Impact of Land Use Rights on the Investment and Efficiency of Organic Farming

Abstract

This study investigated the impact of three land tenure arrangements on organic farming (OF) in terms of increment of efficiency, yield, and investment in soil-improving activities by using farm-level data gathered from three districts located at Punjab, Pakistan. A multivariate tobit model that captured the probable substitute and investment choices, as well as the endogenous nature of land tenure arrangements, has been employed in this analysis. The empirical outcomes displayed that rights of land use affected the decisions made by farmers to invest in land and to improve efficiency. In detail, owner-farmers with secure rental arrangements invested more in improving their land and productivity compared to those with unsecured lease agreements. The yield per hectare was the highest for owner cultivation farm, while sharecropper output seemed the lowest, which are in agreement with the hypothesis of Marshallian inefficiency.