Farmer Preferences for Drought Tolerance in Hybrid versus Inbred Rice

Roughly 20 percent of India's total land area is drought prone, including 16 million hectares of rainfed lowland rice and 6.3 million hectares of upland rice. When droughts occur, there are significant negative impacts on rice production, both in reductions in area cultivated and in lower yields, resulting in lower rice production and lower farm incomes. In addition to these immediate, farm-level consequences, there are often significant secondary household impacts such as indebtedness, asset depletion, and health consequences that perpetuate already high levels of poverty and deprivation in India. Recent efforts to develop rice cultivars with drought-tolerance (DT) traits have resulted in the release of several varieties that demonstrate significant resiliency to drought stresses with no yield penalty under normal conditions. Simulation exercises aimed at assessing the impacts of DT rice suggest that the successful development and delivery of these varieties will produce significant benefits across south Asia, well in excess of the investments necessary to develop the technology. Although this holds potential promise for both public- and private-sector research efforts, the development of DT cultivars does not necessarily imply that DT varieties will be widely adopted with the same speed as other recent improvements due primarily to the nonmonotonic nature of the benefits associated with drought tolerance and their effect on social learning and technology diffusion. In this study, discrete choice experiments are used to examine farmers' preferences for DT traits embodied in different rice backgrounds (hybrid and varietal) and explore heterogeneity in these preferences. This distinction is motivated by differences in the potential avenues or scenarios through which such traits could be embodied in seed technologies. In the scenario that characterizes most of India's innovation in rice to date, public research institutions develop inbred cultivars with desirable traits such as higher yield, shorter duration, or drought tolerance. These inbreds are then distributed through various channels as low-cost seeds that small-scale, resource-poor farmers can save and replant each season. In an alternative scenario that is much less common in rice, it is the private, profit-maximizing firm that develops these desirable traits, typically by introducing them in a hybrid, rather than inbred, background that allows the firm to maintain control over the gains afforded by its innovation. The study uses primary data collected in rural Bihar, India, to examine farmers' preferences for DT traits. The results show that farmers value the reduction in yield variability offered by DT cultivars but are willing to pay even more for rice seed that offers yield advantages even under normal conditions. The study also demonstrates that risk aversion and loss aversion are important components of farmer utility, as these behavioral parameters not only significantly influence choice probabilities but also affect the way farmers value different seed attributes. The findings suggest that the development of DT cultivars has the potential to benefit poor and vulnerable farmers in hazard-prone ecosystems, but the success of such efforts will depend on the ability of researchers and policymakers to address the complex social and economic factors that influence the adoption of new technologies.