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Technology Adoption in the Presence of Constraints: the Case of Fertilizer Demand in Ethiopia

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Author Info

  • Andre Croppenstedt

    ()
    (ESA, Food and Agriculture Organization of the UN, Rome, Italy)

  • Mulat Demeke

    ()
    (Addis Ababa University)

  • Meloria M. Meschi
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    Abstract

    Using a nationally representative dataset, and information on why farmers did not purchase fertilizer, the authors estimate a double-hurdle fertilizer adoption model for Ethiopia. Access is an overriding constraint in four zones. Credit is shown to be a major supply-side constraint, suggesting that household cash resources are generally insufficient to cover fertilizer purchases. On the demand side, household size, formal education of the farmer, and the value-to-cost ratio have the largest impact on adoption and intensity of fertilizer use. The results underline the importance of increasing the availability of credit, developing labor markets, and reducing the procurement, marketing and distribution costs of fertilizer. The authors conclude that current large-scale transport, health, and education investment programs will positively impact smallholder productivity and household welfare. The price sensitivity of farmers suggests that an urea subsidy could be useful in redressing the nutrient imbalance currently observed in Ethiopia. Copyright Blackwell Publishing Ltd 2003

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Review of Development Economics.

    Volume (Year): 7 (2003)
    Issue (Month): 1 (February)
    Pages: 58-70

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    Handle: RePEc:bla:rdevec:v:7:y:2003:i:1:p:58-70

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    Cited by:
    1. Larson, Donald F. & Gurara, Daniel Zerfu, 2013. "A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia," Policy Research Working Paper Series 6681, The World Bank.
    2. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
    3. Ayuya, Oscar Ingasia, 2010. "Evaluation Of Willingness To Accept And Adopt Clean Development Mechanism Projects Among Smallscale Farmers In Njoro District, Kenya," Research Theses 117799, Collaborative Masters Program in Agricultural and Applied Economics.
    4. Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Poverty Status and the Impact of Formal Credit on Technology Use and Wellbeing among Ethiopian Smallholders," World Development, Elsevier, vol. 38(4), pages 541-554, April.
    5. World Bank, 2008. "Ethiopia - A Country Study on the Economic Impacts of Climate Change," World Bank Other Operational Studies 8030, The World Bank.
    6. Ndambiri, Hilary K. & Ritho, Cecilia N. & Mbogoh, Stephen G., 1. "An Evaluation Of Farmers’ Perceptions Of And Adaptation To The Effects Of Climate Change In Kenya," International Journal of Food and Agricultural Economics (IJFAEC), Niğde University, Faculty of Economics and Administrative Sciences, vol. 1.
    7. Nordhagen, Stella & Pascual, Unai, 2013. "The Impact of Climate Shocks on Seed Purchase Decisions in Malawi: Implications for Climate Change Adaptation," World Development, Elsevier, vol. 43(C), pages 238-251.
    8. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
    9. Sheahan, Megan & Ariga, Joshua & Jayne, T.S., 2013. "Modeling the Effects of Input Market Reforms on Fertilizer Demand and Maize Production: A Case Study of Kenya," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150697, Agricultural and Applied Economics Association.
    10. Rema Hanna & Sendhil Mullainathan & Joshua Schwartzstein, 2012. "Learning Through Noticing: Theory and Experimental Evidence in Farming," NBER Working Papers 18401, National Bureau of Economic Research, Inc.
    11. World Bank, 2007. "Determinants of the Adoption of Sustainable Land Management Practices and Their Impacts in the Ethiopian Highlands," World Bank Other Operational Studies 7938, The World Bank.
    12. Onyenweaku, C.E & Okoye, B.C & Okorie, K.C, 2007. "Determinants of Fertilizer Adoption by Rice Farmers in Bende Local Government Area of Abia State, Nigeria," MPRA Paper 26116, University Library of Munich, Germany.
    13. Mogues, Tewodaj & Petracco, Carly & Randriamamonjy, Josee, 2011. "The wealth and gender distribution of rural services in Ethiopia: A public expenditure benefit incidence analysis," IFPRI discussion papers 1057, International Food Policy Research Institute (IFPRI).
    14. Ariel BenYishay & A. Mushfiq Mobarak, 2013. "Communicating with Farmers through Social Networks," Working Papers 1030, Economic Growth Center, Yale University.
    15. Tavneet Suri, 2009. "Selection and Comparative Advantage in Technology Adoption," NBER Working Papers 15346, National Bureau of Economic Research, Inc.
    16. Tavneet Suri, 2006. "Selection and Comparative Advantage in Technology Adoption," Working Papers 944, Economic Growth Center, Yale University.
    17. Ayalew Ali, Daniel & Deininger, Klaus, 2012. "Causes and implications of credit rationing in rural Ethiopia : the importance of spatial variation," Policy Research Working Paper Series 6096, The World Bank.
    18. Olale, Edward & Cranfield, John A.L., 2009. "The Role of Income Diversification, Transaction Cost and Production Risk in Fertilizer Market Participation," 2009 Conference, August 16-22, 2009, Beijing, China 49929, International Association of Agricultural Economists.

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