Economic development and the role of agricultural technology

In earlier debates on economic development, the agricultural sector's role was somewhat controversial. While dualistic models highlighted the importance of agriculture, the mainstream literature placed a greater emphasis on the creation of a modern industrial sector. Soon agriculture disappeared from the mainstream development literature to re‐emerge recently with a variety of multiple‐sector growth models emphasizing the key role of agriculture and specifically technology in agriculture. This article is an empirical cross‐country analysis of agricultural technology's role in economic development. Specifically, the hypothesis being tested is whether improvements in agricultural technology have a significant impact on long‐run economic growth. The results indicate that agricultural modernization has a positive effect on both measures of economic growth and human development.     

Productivity growth and convergence in crop, ruminant, and nonruminant production: measurement and forecasts

Projections of future productivity growth rates in agriculture are an essential input for a great variety of tasks, ranging from development of an outlook for global commodity markets to the analysis of interactions between land use, deforestation, and ecological diversity. Yet solid projections for these variables have proven elusive—particularly on a global basis. This is due, in no small part, to the difficulty of measuring historical total factor productivity growth. Consequently, most productivity projections are based on partial factor productivity measures that can be quite misleading. The purpose of this work is to provide worldwide forecasts of agricultural productivity growth till the year 2040 based on the latest time series evidence on total factor productivity growth for crops, ruminants, and nonruminant livestock. The results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops. Within livestock, the nonruminant sector is expected to continue to be more dynamic than the ruminant sector. Given the rapid rates of productivity growth observed recently, nonruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries. For ruminants, the results show that productivity levels in developing countries are likely to be diverging from those in developed countries.     

Accounting for agricultural decline with economic growth in Taiwan

In this paper, we develop an empirical model to decompose the evolution of the agricultural share of GDP into three components: price changes, factor endowment changes and technological change. Our results suggest that relative prices have a positive but small influence on the share of agriculture in GDP in both the long‐run and the short‐run. An increase in capital per unit of labor, on the other hand, is associated with a smaller agricultural share. Technical change has been biased in favor of the agricultural sector but this effect has been swamped by the magnitude of the input effects, in particular, the changes in the capital‐labor ratio.     

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.     

Explaining agricultural productivity growth: an international perspective

This article presents multi-output, multi-input total factor productivity (TFP) growth rates in agriculture for 88 countries over the 1970–2001 period, estimated with both stochastic frontier analysis (SFA) and the more commonly employed data envelopment analysis (DEA). We find results with SFA to be more plausible than with DEA, and use them to analyze trends across countries and the determinants of TFP growth in developing countries. The central finding is that policy and institutional variables, including public agricultural expenditure and proagricultural price policy reforms, are significant correlates of TFP growth. The most significant geographic correlate of TFP growth is distance to the nearest OECD country.     

Decomposition of gender differentials in agricultural productivity in Ethiopia

A number of studies document gender differentials in agricultural productivity. However, they are limited to region and crop‐specific estimates of the mean gender gap. This article improves on previous work in three ways. First, data representative at the national level and for a wide variety of crops is exploited. Second, decomposition methods—traditionally used in the analysis of wage gender gaps—are employed. Third, heterogeneous effects by women's marital status and along the productivity distribution are analyzed. Drawing on data from the 2011–2012 Ethiopian Rural Socioeconomic Survey, we find an overall 23.4 percentage point productivity differential in favor of men, of which 13.5 percentage points (57%) remain unexplained after accounting for gender differences in land manager characteristics, land attributes, and access to resources. The magnitude of the unexplained fraction is large relative to prior estimates in the literature. A more detailed analysis suggests that differences in the returns to extension services, land certification, land extension, and product diversification may contribute to the unexplained fraction. Moreover, the productivity gap is mostly driven by non‐married female managers—particularly divorced women—; married female managers do not display a disadvantage. Finally, overall and unexplained gender differentials are more pronounced at mid‐levels of productivity.     

