Conclusions
  • Mostly informal and thin market for landraces
  • Superior Traits in LRs are not recognized in
    market -except consumption traits of aromatic
  • Price signals for many landraces are not
    generally transmitted from consumer to producers
  • Farmers growing Basmati landrace are better off
    than other landraces growers
  • In contrast to coarse types, market incentives
    for high quality aromatic Basmati landrace is

Implications for Research Policy
  • Value addition market linkage of landraces with
    high social value is needed
  • However, further analysis of costs and
    benefits-before specific mix of policy
  • Not all the landraces are equal Market dev.
    incentives may favour one landrace to other types
  • The tacit assumption that the poor who maintains
    rice landraces needs further empirical work
  • The genetic contribution of landraces types is
    unknown if poor maintain unqiue alleles, then
    there may be trade off in efficiency vs equity.

Market Price and Marketing Margin
LRsMutmur Basmati MVsChina-4 Sabitri
Rice Variety Choices and Market Participation
()Pairwise T- Test () Chisquare Test
significant (Plt 5) level
Wealth, Farm Size, Literacy Market Participation
()Pairwise T- Test () Chi-square Test
significant (Plt 5) level
Sauce-Economic Status of Growers of Basmati MVs
()Pairwise T- Test () Chi-square Test
significant (Plt 5) level
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