The promise (and pitfalls) of ICT for agriculture initiatives

The widespread growth of information and telecommunication technologies (ICTs) in rural areas of developing countries offers new opportunities to provide more timely and low‐cost information services to farmers, as well as assist in coordinating agricultural agents. Over the past decade, the number of public and private sector initiatives in this space has increased substantially, with over 140 deployments worldwide in 2015. While there is substantial potential for such services to address farmers’ and traders’ information and credit market constraints, economic research suggests that the impacts of such services on agricultural adoption, behavior and welfare is mixed. While this can, in part, be explained by the degree of the information asymmetry and the presence of other market failures in different contexts, research from other disciplines provides additional insights into these findings. In particular, work in the domain of human–computer interaction (HCI) focuses heavily on users’ interaction and experience with a given technology, thus explaining why users may not fully engage with ICT‐based agricultural interfaces. Furthermore, sociological and anthropological approaches study the provision of information and trust and how these may be altered by ICT platforms. Drawing upon these disciplines, we suggest that future ICT for agriculture initiatives should first seek to better understand the information and complementary market failures in a given context, in order to better understand whether information is a binding constraint. Second, even if information is missing, the information services provided should be of high quality and from a trusted source, which can be a challenge with some ICT platforms. Finally, such services should be delivered via platforms that build upon local ICT access and usage, paying particular attention to the gender digital divide.     

ICT and agricultural productivity: evidence from cross-country data

This article carries out agricultural production function estimations, based on data for the period 1995–2000 on 81 countries, to present empirical evidence on the relationship between the adoption of information and communication technology (ICT) and agricultural productivity. It is found that new ICT has a significantly positive impact on agricultural productivity. The evidence suggests that the adoption of modern industrial inputs in agricultural production relies on the information and communication infrastructure. However, the empirical evidence from this study also suggests that new ICT could be a factor for the divergence between countries in terms of overall agricultural productivity. Not only do we find that the ICT adoption levels of the richer countries are much higher than those of the poorer countries, but also that returns from ICT in agricultural production of the richer countries are about two times higher than those of the poorer countries. A plausible explanation for the poorer countries' relatively low productivity elasticity of ICT is the lack of important complementary factors, such as a substantial base of human capital.     

Technology adoption,impact, and extension in developing countries’ agriculture: A review of the recent literature

Given the stagnant agricultural productivity and persistent food insecurity in low-income countries—notably in sub-Saharan Africa (SSA)—there has been continued interest in the adoption of new technology and its impact on productivity in these regions. To increase crop yields and sustain yield gains, recent case studies of technology adoption unanimously recommend the adoption of integrated farm management systems, particularly in SSA. On the other hand, there have been increasing numbers of studies on social network or farmer-to-farmer technology extension. These studies explore more efficient extension systems than traditional public-sector extension approaches. This article reviews both recent case studies of technology adoption and its productivity impacts as well as studies on agricultural extension to identify common findings, shortcomings, and major remaining issues.     

Adoption of climate‐smart practices and its impact on farm performance and risk exposure among smallholder farmers in Ghana

Increased climate variability during the last four decades has made the agricultural environment in many developing countries more uncertain, resulting in increasing exposure to risk when producing crops. In this study, we use recent farm‐level data from Ghana to examine the drivers of individual and joint adoption of crop choice and soil and water conservation practices, and how adoption of these practices impacts on farm performance (crop revenue) and exposure to risks (skewness of crop yield). We employ a multinomial endogenous switching regression model to account for selectivity bias due to both observable and unobservable factors. The empirical results reveal that farmers’ adoption of crop choice and soil and water conservation leads to higher crop revenues and reduced riskiness in crop production, with the largest impact on crop revenues coming from joint adoption. The findings also show that education of the household head, access to extension and weather information influence the likelihood of adopting these practices. Thus, enhancing extension services and access to climate information and irrigation can reduce gaps in adoption of soil and water conservation and crop choice, considered as climate‐smart practices that will eventually improve crop revenues and reduce farmers’ exposure to climate‐related production risks.     