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.     

Is off-farm income reforming the farm? Evidence from Mexico

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities.     

Do stronger intellectual property rights induce more agricultural trade?: a dynamic panel data model applied to seed trade

Do stronger intellectual property rights (IPRs) induce more agricultural trade? Based on panel data for 60 countries during 1990–2000 and using a dynamic panel data model, this article assesses whether and how national differences in IPRs affect the trade flow of planting seeds imports from the United States. The empirical results show that whether or not a country adheres to IPRs agreements has no discernible impact on planting seeds that are imported from the United States, implying that the strengthening of IPRs seems not to induce more agricultural trade. This result sheds some light on the debate in the theoretical literature on the importance of IPRs and trade.     

Agricultural technology and child labor: evidence from India

Child labor continues to be a major problem in developing countries, particularly in agricultural countries. The latest ILO global report points out that nine out of every ten child laborers is involved in the agricultural sector. The focus of this article is on the rural sector in India, a country where child labor continues to be prevalent. A number of factors have been found to significantly influence the extent of child labor. This article will focus on the type of technology utilized in the agricultural sector. Technology is divided into two types: biochemical and mechanical. The empirical results indicate that biochemical technology has both positive and negative effects on child labor. However, mechanical technology is found to have a statistically significant and negative impact on child labor.     

Technological and policy options for sustainable agricultural intensification in eastern Uganda

This article presents a bio‐economic household model, which has been developed to assess the potential impacts of agricultural intensification efforts on economic and ecological indicators in eastern Uganda. A study region in the Lake Victoria Crescent was selected with comparative advantages for intensive agricultural production: high agricultural potential, high market access, and high population density. However, current production is characterized by low input–output systems revealing a discrepancy between development opportunities and actual development outcomes. Based on a farmer participatory research approach, production methods were introduced in the study region aimed at fostering sustainable agricultural development. Data from two community surveys, two comprehensive household and plot level surveys, and farm‐trial data were used to develop and calibrate bio‐economic models for four representative household types. Model scenarios reveal that farm households in eastern Uganda would not pursue sustainable intensification under current socio‐economic conditions. The market environment has to be improved substantially, i.e., transaction and transportation costs have to be reduced, innovative credit schemes for smallholders have to be introduced, and alternative forms of labor acquisition have to be promoted, to provide sufficient economic incentives for the adoption of environmentally sound production methods. In addition, agricultural service provision needs to be reformed and more agricultural research is needed for new and better‐targeted technologies.     

Impact of training on the intensification of rice farming: evidence from rainfed areas in Tanzania

Agricultural development is indispensable for poverty reduction and food security in sub‐Saharan Africa (SSA). This study investigates the impact of rice production training in a modified version of the System of Rice Intensification (SRI) on the performance of small‐scale rice farmers in a rainfed area of Tanzania. Utilizing the plot level variation, we employ propensity score matching (PSM) to assess the impact of training on technology adoption, productivity, and profitability. We also estimate a difference‐in‐differences model with plot fixed effects using recall panel data covering the periods before and after training. We found that trainees achieved an average paddy yield of 4.7 tons per hectare and rice profit of 191.5 USD per hectare on the plots where new technologies were adopted, which is higher by about 1.3–1.8 tons and 119–137 USD per hectare than on the other plots. Our study suggests the high potential of transforming favorable rainfed rice growing areas in SSA so as to achieve a rice Green Revolution through training in modern input use and improved agronomic practices.     

Subsidies and agricultural productivity in the EU

This paper investigates the relationship between EU agricultural subsidies and agricultural labor productivity growth by estimating a conditional convergence growth model. We use more representative subsidy indicators and a wider coverage (panel data from 213 EU regions over the period 2004–2014) than have been used before. We find that, on average, EU's Common Agricultural Policy (CAP) subsidies increase agricultural labor productivity growth, but this aggregate effect hides important heterogeneity of effects of different types of subsidies. The positive effect on productivity comes from decoupled subsidies, that is, Pillar I decoupled payments and some Pillar II payments. Coupled Pillar I subsidies have the opposite effect: they slow down productivity growth.     

