Understanding Crop Decision-Making Dilemma of Farmers Through Prisoner’s Dilemma Construct

Background

Farmers in rainfed areas face a hard choice, especially in the rabi season. Choice of which crop to sow and what practices to adopt. The water for irrigation is limited. Often, the choices farmers make depend on their past understanding of what other farmers would do (when sharing a common resource for surface irrigation source). Similarly, a choice is to be made for groundwater use, especially in areas with limited groundwater potential such as large areas of Deccan, where water depth could fluctuate rapidly depending on the extraction. In the following explanation of the application of the game theory construct of Prisoner’s Dilemma, we would restrict to a single source of irrigation to comprehend what factors influence the behaviour of farmers.?

The article also attempts to identify circumstances that may lead decision-making towards “Maximum Output” from “Nash Equilibrium” i.e. to a set of actions where no player (farmer in this case) can improve their payoffs by changing strategies to maximum collective gain. ??

Construct

Theory: Prisoner’s Dilemma is a game that describes a situation where players have competing incentives. Two prisoners are tried for the crime. The agency has evidence of a small crime, but evidence of a larger one needs to be confirmed. Both are put in separate cells, and each is given the choice to face a larger term in prison or to confess, share information and be the informer. Each of them faces the dilemma (a) accepting the crime or not (b) both are unaware of the other’s action. Action or approval by the other would determine their sentence. Each can turn approver and avoid severe punishment if the other does not. ?

Construct: A similar situation is constructed around water use in agriculture. A situation where wells of two households get recharged from a single source- a water tank. Assuming there is no other source for irrigation and wells capture percolation from a single source. The water in the source is only sufficient to irrigate 4 acres of water-guzzling crops (Crop 1) or 8 acres of non-water-guzzling crops (Crop 2). The water requirement of the water-guzzling crop is twice that of the other. Assuming each household has an equal size of land holdings (say 4 acres). During the sowing time, both the farmers face the same decision to make- to cooperate or not. The payoff depends on the cost of inputs, yield and selling price. Assuming all these variables to be constant for both the farmers for each of the two crops. However, the variables differ for the two crops. The following table describes the payoff from the two crops:

?Payoffs

To maximise the return, each farmer would try to put the maximum area under crop 1. However, the return would depend on the decision other farmers take. As a lack of water for irrigation would mean low or no yield, the cost of input would have already been incurred. This non-cooperation play-off would lead to recurrent losses for both the farmers unless they experimentally reach Nash Equilibrium when each one realises that exact norm for the area under crop 1. Each farmer adheres to it in the interest of both and no individual deviates from it. However, this situation is only theoretical as other variables such as rainfall and soil moisture regime would distort the information with the farmer and may lead to strategy deviation. Another strategy could be to only go for crop 2. But as is often seen, farmers do change their strategy towards sowing better-paying crops.

The chart below shows various choices options both the farmers have. The payoffs are far from optimal without cooperation.

(Figures in the box denote the area under irrigation in acres)

?Only when both were restricted to crop 2 would their total land holding be cultivated? The strategy of the conservative approach (if I may call so) may yield returns even if there is non-cooperation i.e. information regarding crop choice and area under cultivation under each crop is not shared. But this does not seem to be the rational choice as one would aim at maximising return.

In a cooperative model (where information is shared), each farmer would maximise the returns if crop selection were made collectively. This could be made by putting the equal area under crop 1 according to the water availability or taking benefits in alternative years.?

Profit maximisation would be reached when, in tandem, each farmer puts 2 and 4 acres of land under crop 1 and crop 2 alternatively. But this condition cannot be reached automatically. There are preconditions that in a larger context (multiple farmers sharing a common water resource) would enable collective and informed decision-making towards maximising collective returns. Cooperation, trust, purpose and threat are important behavioural aspects determining the play-offs.

?

SHGs and Agriculture Cooperatives are best suited to provide enables for adopting water-sharing mechanisms

The PD construct (explained above) suggests the need for continuous interaction between the players to be key. Self Help Groups (SHGs) or Agriculture Cooperatives provide the following enablers for farmers to adopt water-efficient cultivation practices:

·?????? Perpetuity (as the purpose could not be achieved in a short time frame)

·?????? Platform (to discuss at frequent intervals)

·?????? Association (beyond the current need)

·?????? Sync (with overall objectives of its members)

·?????? Stakes (high beyond immediate returns)

??