Payments for environmental services to promote “climate‐smart agriculture”? Potential and challenges

Payments for environmental services (PES) have gained wide popularity as approaches to promote environmentally friendly land use or agricultural production practices. Yet academics have also voiced concerns against seeing PES as a panacea. This article discusses whether PES is an appropriate and promising approach to promote so‐called “climate‐smart agriculture” (CSA) practices, which we define as agricultural production practices that contribute to CO₂ emission reductions and/or removals and provide benefits to farmers via increased productivity and profits and reduced vulnerability to climate change. PES appears most promising for the promotion of CSA practices in small‐scale farming contexts with low incomes. Effective design, however, requires solid estimates of cost and benefit flows from CSA adoption over time, accounting for differences in socioeconomic and ecological conditions, and addressing the risk of leakage. Funding for such PES will likely have to come from public sources, and seems most promising where synergies with other objectives such as agricultural development, food security, and climate adaptation or other environmental services exist. The potential of alternative approaches for CSA support such as taxation with rebates for CSA practices, CSA‐related investment support such as microcredits, and hybrid approaches such as conditional microcredit should be further investigated.     

Mobile money,agricultural marketing,and off‐farm income in Uganda

Mobile money (MM) services can contribute to welfare gains in smallholder farm households. Previous research showed that one important pathway for these MM‐related welfare gains is through higher remittances received from relatives and friends. Here, the role of other impact pathways is examined, especially focusing on agricultural marketing and off‐farm economic activities. The analysis builds on panel data from smallholder coffee farmers in Uganda. Regression models show that the adoption of MM technology has contributed to higher household incomes and consumption levels. Off‐farm income gains are identified to be an important pathway, also beyond remittances. Typical off‐farm income sources are small businesses in trade, transport, and handicrafts, which benefit from novel savings and money transfer opportunities through MM. In terms of agricultural marketing, MM users sell a larger proportion of their coffee as shelled beans to buyers in high‐value markets, instead of selling to local traders immediately after harvest. MM services help to reduce cash constraints and facilitate transactions with buyers from outside local regions. In conclusion, MM can contribute to rural development through various important pathways. Analysis of adoption patterns suggests that MM services are socially inclusive.     

A review of the economic impact of malaria in agricultural development

This paper surveys the linkages between malaria and agriculture, focusing on the economic impacts of the disease. We adopt Negin's (2005) conceptual framework to examine the potential impacts of malaria in the agricultural sector, including both direct and indirect impacts. In addition to health care costs, malaria causes loss of agricultural labor and slows adoption of improved practices in agriculture. Furthermore, some agricultural practices and development interventions are known to facilitate the spread of malaria, exacerbating its impacts. Given the importance of both agriculture and malaria in developing countries, especially in Africa, the interaction between them could be a significant factor in economic growth. The review identifies gaps in past research on this topic. A better understanding of malaria's impact on agricultural productivity, coupled with efforts to strengthen capacity to deal with malaria, would enhance policies and programs aimed at combating malaria and curbing its impacts on agricultural productivity.     

Analyzing technology adoption using microstudies: limitations, challenges, and opportunities for improvement

Policy makers and interest groups have many questions about the use of improved technologies in developing country agriculture. These include the roles of policies, institutions, and infrastructure in the adoption of improved technologies and their impact on productivity and welfare. Most micro‐level adoption studies, however, cannot address these important policy issues. Drawing on an extensive review of the literature on the adoption of agricultural technologies, this article suggests alternative approaches for designing technology adoption studies to make them useful for policy makers. It explores the generic limitations of cross‐sectional adoption studies carried out in small numbers of communities and discusses some problems faced in conducting such studies. Recommendations include the use of sampling approaches that allow data from microstudies to be generalized to higher levels of aggregation, adherence to clearly defined terms that are standardized across studies, and careful examination of the assumptions that often underlie such studies.     

Extension services,product quality and yields: the case of grapes in Argentina

This article studies the impact of publicly subsidized agricultural extension services on yields and product quality. We use panel data from grape producers in Mendoza, Argentina to estimate the impacts of farmer trainings. We find a negative overall impact on yields and evidence of a positive average impact on the adoption of higher‐quality grape varieties. By analyzing the dynamic pattern of the estimated effects, we find evidence of a temporary decrease in yields suggesting the existence of an adjustment process following the introduction of higher‐quality grapes. The overall negative effect on yield is driven by a sharp drop in the year of participation. This fades after year one, and two to three years after treatment we observe increases in higher‐quality grape production. Findings reinforce the importance of temporal dimension of extension services.     