Land titling policy and soil conservation in the northern uplands of Vietnam

In Vietnam, a quasi-private property regime has been established in 1993 with the issuance of exchangeable and mortgageable long-term land use right certificates. Using primary qualitative and quantitative data collected in a mountainous district of Northern Vietnam, this paper investigates the role of the land policy in the adoption of soil conservation technologies by farmers. This issue is of crucial importance in the region where population growth and growing market demands have induced farmers to intensify agricultural production. While poverty has been reduced, environmental problems such as soil erosion, landslides, and declining soil fertility have become more severe over the past years. Our findings suggest that despite farmers’ awareness of erosion, soil conservation technologies are perceived as being economically unattractive; therefore, most upland farmers continue to practice the prevailing erosion-prone cultivation system. Focusing on agroforestry as one major soil conservation option, we estimate household and plot-level econometric models to empirically assess the determinants of adoption. We find that the possession of a formal land title positively influences adoption, but that the threat of land reallocations in villages discourages adoption by creating uncertainty and tenure insecurity. The analyses reveal that these two effects interact with each other but are of small magnitude. We conclude that the issuance of land titles is a necessary but not sufficient prerequisite to encouraging the adoption of soil conservation practices. However, current practices remain economically unattractive to farmers. This deficiency needs to be addressed by interdisciplinary research and complemented by strong efforts by local authorities to promote sustainable land use.     

Evaluating the impact of agricultural extension on farms' performance in Crete: a nonneutral stochastic frontier approach

This article attempts to integrate the production‐ and the efficiency‐based approaches for evaluating the impact of extension on farms' performance. For this purpose the nonneutral production frontier model is used, and the empirical analysis refers to a sample of farms from Crete, Greece. The empirical results support the proposed formulation instead of either the production‐ or the efficiency‐based formulations as extension was found to have a statistically significant effect on closing both the technology and management gaps. Public and private extension services were found to be competitive in the production function and complementary in the technical inefficiency effect function. In addition, farms using both public and private extension services achieved a higher degree of technical efficiency than those using either public or private extension services, and farms with no extension services were found to be the least efficient.     

Does agricultural extension pay?

Compared to studies evaluating the benefits from agricultural research, there are relatively few empirical studies of the net economic benefits of agricultural extension, and even fewer that consider both public and private sector extension effort. In this study we examine regional differences in the adoption of lupins in Western Australia (WA) in order to estimate the net economic benefits of public and private sector extension. Impacts of extension and other variables on adoption were analysed for 40 shires using multivariate regression analysis. The results suggest that both public and private extension activities influenced farmer uptake of lupins, particularly by bringing forward the start time of the diffusion curve. Economic benefits of extension, based on the statistical analysis, were combined with costs of extension estimated from public sector records and surveys of private sector extension agents and used to estimate the net present value of extension investments by the public and private sectors in the study area.     

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.     

Markets and pro-poor agricultural growth: insights from livelihood and informal rural economy models in Malawi

This article presents the development of a set of programming models describing the major features of different rural livelihoods and of the informal rural economy they together make up in Malawi. The models allow for differentiated responses by different household types to change and for the partial equilibrium effects of consequent supply, demand, and price adjustments in labor and grain markets. The models provide insights into the relations between own‐farm and nonown‐farm activities in different households' livelihoods and in the informal rural economy as a whole, and are used to investigate possible impacts of increasing cash crop prices and of a more open rural economy. Impacts of these changes on the poor are found to be critically dependent upon supply and demand elasticities in labor and grain markets, but the poor could potentially suffer significant losses from increased openness of the local economy leading to increased expenditure by less poor households on imported goods and services.