Timothée Demont : timothee.demont[at]univ-amu.fr
Alice Fabre : alice.fabre[at]univ-amu.fr
To understand why farmers in Uganda plant so many crops on their farms, we model and estimate the value of crop diversity to farmers in Ugandan. Based on empirical facts derived from data of 30,000 plots in Uganda, we develop a model that includes efficiency increasing mechanisms of specialization from the economics literature with the productivity enhancing role of biodiversity suggested by the ecology literature. The model predicts that crop diversity enhances productivity in low input agriculture but also that these positive impacts of diversity decline with the control over the environmental factors of production. Our theory suggests further that crop diversity increases with farm size and labor in low input agriculture while this effected is muted with increasing control over environmental factors of production. We then test these predictions with the data for the low input agriculture of Uganda. Using land inheritance and the household composition as instrument for farm size and labor respectively, we find that a 10 percent increase of farm size and a 10 percent increase of labor increases crop diversity by about 2 percent each. Holding labor and land fixed we find further that a 10 percent increase of crop diversity increases revenues and calories production by about 3 percent. These results suggest that the low levels of inputs to control the environment as well as the rural surplus labor drives the high levels of crop diversity in Uganda, and that crop diversity enhances productivity under the agricultural conditions of Uganda. Using the model results, the estimates suggest that the annual value of crop diversity in Uganda is about two billion USD.