Technology adoption under seed access constraints and the economic impacts of improved pigeonpea varieties in Tanzania

Dry‐land legumes, well adapted to drought‐prone areas, have largely been neglected in the past despite the good opportunities they offer for income growth and food (and nutritional) security for the poor. This study evaluated the adoption and impact of two farmer and market‐preferred and disease‐resistant pigeonpea varieties that were developed and promoted in semi‐arid Tanzania. The new varieties were resistant to fusarium wilt, a fungal disease devastating the crop. However, farmers wanting to adopt new varieties did not adopt due to seed access constraints and under‐developed seed delivery systems. Adoption of new varieties is therefore analyzed using an augmented double hurdle model that allows estimating variety adoption conditional on seed access thresholds accounting for the additional information on sample separation. The study identifies the crucial role of seed access (local supply), extension, education, participatory decision making, capital, and household assets in determining adoption. The social economic benefits of the technology and policies for improved seed access were further analyzed using the extended economic surplus method (DREAM model). Even under restrictive assumptions, overall discounted benefits were found to be quite attractive, indicating the need for additional efforts to scale‐up the success story. Analysis of changes in research benefits from relaxing the seed access constraint showed that net gains would increase by up to 30% if farmer access to improved seeds can be assured. Smallholder farmers are the major beneficiaries along with consumers and rural net‐buyers who gain from productivity‐induced lower market prices.     

Information Barriers to Adoption of Agricultural Technologies: Willingness to Pay for Certified Seed of an Open Pollinated Maize Variety in Northern Uganda

We examine smallholder farmers’ willingness to pay for agricultural technology and whether information is a constraint to adoption of certified maize seed in Northern Uganda. The uptake of improved maize varieties by smallholder farmers in Uganda remains persistently low, despite the higher yield potential compared to traditional varieties. A recently growing body of literature identifies information constraints as a potential barrier to adoption of agricultural technologies. We used incentive compatible Becker‐DeGroot‐Marschak auctions to elicit willingness to pay for quality assured improved maize seed by 1,009 smallholder farmers, and conducted a randomised evaluation to test the effect of an information intervention on farmers’ knowledge of seed certification. Our results show that the randomised information treatment enhanced farmers’ knowledge of certified seed. However, using the information treatment as an instrumental variable for knowledge, we find no evidence of a causal effect of knowledge on willingness to pay, suggesting that even though farmers are information constrained, this constraint does not affect adoption of certified seed directly. Nevertheless, only 14% of sampled farmers were willing to pay the market price, which corresponds closely with actual observed demand for certified seed in the previous season. This suggests that there are other barriers to adoption than information and awareness.     

Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment in Germany

This paper explores farmers’ willingness to adopt genetically modified (GM) oilseed rape prior to its commercial release and estimates the ‘demand’ for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation reveals that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers’ attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non‐GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45% and 80% of the GM rent, and the deadweight loss of the monopoly would range between 15% and 30% of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non‐GM oilseed rape along the supply chain.     

Welfare impacts of maize–pigeonpea intensification in Tanzania

This article examines the driving forces behind farmers’ decisions to adopt improved pigeonpea and maize and estimates the causal impact of technology adoption on household welfare using data obtained from a random cross‐section sample of 613 small‐scale farmers in Tanzania. We use seemingly unrelated and recursive bivariate probit regressions to test the endogeneity and joint decision making of pigeonpea–maize production. A double hurdle model is used to analyze the determinants of the intensity of technology adoption conditional on overcoming seed access constraints. To address the impact of adoption on welfare, the article employs both propensity score matching and switching regression techniques. Results from bivariate probit models show that unobservable factors cause both decisions to be correlated but the finding does not support the conjecture that both decisions are made jointly. Overall the analysis of the determinants of adoption identifies inadequate local supply of seed, access to information, human capital, and access to private productive asset as key constraints for pigeonpea technology adoption. The causal impact estimation from both the propensity score matching and switching regression suggests that maize/pigeonpea adoption has a positive and significant impact on income and consumption expenditure among sample households.     

