Crop Diversification in South Asia: A Panel Regression Approach

Abstract

The South Asian agricultural sector has experienced vigorous growth and structural transformation over the last few decades, albeit differently across the region. This study examines the crop diversification status and various determinants, such as socioeconomic (per capita gross domestic product, population, arable land, and cropland), soil/agronomic (root zone moisture), agricultural inputs (fertilizer and pesticide consumption), the productivity of food and non-food crops, international trade, and climate (maximum and minimum temperature and rainfall) factors. The share of cereals has decreased in most countries, but they continue to dominate South Asian agriculture. The area under high-value crops in India has increased significantly, replacing the area under cereal cultivation during the study period. Similar results were seen in the Maldives, where vegetables replaced oilseeds. The Hausman model test suggested a random-effects model for analyzing the determinants. All the determinants considered in the study explain 69 percent of the variation in the crop diversification index. The crop diversification in South Asia was influenced by per capita gross domestic product (G.D.P.), minimum temperature, pesticide consumption, food crop yield index, and non-food crop yield index during the study period. Cropland percentage and population, on the other hand, reduce crop diversification. The price factor contributed more than half to agricultural growth. It remained the primary source of growth in all South Asian countries, followed by yield, which is identified as the second most crucial factor. The contribution of crop diversification to agricultural growth has been declining over time.