Intercropping can enhance long-term farm economic performance: Evidence from Swedish agriculture 2001-2018

We investigate the long-term economic effects of adopting intercropping using a farm-level dataset from Sweden spanning the period 2001 to 2018. Guided by a causal model framework, specifically a causal path diagram, we apply a debiased fixed-effects method that dynamically incorporates information about past farm performance into the model estimation. We also triangulate the findings from the debiased fixed-effects method with results from both semi-parametric and instrumental variable approaches. Our baseline results indicate that adopting intercropping is associated with a 5-13 per cent increase in farm net income over the long term, with significant variations observed across different farm types. In addition, the findings show that intercropping adoption predicts an increase in the gross value of total production, labor demand and intermediate costs in the long term. Finally, the results reveal that intercropping adoption mitigates the negative effects of extreme climatic conditions on farm net income.