The impact of water conservation and intensification technologies: empirical evidence for rice farmers in Ghana

This study employs the propensity score matching model to examine the impact of the adoption of water conservation and intensification technologies on farm output and income among small-scale lowland rice farmers in the Northern Region of Ghana. The matching was conducted based on the Mahalanobis distance combined with the propensity score. Balancing tests by checking the mean standardized absolute bias in the matched sample were conducted as well as a sensitivity analysis was conducted to check for hidden bias due to unobservable selection. The empirical results show a positive and significant impact of the adoption of bunds technology on input demand as well as a positive but insignificant impact on output supply and net returns. Adopters of the dibbling technology were found to have higher output supply, whereas no statistically significant difference was found between the incomes of adopters and nonadopters of dibbling seed method. The results, however, reveal a positive and significant effect on output and net returns when the dibbling method is combined with intensified weeding. The estimates were found to be relatively insensitive to hidden bias.     

Why did farmers stop cultivating NERICA upland rice varieties in central Benin?

New Rice for Africa (NERICA) was developed by the Africa Rice Center by crossing high-yielding Asian rice (Oryza sativa L.) with locally adapted African rice (Oryza glaberrima Steud.). Community-based seed production of NERICA varieties was introduced in a village in central Benin in 2006 through seed dissemination projects. It was reported that high-adoption rates of these varieties were mainly due to high demand by development projects for seed dissemination, and to incentives (i.e. selling the rice seed at a higher than local market price to a local extension service) for farmers to grow NERICA varieties. A follow-up survey was undertaken after the seed dissemination projects ended to examine the change in the cultivation of NERICA varieties. About half of the farmers had ceased cultivation of NERICA varieties in 2011. The reasons for abandonment were the combined effects of reduced seed demand and low yields, which were attributed to a lack of access to credit and training on NERICA cultivation practices. The majority of the farmers did not abandon rice cultivation, but grew other high-yielding varieties, including one aromatic variety for which there was market demand. We conclude that to avoid immediate reductions in the adoption of new varieties after projects are terminated and to enhance agricultural sustainability, the varieties should be introduced in conjunction with appropriate group training on their cultivation, and the project should target farmers who do not have off-farm businesses. Furthermore, access to credit should also be enhanced, and the marketability of the varieties should be assessed.     

Farmer-to-farmer technology diffusion and yield variation among adopters: the case of improved cowpea in northern Nigeria

This article examines the magnitude and sources of yield variation among adopters of improved cowpea varieties in northern Nigeria promoted through farmer‐to‐farmer diffusion. The results reveal important efficiency differences between the lead farmers who have contacts with breeders and the follower farmers who get technology and information from the lead farmers. Differential adoption of the package of seed, insecticide, fertilizer, and recommended cereal‐cowpea cropping pattern provides much of the explanation for yield variation among adopters. The component often missing, and hence accounting for much of the yield variation, is the crop management technology relating to the cereal‐cowpea cropping pattern. No efficiency variation is attributed to the source of technology and information, such as whether improved cowpea was obtained from breeders or lead farmers. Technology source has a rather indirect influence on efficiency through its effect on package adoption where breeders promote greater package adoption among the lead farmers than the lead farmers do among the follower farmers. Possible ways of disseminating crop management technological information through the farmer‐to‐farmer technology diffusion are recommended to better exploit the yield and profitability potentials of improved cowpea varieties in northern Nigeria.     

Modern variety adoption and risk management in drought prone areas: insights from the sorghum farmers of eastern Ethiopia

Adoption rates of improved or modern varieties (MV) of sorghum in eastern Ethiopia are generally low. Although these MV may represent an effective means of coping with droughts, given their early maturing traits, landraces could prove to be more drought‐tolerant and better adapted to marginal production conditions. Whether MV adoption is a risk reducing technology is very much an empirical question which this article investigates using a unique dataset from eastern Ethiopia in a year of extreme weather conditions. Results show that risk‐factors coupled with access to markets and social capital drive farmers’ decisions to adopt MVs. On the one hand, it appears that farmers use MVs to mitigate moderate risks. On the other hand, farmers who have been most vulnerable to extreme weather events are less likely to use MVs suggesting that MV adoption does not necessarily represent an effective means of coping with drought. Finally, findings show that MV growers are more likely to be affected by sorghum failure once controlling for exogenous production factors.     

