Potential and limitation of an organic fertilizer‐based development strategy: evidence from Tamil Nadu,India, from 1993 to 2003

This article explores the potential and limitations for using farmyard manure (FYM) to improve paddy and upland cereals productivity under various soil conditions in Tamil Nadu, India. Using household‐level fixed effects, estimated yield functions from 1993 to 2003 confirm that FYM application directly increases crop productivity in upland cereals, but not in paddy rice. Complementary effects through an increase in the marginal product of inorganic fertilizer is observed for both paddy and upland cereals, especially where inherent soil fertility is low. Farmers’ FYM use is responsive to changes in the price of FYM, but transport costs limit price transmission across space. Dairy sector development thus improves crop productivity, but only in the small area around the animals which limits the spread of FYM‐based development strategy.