IDEAS home Printed from https://ideas.repec.org/a/eee/teinso/v63y2020ics0160791x20300105.html
   My bibliography  Save this article

Socio-economic analysis of farmers facing asymmetric information in inputs markets: evidence from the rainfed zone of Pakistan

Author

Listed:
  • Ullah, Ayat
  • Arshad, Muhammad
  • Kächele, Harald
  • Zeb, Alam
  • Mahmood, Nasir
  • Müller, Klaus

Abstract

Information asymmetry plays an important role in the non-adoption of modern agricultural inputs like improved seeds, pesticides and fertilizers etc. Therefore, this study investigated the role of farmers’ socio-economic attributes and farm level characteristics in avoiding asymmetry of information in agricultural input markets (i.e. exaggerated prices and low quality). The approach captures the farm level heterogeneity and complexity that may help the authorities in strengthening existing market regulations to control price and quality disparities. We analysed 395 randomly selected farm households using multinomial logit model. We found that farmers with large landholding size are less likely to face quality and more likely to face price information asymmetry. Farmers with higher education, more physical assets and better access to other sources of information are less likely to face both quality and price information asymmetry. Borrowers as compared to purchasers are more likely to face information asymmetry on prices of agricultural inputs. Non-adopters of improved agricultural technologies are more suspicious of information asymmetry than adopters. The paper thus provides evidence that the socio-economic dynamics of information asymmetry can have an important influence on wide spread adoption of technology. Paying more attention to farm level heterogeneity and complexity would help to develop general market management plan and improve the adoption of technology by farmers.

