Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia

Tigist Mekonnen Melesse
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Tigist Mekonnen Melesse: PhD fellow, UNU-MERIT, Maastricht

No 2015/06, Working Papers from Maastricht School of Management

Abstract: Adoption of improved agricultural technologies is central to transformation of farm- ing system and a path out of poverty in developing countries. The aim of the current study is to provide empirical evidence on the impact of improved agricultural technolo- gies (HYVs and chemical fertilizer) on smallholders' output market participation. The analysis is based on Farmer Innovation Fund (FIF) impact evaluation survey data cov- ering around 2,675 households collected by the World Bank in 2010-2013 in Ethiopia. Endogenous treatment e ect and sample selection models are employed to account for the self-selection bias in technology adoption and market participation. Regressions based on matching techniques are employed for robustness check. The main results shows that adoption of improved high-yielding varieties (HYVs) and chemical fertilizer is found to have a positive and robust e ect on smallholders' marketed surplus. We found evidence that adoption of improved HYVs increases surplus crop production by 757 kg, whereas adoption of chemical fertilizer increases surplus by 285 kg. When the two technologies are adopted jointly, marketed surplus is found to increases by 635 kg, which establishes the complementarity of the two technologies. The result also shows that farmers' surplus crop production and market participation is deter- mined by access to modern inputs, cereal crop price, farm size, availability of labor, and infrastructure facility. Access to credit and training fosters technology adoption, however, we are unable to witness learning externality from neighbors on smallholders marketed surplus. Therefore, agriculture and rural development policy needs to focus on supporting agricultural technology adoption.

Keywords: Smallholders; market participation; technologies; treatment e ect model (search for similar items in EconPapers)
JEL-codes: D04 O12 Q13 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015-09
New Economics Papers: this item is included in nep-agr, nep-dev and nep-ino
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Citations: View citations in EconPapers (5)

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