The impacts of agricultural price policies on the adoption of integrated pest management by subsistence farmers: A case study of irrigated rice farmers in the Philippines

Agricultural price policies raise important implications on farmers' adoption of integrated pest management or IPM. High support prices are said to induce farmers to apply pesticides in a non-judicious and inefficient manner. Pesticide subsidies affect usage at the margin, resulting in higher input use than necessary to achieve optimal profits. Very limited empirical studies lend support to these issues concerning subsistence rice farmers.;A whole farm simulation model, FLIPSIM V, is used to evaluate farm-level impacts of agricultural price policies on the adoption of IPM by subsistence irrigated rice farmers in the Philippines. Different IPM adoption levels are explicitly modelled as knowledge adoption levels based on sampled farmers' composite scores of a field skills test on recommended IPM practices. Regional price differentiation is used as a proxy for two price policy scenarios. Stochastic dominance criteria are then used to rank adoption preferences of farmers with different attitudes towards risk.;The study's results support the hypothesis that low rice and high chemical prices enhance the full adoption of IPM among irrigated rice farmers. Confidence premiums as measures of conviction reveal a strong preference for the full adoption strategy held by both intermediate adopters and non-adopters whose incomes come strictly from rice farming. Farmers' preferences, however, are not necessarily translated into actual adoption behavior since earnings from other farm and off-farm enterprises tend to offset the IPM benefits on the economic performance of full adopter farms.;The study also finds that the attractiveness of the full adoption strategy from the perspective of non-adopters and intermediate adopters is no longer apparent under low yield and low rice price conditions and is not influenced by the degree of yield risks confronting irrigated rice farmers. Given the levels of chemical prices used in the study, pesticide price changes have no measurable effects on farmers' adoption preferences for IPM. On the other hand, output price adjustments tend to motivate intermediate adopters toward fully adopting the IPM technology. IPM-practising farmers generally spend less money on pesticides than non-adopters, but lower pesticide expenditures are not always reflected in higher net cash incomes since farmers' may spend more on other variable cost items. This finding, among others, highlights the importance of analyzing the benefits of the IPM technology from a whole farm perspective rather than from a marginal analysis of direct costs and benefits.