Suggested Citation

  • Ullah, Ayat & Arshad, Muhammad & Kächele, Harald & Zeb, Alam & Mahmood, Nasir & Müller, Klaus, 2020. "Socio-economic analysis of farmers facing asymmetric information in inputs markets: evidence from the rainfed zone of Pakistan," Technology in Society, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:teinso:v:63:y:2020:i:c:s0160791x20300105
    DOI: 10.1016/j.techsoc.2020.101405
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0160791X20300105
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techsoc.2020.101405?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zulfiqar, Farhad & Thapa, Gopal B., 2017. "Agricultural sustainability assessment at provincial level in Pakistan," Land Use Policy, Elsevier, vol. 68(C), pages 492-502.
    2. Ullah, Ayat & Arshad, Muhammad & Kächele, Harald & Khan, Ayesha & Mahmood, Nasir & Müller, Klaus, 2020. "Information asymmetry, input markets, adoption of innovations and agricultural land use in Khyber Pakhtunkhwa, Pakistan," Land Use Policy, Elsevier, vol. 90(C).
    3. Braunerhjelm, Pontus, 2010. "Entrepreneurship, Innovation and Economic Growth – Past experiences, current knowledge and policy implications," Working Papers 2010:2, Swedish Entrepreneurship Forum.
    4. Bekele Shiferaw & Tewodros Kebede & Menale Kassie & Monica Fisher, 2015. "Market imperfections, access to information and technology adoption in Uganda: challenges of overcoming multiple constraints," Agricultural Economics, International Association of Agricultural Economists, vol. 46(4), pages 475-488, July.
    5. Rodney D. Ludema & Taizo Takeno, 2007. "Tariffs and the adoption of clean technology under asymmetric information," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1100-1117, November.
    6. Sinyolo, Sikhulumile, 2020. "Technology adoption and household food security among rural households in South Africa: The role of improved maize varieties," Technology in Society, Elsevier, vol. 60(C).
    7. Arundina, Tika & Azmi Omar, Mohd. & Kartiwi, Mira, 2015. "The predictive accuracy of Sukuk ratings; Multinomial Logistic and Neural Network inferences," Pacific-Basin Finance Journal, Elsevier, vol. 34(C), pages 273-292.
    8. Nkomoki, William & Bavorová, Miroslava & Banout, Jan, 2018. "Adoption of sustainable agricultural practices and food security threats: Effects of land tenure in Zambia," Land Use Policy, Elsevier, vol. 78(C), pages 532-538.
    9. Nancy Chau & Hideaki Goto & Ravi Kanbur, 2016. "Middlemen, fair traders, and poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 81-108, March.
    10. Guta, Dawit Diriba, 2020. "Determinants of household use of energy-efficient and renewable energy technologies in rural Ethiopia," Technology in Society, Elsevier, vol. 61(C).
    11. Ashfaq Ahmad Shah & Jingzhong Ye & Muhammad Abid & Jahangir Khan & Syed Muhammad Amir, 2018. "Flood hazards: household vulnerability and resilience in disaster-prone districts of Khyber Pakhtunkhwa province, Pakistan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 93(1), pages 147-165, August.
    12. Makate, Clifton & Makate, Marshall, 2019. "Interceding role of institutional extension services on the livelihood impacts of drought tolerant maize technology adoption in Zimbabwe," Technology in Society, Elsevier, vol. 56(C), pages 126-133.
    13. Nasir Mahmood & Muhammad Arshad & Harald Kaechele & Muhammad Faisal Shahzad & Ayat Ullah & Klaus Mueller, 2020. "Fatalism, Climate Resiliency Training and Farmers’ Adaptation Responses: Implications for Sustainable Rainfed-Wheat Production in Pakistan," Sustainability, MDPI, vol. 12(4), pages 1-21, February.
    14. Paudel, Gokul & Koirala, Krishna & KC, Dilli & Rahut, Dil, 2019. "Smallholder Farmers' Demand for Farm Mechanization in the Mid-hills of Nepal," 2019 Annual Meeting, February 2-5, 2019, Birmingham, Alabama 284314, Southern Agricultural Economics Association.
    15. Elahi, Ehsan & Abid, Muhammad & Zhang, Liqin & ul Haq, Shams & Sahito, Jam Ghulam Murtaza, 2018. "Agricultural advisory and financial services; farm level access, outreach and impact in a mixed cropping district of Punjab, Pakistan," Land Use Policy, Elsevier, vol. 71(C), pages 249-260.
    16. Bekele Shiferaw & Julius Okello & Ratna Reddy, 2009. "Adoption and adaptation of natural resource management innovations in smallholder agriculture: reflections on key lessons and best practices," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 11(3), pages 601-619, June.
    17. Arega, D.A. & Manyong, Victor M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, George D., 2008. "Smallholder marketed surplus and input use under transactions costs: maize supply and fertilizer demand in Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52074, African Association of Agricultural Economists (AAAE).
    18. Paudel, Gokul P. & KC, Dilli Bahadur & Rahut, Dil Bahadur & Khanal, Narayan P. & Justice, Scott E. & McDonald, Andrew J., 2019. "Smallholder farmers' willingness to pay for scale-appropriate farm mechanization: Evidence from the mid-hills of Nepal," Technology in Society, Elsevier, vol. 59(C).
    19. George W. Norton & Jeffrey Alwang, 2020. "Changes in Agricultural Extension and Implications for Farmer Adoption of New Practices," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(1), pages 8-20, March.
