Impact of the adoption of chemical inputs on crop yield downside risk

The study aims to analyse the impact of application of chemical inputs like fertilisers or crop protection products on farm crop yield productivity in Estonian and Slovenian agriculture. We combined the propensity score matching (PSM) method with an inverse probability weighted regression (IPWRA) model to derive treatment effects of the adoption of these critical inputs using Farm Accountancy Data Network data. Results exhibit consistency across estimation techniques. Estimates of both IPWRA and PSM models showed that adoption of at least one of the chemical inputs decreases volatility of crop yield output and downside risk. The results are more robust for Estonian than for Slovenian farms suggesting on possible impacts of other exogenous factors such as climate change on mitigating the crop yield downside risk.