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Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya

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  • Ogutu, Sylvester O.
  • Okello, Julius K.
  • Otieno, David J.
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    Abstract

    Information asymmetry has traditionally constrained smallholder farmers’ access to markets. Past studies indicate that it inhibits adoption of modern technologies that have the capacity to enhance productivity of smallholder farms. Hence, farm productivity and agricultural transformation has been stifled, leaving smallholder famers in grinding poverty. Improved smallholder farmers’ access to markets via the recent Information and Communication Technology (ICT) platforms could reverse this scenario. This study uses Propensity Score Matching (PSM) technique to evaluate the impact of participation in an ICT-based market information service (MIS) project on farm input use and productivity in Kenya. It finds strong empirical evidence on the benefits of ICT use in market linkage. Specifically, it finds that participation in the ICT-based MIS project has positive and significant impact on the usage of improved seeds and fertilizers. It also improves land and labour productivity, but has negative and significant impact on the usage of hired and family labour. These findings have vital policy implications on the use of ICT tools as a development strategy.

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    Bibliographic Info

    Paper provided by African Association of Agricultural Economists (AAAE) in its series 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia with number 157770.

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    Date of creation: Sep 2013
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    Handle: RePEc:ags:aaae13:157770

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    Postal: c/o FORMAT, 5th Floor, Muthaiga Mini Market, Limuru Road, P.O. Box 79 - 00621 Village Market, Nairobi, Kenya
    Phone: 254 20 6752866
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    Web page: http://www.aaae-africa.org
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    Related research

    Keywords: ICT; Impact assessment; PSM; Market Access; Input Use; Productivity; Crop Production/Industries; Production Economics; Research and Development/Tech Change/Emerging Technologies;

    This paper has been announced in the following NEP Reports:

    References

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    1. Ruttan, Vernon W. & Hayami, Yujiro, 1971. "Technology Transfer And Agricultural Development," Staff Papers 13993, University of Minnesota, Department of Applied Economics.
    2. Hayami, Yujiro & Ruttan, Vernon W., 1971. "Induced Innovation And Agricultural Development," Staff Papers 13967, University of Minnesota, Department of Applied Economics.
    3. Kizito, Andrew M., 2009. "Estimating the Benefits from Improved Market Information," Graduate Research Masters Degree Plan B Papers 48844, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Marco Caliendo & Sabine Kopeinig, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," Discussion Papers of DIW Berlin 485, DIW Berlin, German Institute for Economic Research.
    5. Okello, Julius Juma, 2010. "Does use of ICT-based market information services (MIS) improve welfare of smallholder farm households: Evidence from Kenya," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61251, Agricultural and Applied Economics Association.
    6. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
    7. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
    8. Becerril, Javier & Abdulai, Awudu, 2010. "The Impact of Improved Maize Varieties on Poverty in Mexico: A Propensity Score-Matching Approach," World Development, Elsevier, vol. 38(7), pages 1024-1035, July.
    9. Hujer, Reinhard & Caliendo, Marco & Thomsen, Stephan L., 2004. "New evidence on the effects of job creation schemes in Germany--a matching approach with threefold heterogeneity," Research in Economics, Elsevier, vol. 58(4), pages 257-302, December.
    10. Akhter Ali & Awudu Abdulai, 2010. "The Adoption of Genetically Modified Cotton and Poverty Reduction in Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 175-192.
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