Assessing the impact of organic farming adoption on agricultural land rent behaviour: Insights from rice farmers in Indonesia

Despite the growing body of literature on organic farming, limited evidence exists on how organic farming adoption influences farmers’ land rental intentions and decisions in developing countries. This study examined the impact of organic farming adoption on farmers’ intentions and decisions to rent out agricultural land among smallholder rice farmers in Indonesia. Survey data were collected from 405 rice farmers and analysed using a two-stage predictor substitution (2SPS) approach to address potential endogeneity issues. The first stage modelled the determinants of organic farming adoption, while the second stage examined its effects on land rental intentions and decisions using probit and ordered probit models. The results showed that organic farming adoption was positively associated with higher education, livestock ownership, and off-farm income, but negatively associated with older age, greater distance to farmland, and higher household income. The findings further revealed that organic farming adoption significantly reduced farmers’ intentions and decisions to rent out their agricultural land. Organic farmers were less likely to rent out their land than non-adopters, reflecting a stronger long-term commitment to maintaining land productivity under organic practices. This study provides new evidence on the relationship between organic farming and land rental behaviour in developing countries.