    20. Kafouros, Mario & Wang, Chengqi & Piperopoulos, Panagiotis & Zhang, Mingshen, 2015. "Academic collaborations and firm innovation performance in China: The role of region-specific institutions," Research Policy, Elsevier, vol. 44(3), pages 803-817.
    21. Kebebe, E., 2019. "Bridging technology adoption gaps in livestock sector in Ethiopia: A innovation system perspective," Technology in Society, Elsevier, vol. 57(C), pages 30-37.
    22. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    23. Muriu-Ng’ang’a, F.W. & Mucheru-Muna, M. & Waswa, F. & Mairura, F.S, 2017. "Socio-economic factors influencing utilisation of rain water harvesting and saving technologies in Tharaka South, Eastern Kenya," Agricultural Water Management, Elsevier, vol. 194(C), pages 150-159.
    24. Awudu Abdulai & Pierre Monnin & Jacques Gerber, 2008. "Joint estimation of information acquisition and adoption of new technologies under uncertainty," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(4), pages 437-451.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rashid Latief & Lei Zhang, 2024. "Nexus between government agricultural expenditures and agricultural credit: The role of sustainable agricultural growth and sustainable agricultural income," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3344-3355, August.
    2. Ayat Ullah & Nasir Mahmood & Alam Zeb & Harald Kächele, 2020. "Factors Determining Farmers’ Access to and Sources of Credit: Evidence from the Rain-Fed Zone of Pakistan," Agriculture, MDPI, vol. 10(12), pages 1-13, November.
    3. Ifeanyi Mbukanma & Vikela Liso Sithole & Yiseyon Sunday Hosu, 2025. "Exploring the Factors Enhancing Marketability of Coastal Agricultural Products in Rural South Africa," Economies, MDPI, vol. 13(5), pages 1-16, May.
    4. Shoaib Akhtar & Azhar Abbas & Muhammad Amjed Iqbal & Muhammad Rizwan & Abdus Samie & Muhammad Faisal & Jam Ghulam Murtaza Sahito, 2021. "What Determines the Uptake of Multiple Tools to Mitigate Agricultural Risks among Hybrid Maize Growers in Pakistan? Findings from Field-Level Data," Agriculture, MDPI, vol. 11(7), pages 1-13, June.
    5. Ullah, Ayat & Zeb, Alam & Saqib, Shahab E. & Kächele, Harald, 2022. "Landscape co-management and livelihood sustainability: Lessons learned from the billion trees afforestation project in Pakistan," Land Use Policy, Elsevier, vol. 115(C).
    6. Zheng, Hongyun & Ma, Wanglin & Wang, Fang & Li, Gucheng, 2021. "Does internet use improve technical efficiency of banana production in China? Evidence from a selectivity-corrected analysis," Food Policy, Elsevier, vol. 102(C).
    7. Mazhar Biland & Alam Zeb & Ayat Ullah & Harald Kaechele, 2021. "Why Do Households Depend on the Forest for Income? Analysis of Factors Influencing Households’ Decision-Making Behaviors," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    8. Ullah, Ayat & Zeb, Alam & Liu, Jinlong & Mahmood, Nasir & Kächele, Harald, 2021. "Transhumant pastoralist knowledge of infectious diseases and adoption of alternative land use strategies in the Hindu-Kush Himalayan (HKH) region of Pakistan," Land Use Policy, Elsevier, vol. 109(C).
    9. Nawab Khan & Ram L. Ray & Hazem S. Kassem & Farhat Ullah Khan & Muhammad Ihtisham & Shemei Zhang, 2022. "Does the Adoption of Mobile Internet Technology Promote Wheat Productivity? Evidence from Rural Farmers," Sustainability, MDPI, vol. 14(13), pages 1-15, June.
    10. Ma, Wanglin & Rahut, Dil Bahadur & Sonobe, Tetsushi & Gong, Binlei, 2024. "Linking farmers to markets: Barriers, solutions, and policy options," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1102-1112.
    11. Zhang, Hepei & Ma, Wanglin & Li, Junpeng & Yang, Wei, 2023. "Can citrus farmers earn more from selling online?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1549-1560.
    12. Ayat Ullah & Alam Zeb & Ashfaq Ahmad Shah & Miroslava Bavorova, 2024. "From education to rehabilitation: empowering farming communities through extension services for landscape restoration," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(5), pages 11681-11701, May.
    13. Ayat Ullah & Miroslava Bavorova & Ashfaq Ahmad Shah & Giri Prasad Kandel, 2024. "Climate change and rural livelihoods: The potential of extension programs for sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 4992-5004, October.
    14. Ayat Ullah & Shahab E. Saqib & Harald Kächele, 2022. "Determinants of Farmers’ Awareness and Adoption of Extension Recommended Wheat Varieties in the Rainfed Areas of Pakistan," Sustainability, MDPI, vol. 14(6), pages 1-18, March.
    15. Adams, Faizal & Ullah, Ayat & Quaye, Jonathan & Mensah, Amos, 2024. "Understanding residents’ choice of urban farming systems in the Kumasi metropolis of Ghana: Land use policy implications," Land Use Policy, Elsevier, vol. 146(C).
    16. Agus Dwi Nugroho, 2021. "Agricultural market information in developing countries: A literature review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(11), pages 468-477.
    17. Masaood Moahid & Ghulam Dastgir Khan & Yuichiro Yoshida & Niraj Prakash Joshi & Keshav Lall Maharjan, 2021. "Agricultural Credit and Extension Services: Does Their Synergy Augment Farmers’ Economic Outcomes?," Sustainability, MDPI, vol. 13(7), pages 1-23, March.
