Sticky Rice': Variety Inertia in a Technologically Progressive State of India

In this paper, we study an interesting case of variety inertia in an otherwise technologically progressive region of India. We examine the high adoption of Pusa 44, an environmentally unsustainable, old rice variety in Punjab, despite the availability of many newer improved varieties and the overall technological advancement of agriculture in the region. We use detailed household data on variety adoption and crop economics, collected from a primary survey conducted in 2017. We find that the stickiness of Pusa 44, i.e. the resistance of rice farmers to adopt newer and more sustainable varieties, is explained by a lack of economic incentives. The private benefits obtained from higher yields of Pusa 44 compared to other varieties, far exceed its immediate costs, as the use of ground water resources is easy and inexpensive. Moreover, farmers perceive yield as the most important of variety traits, which further affects their choice in favour of Pusa 44. Policy intervention is important in this set up where the natural resource cost is not fully realized, and growing Pusa 44 results in negative externalities. We find some evidence that government intervention in the seed supply system can help promote the switch to newer, more sustainable rice varieties. Acknowledgement : We acknowledge the Indian Council of Agricultural Research (ICAR) for their financial support to conduct this study.

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Conference Paper/ Presentation
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JEL Codes:
O33; Q01

 Record created 2018-10-02, last modified 2020-10-28

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