Adoption and welfare impacts of multiple agricultural technologies: evidence from eastern Zambia

Using plot level panel data and multinomial endogenous switching regression, this article analyzes the adoption and welfare impacts of multiple agricultural technologies in eastern Zambia. We adapt a multinomial endogenous switching/treatment effect regression framework to correct for selection bias and endogeneity originating from both observed and unobserved heterogeneity. Results indicate that joint adoption of multiple agricultural technologies had greater impacts on crop yields, household incomes, and poverty than the adoption of individual components of the technology package. Our findings suggest that efforts aimed at raising household incomes and reducing poverty should focus on promoting the adoption of multiple agricultural technologies through provision of improved support services such as extension and input supply.     

Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system

Many governments in developing countries distribute fertilizer at subsidized prices in an effort to stimulate small farmers' agricultural productivity and food security. Prior fertilizer demand studies have largely failed to account for the effects of government programs on farmers' commercial purchases. Using a double hurdle model and nationally representative rural household panel data in Zambia, we distinguish between these sources and measure the contemporaneous "crowding in" and "crowding out" effects of government input programs on commercial fertilizer sales. Where the private sector is relatively active and average wealth is higher (areas seemingly more likely to be targeted by government programs), results indicate that subsidies have substantially crowded out the private sector, in some cases to the point that such programs could actually lower overall fertilizer use. On the other hand, in poorer areas where the private sector is relatively inactive, subsidies help to generate demand and crowd in private sector retailers. Empirical studies explicitly modeling farmers' fertilizer purchase behavior within a dual marketing framework can provide important insights for agricultural policy discussions in developing countries.     

Will the TRIPS Agreement Foster Appropriate Biotechnologies for Developing Countries?

While almost all of the investment in agricultural biotechnology to date has been in temperate crops suitable for developed countries, developing countries are the greatest potential beneficiaries of this major technological advance. To realise this potential requires investment in crops appropriate to climatic and agronomic conditions in developing countries. Protection of intellectual property rights is a necessary condition for the private sector to invest in appropriate biotechnologies. This paper develops a game theoretic model of a bioscience firm that adapts a new technology to a range of agronomic conditions in response to the enforcement of intellectual property rights in a developed and a developing country. Over a range of potential penalties, low levels of enforcement by the developing country remain endemic despite the desire to have the bioscience firm adapt the biotechnology to its local conditions. In particular, the trade penalties contained in the Agreement on Trade‐Related Aspects of Intellectual Property Rights are likely to be ineffective. The developing country might increase enforcement if the developed country was more aggressive in liberalising agriculture trade because there would be greater symmetry in the benefits of the technology.     

Food Price Pass‐Through and the Role of Domestic Margin Services

The recent volatility in international agricultural markets has drawn attention to the impact of rising international agricultural prices and the induced price‐insulating measures on consumer food prices. Analyses based on simulation models on this topic typically ignore the role of domestic margin services. We extend the standard Global Trade Analysis Project (GTAP) model to allow for variations in the share of domestic margin services in consumed food across countries. This approach enables us to differentiate consumer prices from producer prices. Following the extension, the results show that domestic margin services reduce the consumer food price volatility for all countries, especially in high‐income countries, where the share of domestic margin services in final food consumption is higher. The effect of price‐insulating border policies is also reduced in the extended model. We find that our extension of the GTAP model greatly improves simulations of the 2007 surge in international agricultural prices. We validate our extension of the GTAP model by showing that the econometrically estimated food price pass‐through is decreasing with income and thus, is smaller in high‐income countries.     

Understanding the adoption of climate change adaptation strategies among smallholder farmers: Evidence from land reform beneficiaries in South Africa

Climatic change has a negative impact on people’s livelihoods, agriculture, freshwater supply and other natural resources that are important for human survival. Therefore, understanding how rural smallholder farmers perceive climate change, climate variability, and factors that influence their choices would facilitate a better understanding of how these farmers adapt to the negative impacts of climate change. A Zero-inflated double hurdle model was employed to estimate the factors influencing farmers’ adoption of adaptation strategies and intensity of adoption at the household level in South Africa. Different socioeconomic factors such as gender, age, and experience in crop farming, institutional factors like access to extension services, and access to climate change information significantly influenced the adoption of climate change adaptation strategies among beneficiaries of land reform in South Africa. Concerning intensity of adoption, age, educational level, farming experience, on-farm training, off-farm income, access to information through ICT and locational variables are the significant determinants of intensity of adaptation strategies. Thus, education attainment, non-farm employment, farming experience are significant incentives to enhance smallholder farmers' adaptive capacity through the adoption of many adaptation approaches. This study therefore concluded that farm-level policy efforts that aim to improve rural development should focus on farmers’ education, on-farm demonstration and non-farm employment opportunities that seek to engage the farmers, particularly during the off-cropping season. The income from non-farm employment can be plough-back into farm operations such as the adoption of soil and water conservation, use of improved planting varieties, insurance, among others to mitigate climate variability and subsequently increase productivity. Policies and investment strategies of the government should be geared towards supporting education, providing on-farm demonstration trainings, and disseminating information about climate change adaptation strategies, particularly for smallholder farmers in the country. Thus, the government, stakeholders, and donor agencies must provide capacity-building innovations around the agricultural extension system and education on climate change using information and communication technologies.     