林农个体特征对信贷约束的影响分析

林权改革后林农的信贷需求旺盛,但长期以来林农一直面临着信贷约束的束缚。信贷约束由信贷供求双方的信息不对称造成,林农的个体特征对消除信息不对称,进而减弱信贷约束具有某种影响。结合2010年福建省清流县林农的调查问卷数据,文章运用相关性分析和因子分析两项计量工具对林农个体特征对信贷约束的影响进行了实证研究。研究结果表明以家庭收入和非农化程度为代表的家庭整体特征是影响林农信贷约束的首要因素,而林农林权证的拥有与森林保险的参与对减弱信贷约束具有重要作用。     

Farm demand for quality potato seed in Indonesia

Seed is the one of the most costly components of potato production in developing countries. Since potato is a vegetatively reproduced crop, diseases such as viruses build up and yield declines as tubers are saved from one harvest for use as seed the next season. Replacing farm‐saved seed with clean seed is one means to increase yield, but information asymmetry between buyers and sellers on seed quality may restrict market supply of this input. In this article we develop a model of the seed market in which clean seed is treated as a capital good providing benefits over several seasons. To determine farm demand for clean seed, we conducted a survey of 182 potato farmers in the major potato growing areas of Indonesia to elicit their perceptions of seed quality from different sources, and derive farmers' “willingness‐to‐pay” for quality potato seed. Results indicate that the effects of information asymmetry on seed supply may be partially offset by the “reputation” of specialized seed producers. Nevertheless, marginal returns to disease‐free seed appear to significantly exceed marginal costs, indicating that improving supply of quality seed will contribute strongly to productivity growth in potato. We discuss several policy options to encourage supply and utilization of quality potato seed.     

A dynamic adoption model with Bayesian learning: an application to U.S. soybean farmers

Adoption of agricultural technology is often sequential, with farmers first adopting a new technology on part of their lands and then adjusting their use of the new technology in later years based on what was learned from the initial partial adoption. Our article explains this experimental behavior by using a dynamic adoption model with Bayesian learning, in which forward‐looking farmers take account of future impacts of their learning from both their own and their neighbors’ experiences with the new technology. We apply the analysis to a panel of U.S. soybean farmers surveyed from 2000 to 2004 to examine their adoption of the genetically modified (GM) seed technology. We compare the results of the forward‐looking model to that of a myopic model, in which farmers maximize current benefits only. Results suggest that the forward‐looking model fits data better than the myopic model does. And potential estimation biases arise when fitting a myopic model to forward‐looking decision makers.     

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.     

The impact of the use of new technologies on farmers’ wheat yield in Ethiopia: evidence from a randomized control trial

In 2013, Ethiopia's Agricultural Transformation Agency introduced the Wheat Initiative to increase smallholder productivity. In this article, we measure the impacts of the Wheat Initiative package of technologies, and its marketing assistance component alone, on yields among a promotional group of farmers. The package includes improved techniques, improved inputs, and a guaranteed market for the crop. Relying on crop‐cut measures and farmers’ own assessments, we find that full package led to an average 14% higher yields. Implementation of the Wheat Initiative was successful in making certified seed and fertilizer accessible to farmers and increasing their uptake, though only 61% of the intervention group adopted row planting and few farmers received marketing assistance. The measured yield difference may underestimate the true yield difference associated with the technology because of incomplete adoption of the recommended practices by intervention farmers and adoption of some practices by control farmers.     

The impact of safety nets on technology adoption: a difference‐in‐differences analysis

This article contributes to a growing body of empirical literature relating credit constraints and incomplete insurance to investment decisions. We use panel data from rural Ethiopia to investigate whether participation in a safety net program enhances fertilizer adoption. Using a difference‐in‐differences estimator and inverse propensity score weighting, we find that participation in Ethiopia's food‐for‐work (FFW) program increased fertilizer adoption in the short run, but not in the long run. Results also indicate that the intensity of fertilizer usage increased with livestock holdings for FFW‐participant households, providing some evidence that the intervention helped asset‐rich farm households more than asset‐poor households. We find no significant effects of free distribution on fertilizer adoption or intensification. Our results are consistent with the hypothesis that safety nets can be viewed as mechanisms that allow households to take on more risk to pursue higher profits. The results highlight the importance of safety net programs, their effectiveness in ensuring farmers that they will be protected against uninsured shocks, and how that assurance can translate into productivity‐enhancing behavior.     

