Efficiency of using Chemical Leasing approach in Pest and Disease control in Agriculture – Evidence from the Potato Cultivation

Abstract

Chemical fertilization is very popular in Sri Lankan agriculture and application of chemicals has a major impact on the economy, health and environment of the country. Vegetable and home garden cultivation has recorded the most severe harm adding very high levels of heavy metals to the environment. Chemical Leasing is an innovative business model which is a good solution for this issue which will reduce chemical usage while maximizing profits to major stakeholders. During the study, chemical leasing approach was applied to potato cultivation parallel to conventional farming approach. The pytoprotection chemicals were reduced in the chemical leasing approach and the leaf area and height was used to measure plant growth. New software was developed to measure the plant leaf area more efficiently. A methodology is formulated to derive the unit of payment for chemical leasing. Results show that the new software based approach to measuring leaf area is very successful with both Average Absolute Error and Average Bias Error < 5%. It is very much suitable for developing countries as it is less expensive and less labour intensive. Furthermore, Profit against chemical costs (α) Chemical reduction proportion (β) and Profit sharing agreement between service provider and the farmer (γ) are the important determinants of the unit of payment. These determinants are not universal and are variable from one project to another depending on numerous domain specific factors