Land expansion and growth in low‐ and middle‐income countries*

Over past decades, low and middle‐income countries have experienced considerable expansion of agricultural land, yet this effect on growth has not been examined The following paper shows that the Solow‐Swan growth model can be extended to the case whereby arable land is expanding, as originally suggested by Solow (1956). This extension indicates that land expansion boosts growth, and this effect increases with the relative share of land in income. An empirical analysis over 1990–2018 for 138 low and middle‐income countries supports this finding. The growth impact of land expansion over 1990–2018 varied significantly across the sample of countries depending on how much income was derived from land. This result explains why countries dependent on agriculture have engaged in extensive land expansion: it boosts overall growth. However, these growth benefits must be weighed against the considerable environmental costs of converting forests and other natural habitat to more agricultural land, such as increased carbon emissions, loss of ecosystem services and biodiversity, risk of disease, and impacts on local livelihoods.     

Will digital technologies transform agriculture in developing countries?

Mobile phones and the internet have significantly affected practically all sectors of the economy and agriculture is no exception. Building on a recent World Bank flagship report, this article introduces a concise framework for describing the main benefits from new information and communication technologies. They promote greater inclusion in the broader economy, raise efficiency by complementing other production factors, and foster innovation by dramatically reducing transaction costs. The article reviews the recent literature on corresponding technology impacts in the rural sector in developing countries. Digital technologies overcome information problems that hinder market access for many small‐scale farmers, increase knowledge through new ways of providing extension services, and they provide novel ways for improving agricultural supply chain management. While there are many promising examples of positive impacts on rural livelihoods—or “digital dividends”—these have often not scaled up to the extent expected. The main reason is that technology can always only address some, but not all of the barriers faced by farmers in poorer countries.     

Information,efficiency, and welfare in agricultural markets

Information and communications technologies (ICTs) have spread rapidly in the developing world. There has been considerable interest in the potential role ICTs, particularly mobile phones, have begun to play in the marketing of agricultural outputs in these countries. In this article, we discuss the potential impacts ICTs may have on welfare, both in terms of potential efficiency gains (via improved arbitrage), and welfare transfers among agents in the supply chain (via reduced informational asymmetries and market power). We also review the recent empirical evidence for such effects.     

The impact of strengthening agricultural extension services on women farmers: Evidence from Ethiopia

This paper evaluates the effect of the Rural Capacity Building Project (RCBP), which aimed at promoting growth by strengthening the agricultural service systems in Ethiopia, and by making them more responsive to smallholders’ needs, in particular women farmers. We examine the gender‐differentiated impact of the RCBP using panel data on 1,485 geographically dispersed households in project and control kebeles. We find that women farmers’ access and satisfaction with extension services increased significantly immediately after the start of the project, but that effect did not last into the medium term. The project led to an increase in the adoption of high‐value crop farming, area of land cultivated, and economic participation of household members, benefiting male‐ and female‐headed households equally. Results point to the positive impact of incorporating women's needs and constraints in the design of the agricultural extension system. However, the project was not able to reduce the preexisting gender gap in agricultural outcomes.     

How does gender affect the adoption of agricultural innovations?

Why do men and women adopt agricultural technologies at different rates? Evidence from Ghana suggests that gender‐linked differences in the adoption of modern maize varieties and chemical fertilizer result from gender‐linked differences in access to complementary inputs. This finding has important policy implications, because it suggests that ensuring more widespread and equitable adoption of improved technologies may not require changes in the research system, but rather introduction of measures that ensure better access for women to complementary inputs, especially land, labor, and extension services.