Supply response in Ethiopia: accounting for technical inefficiency

Few empirical studies of supply response using the profit function have accounted for technical inefficiency. Using farm‐level panel data from Ethiopia, this study examines the effect of incorporating technical inefficiency in estimating the supply response of peasant farmers. Two systems of output supply and input demand equations are estimated and compared: the conventional model in which technical efficiency is assumed and another in which technical inefficiency is explicitly incorporated. The model with technical inefficiency is preferred on grounds of theoretical consistency and improved estimates, although model comparison tests are not conclusive. Incorporation of inefficiency generally increases the magnitudes and the statistical significance of own price elasticities, substantially so in the case of fertilizer and fertilizer‐intensive crops, and alters the priority attached to nonprice factors. An important result is that only the specification with inefficiency reveals a significant effect of access to extension services on output. Only this specification finds that output increases with household size, which one expects as the farms in the sample are largely subsistence and producing for own consumption. Furthermore, the results demonstrate that farmers' response to incentives is considerably restricted by inefficiency, suggesting that the traditional model would overstate response by excluding the efficiency variable.     

Multinational supermarket chains in developing countries: does local agriculture benefit?

There is no consensus in the empirical literature on how entry of multinational supermarket chains affects farmers in developing countries. Econometric analyses struggle with causality issues and are unclear about the channel of effects. We quantify the dynamic effects of supermarket expansion on agriculture within a structural framework that clarifies the adjustment mechanisms involved. The model specification allows for endogenous interaction between agricultural productivity and supermarkets' choice of suppliers. Based on numerical simulations, two results emerge. First, we offer a possible interpretation of the conflicting evidence in the empirical literature. Whether farmers benefit from supermarkets or get stuck in a low productivity trap depends on the extent of local constraints related to production capacity and market access. Second, supply chain development initiated by supermarkets can help farmers escape the low productivity trap. While supermarkets face a short-run cost to supplier upgrading, they gradually gain from more productive local suppliers.     

Cotton farmers’ willingness to pay for pest management services in northern Benin

This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.     

Impact of conservation agriculture technology on household welfare in Zambia

This article examines the determinants and impact of conservation agriculture (CA) technology adoption on farm household welfare in Zambia. To account for selection bias from both observable and unobservable factors, an endogenous switching regression model is employed to estimate the impact of the technology on continuous outcomes like farm output, throughput accounting ratio (TAR), poverty gap, and severity of poverty. A recursive bivariate probit model is however used for the estimation of impact of adoption on a binary outcome like poverty headcount. The empirical findings demonstrate that the adoption of CA technology increases maize output, and farm TAR and reduces household poverty. Moreover, the results reveal that farmers’ years of schooling, social networks, access to credit, extension services, and machinery as well as soil quality positively influence adoption of CA technology.     

Agricultural diversification and integrated pest management in Bangladesh

We study factors associated with a shift toward diversified, high‐valued vegetable crops and the incentives associated with the use of IPM methods for vegetable producers in Bangladesh. The primary objective is to measure how IPM technologies affect the crop and technology choices of low‐income rice farmers. A three‐season household optimisation model is used to study crop and technology choice under price and yield uncertainty. The model is parameterised using data from vegetable farms and experimental IPM trials conducted in Bangladesh. Simulation results show that access to IPM technology and IPM availability combined with access to credit increase household welfare and lead to higher rates of vegetable adoption. Off‐farm employment opportunities work against vegetable cultivation and IPM use by risk‐averse farmers. Implications for policy and extension efforts are highlighted.     

Capital market imperfections in economic transition: empirical evidence from Ukrainian agriculture

This article investigates the link between financing and investment in Ukrainian agriculture during economic transition. The main contribution of the study is to provide empirical evidence for the coexistence of financial constraints and soft budget constraints (SBCs). This is of particular importance because credit constraints and SBCs have completely different economic effects. The lack of differentiation between these forms of capital market imperfections yields overlapping effects of financing on investment and may therefore cause a misinterpretation of econometric results. Our empirical analyses are based on an econometric estimation of the Euler investment equations for 529 large farms from three Ukrainian regions between 2001 and 2005. The results confirm that financial variables significantly influence farms' investment, providing empirical evidence of an imperfect capital market in Ukrainian agriculture. It turns out that credit constraints in the Ukrainian agricultural sector are more important than SBCs. We show that the estimated level of financial constraints for profitable farms with access to loans is higher if both types of capital market imperfections are appropriately distinguished.