Impact of non-farm work and land tenancy contracts on soil conservation measures

Abstract

This paper examines the impacts of non-farm work and land tenancy arrangements on the intensity of investment in soil-improving measures and farm productivity. A multivariate tobit model that accounts for potential endogeneity between the intensity of investment and the non-farm work and tenancy arrangement variables is estimated for 341 rural households in Punjab province of Pakistan. Instrumental variable approach is also used to analyze the impact of tenancy arrangement and non-farm work on farm productivity. The empirical results show that participation in non-farm work and tenure security tend to increase the intensity of investment in long-term soil-improving measures, but decrease chemical fertilizer use intensity. We also find that increases in non-farm work and tenure security exert significant and positive effects on agricultural productivity. Investment in soil conservation measures is also found to significantly increase agricultural productivity.