    18. Ali Raza & Guangji Tong & Furqan Sikandar & Vasilii Erokhin & Zhang Tong, 2023. "Financial Literacy and Credit Accessibility of Rice Farmers in Pakistan: Analysis for Central Punjab and Khyber Pakhtunkhwa Regions," Sustainability, MDPI, vol. 15(4), pages 1-24, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ayat Ullah & Nasir Mahmood & Alam Zeb & Harald Kächele, 2020. "Factors Determining Farmers’ Access to and Sources of Credit: Evidence from the Rain-Fed Zone of Pakistan," Agriculture, MDPI, vol. 10(12), pages 1-13, November.
    2. Kuijpers, Rob, 2020. "Integrated Value Chain Development: Evidence from Bangladesh," Food Policy, Elsevier, vol. 97(C).
    3. Tabe-Ojong, M.P.J. & Mausch, K. & Woldeyohanes, T. & Heckelei, T., 2018. "A Triple-Hurdle Model of the Impacts of Improved Chickpea Adoption on Smallholder Production and Commercialization in Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277287, International Association of Agricultural Economists.
    4. Momanyi, Denis & Lagat, Prof. Job K. & Ayuya, Dr. Oscar I., 2016. "Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya," MPRA Paper 69202, University Library of Munich, Germany, revised 27 Jan 2016.
    5. Muricho, G. & Kulundu, D. & Sule, F., 2018. "Impact Assessment of Agricultural Commercialization on Food Security Among Smallholder Farmers in Kenya: An Application of Correlated Random Effects," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277325, International Association of Agricultural Economists.
    6. Djomo Choumbou Raoul Fani & Ukpe Udeme Henrietta & Emmanuel Njock Oben & Donald Denen Dzever & Onyeje Hephzibah Obekpa & Auguste Tamba Nde & Mohamadou Sani & Mbong Grace Annih & Dontsop Nguezet Paul M, 2021. "Assessing the Performance and Participation among Young Male and Female Entrepreneurs in Agribusiness: A Case Study of the Rice and Maize Subsectors in Cameroon," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    7. Husmann, Christine, 2015. "Transaction Costs on the Ethiopian Formal Seed Market and Innovations for Encouraging Private Sector Investments," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(01), pages 1-18, February.
    8. Aryal, Jeetendra Prakash & Rahut, Dil Bahadur & Thapa, Ganesh & Simtowe, Franklin, 2021. "Mechanisation of small-scale farms in South Asia: Empirical evidence derived from farm households survey," Technology in Society, Elsevier, vol. 65(C).
    9. Kabeto, Agete Jerena, 2014. "An Analysis Of Factors Influencing Participation Of Smallholder Farmers In Red Bean Market In Halaba Special District, Ethiopia," Research Theses 276425, Collaborative Masters Program in Agricultural and Applied Economics.
    10. Idelphonse O. Saliou & Afio Zannou & Augustin K. N. Aoudji & Albert N. Honlonkou, 2020. "Drivers of Mechanization in Cotton Production in Benin, West Africa," Agriculture, MDPI, vol. 10(11), pages 1-13, November.
    11. Khodran Alzahrani & Mubashar Ali & Muhammad Imran Azeem & Bader Alhafi Alotaibi, 2023. "Efficacy of Public Extension and Advisory Services for Sustainable Rice Production," Agriculture, MDPI, vol. 13(5), pages 1-17, May.
    12. Yao, B. & Shanoyan, A., 2018. "The Use of Mobile Money Application and Smallholder Farmer Market Participation: Evidence form Cote d Ivoire and Tanzania," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277259, International Association of Agricultural Economists.
    13. Jane Musole Kwenye & Xiaoting Hou Jones & Alan Renwick, 2023. "Understanding Land-Use Trade-off Decision Making Using the Analytical Hierarchy Process: Insights from Agricultural Land Managers in Zambia," Land, MDPI, vol. 12(3), pages 1-19, February.
    14. Songsermsawas, Tisorn & Kafle, Kashi & Winters, Paul, 2021. "Decomposing the Impacts of an Agricultural Value Chain Investment by Gender and Ethnicity: The case of Nepal," 2021 Conference, August 17-31, 2021, Virtual 315047, International Association of Agricultural Economists.
    15. Mignouna, D.B. & Abdoulaye, T. & Alene, A. & Akinola, A.A. & Manyong, V.M., 2015. "Drivers of Market Participation Decisions among Small-scale Farmers in Yam Growing Areas of Nigeria and Ghana," 2015 Conference, August 9-14, 2015, Milan, Italy 230219, International Association of Agricultural Economists.
    16. Awal Abdul‐Rahaman & Awudu Abdulai, 2020. "Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 259-280, April.
    17. repec:lic:licosd:41419 is not listed on IDEAS
    18. Ali Raza & Guangji Tong & Furqan Sikandar & Vasilii Erokhin & Zhang Tong, 2023. "Financial Literacy and Credit Accessibility of Rice Farmers in Pakistan: Analysis for Central Punjab and Khyber Pakhtunkhwa Regions," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    19. Genereuse, Umuhoza, 2012. "Analysis of Factors Influencing Women Participation in Coffee Value Chain in Huye District, Rwanda," Research Theses 243451, Collaborative Masters Program in Agricultural and Applied Economics.
    20. Kaimba, George K. & Mithöfer, Dagmar & Muendo, Kavoi M., 2021. "Commercialization of underutilized fruits: Baobab pulp supply response to price and non-price incentives in Kenya," Food Policy, Elsevier, vol. 99(C).
    21. Mukundi, Eric & Mathenge, Mary K. & Ngigi, Margaret, 2013. "Sweet Potato Marketing Among Smallholder Farmers: The Role of Collective Action," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160679, African Association of Agricultural Economists (AAAE).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:teinso:v:63:y:2020:i:c:s0160791x20300105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/technology-in-society .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.