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Low Quality, Low Returns, Low Adoption: Evidence from the Market for Fertilizer and Hybrid Seed in Uganda

Author

Listed:
  • Bold, Tessa

    (IIES, Stockholm University and Goethe University Frankfurt)

  • Kaizzi, Kayuki C.

    (National Agricultural Research Laboratories, Kampala)

  • Svensson, Jakob

    (IIES, Stockholm University)

  • Yanagizawa-Drott, David

    (Harvard University)

Abstract

To reduce poverty and food insecurity in Africa requires raising productivity in agriculture. Systematic use of fertilizer and hybrid seed is a pathway to increased productivity, but adoption of these technologies remains low. We investigate whether the quality of agricultural inputs can help explain low take-up. Testing modern products purchased in local markets, we find that 30% of nutrient is missing in fertilizer, and hybrid maize seed contains less than 50% authentic seeds. We document that such low quality results in negative average returns. If authentic technologies replaced these low-quality products, average returns for smallholder farmers would be over 50%.

Suggested Citation

  • Bold, Tessa & Kaizzi, Kayuki C. & Svensson, Jakob & Yanagizawa-Drott, David, 2015. "Low Quality, Low Returns, Low Adoption: Evidence from the Market for Fertilizer and Hybrid Seed in Uganda," Working Paper Series rwp15-033, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:rwp15-033
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    References listed on IDEAS

    as
    1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2011. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," American Economic Review, American Economic Association, vol. 101(6), pages 2350-2390, October.
    2. Dean Karlan & Robert Osei & Isaac Osei-Akoto & Christopher Udry, 2014. "Agricultural Decisions after Relaxing Credit and Risk Constraints," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 597-652.
    3. Lori Beaman & Dean Karlan & Bram Thuysbaert & Christopher Udry, 2013. "Profitability of Fertilizer: Experimental Evidence from Female Rice Farmers in Mali," American Economic Review, American Economic Association, vol. 103(3), pages 381-386, May.
    4. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 395-424, September.
    5. Nkonya, Ephraim & Kaizzi, Crammer & Pender, John, 2005. "Determinants of nutrient balances in a maize farming system in eastern Uganda," Agricultural Systems, Elsevier, vol. 85(2), pages 155-182, August.
    6. George J. Mailath & Larry Samuelson, 2001. "Who Wants a Good Reputation?," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 415-441.
    7. Tavneet Suri, 2009. "Selection and Comparative Advantage in Technology Adoption," NBER Working Papers 15346, National Bureau of Economic Research, Inc.
    8. Carl Shapiro, 1982. "Consumer Information, Product Quality, and Seller Reputation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 20-35, Spring.
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    Cited by:

    1. Rob Kuijpers & Johan Swinnen, 2016. "Value Chains and Technology Transfer to Agriculture in Developing and Emerging Economies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1403-1418.
    2. Kabunga, N. & Bizimungu, E., 2018. "A Latent Class Analysis of Agricultural Technology Use Behavior in Uganda and Implications for Optimal Targeting," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277007, International Association of Agricultural Economists.
    3. Omotilewa, Oluwatoba J. & Ricker-Gilbert, Jacob & Ainembabazi, John Herbert & Shively, Gerald E., 2018. "Does improved storage technology promote modern input use and food security? Evidence from a randomized trial in Uganda," Journal of Development Economics, Elsevier, vol. 135(C), pages 176-198.
    4. Fairbairn, Anna & Michelson, Hope & Ellison, Brenna & Manyong, Victor, 2016. "Mineral Fertilizer Quality: Implications for Markets and Small Farmers in Tanzania," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236818, Agricultural and Applied Economics Association.
    5. Charles D. Brummitt & Kenan Huremovic & Paolo Pin & Matthew H. Bonds & Fernando Vega-Redondo, 2017. "Contagious disruptions and complexity traps in economic development," Papers 1707.05914, arXiv.org.
    6. Hounkonnou, Dominique & Brouwers, Jan & van Huis, Arnold & Jiggins, Janice & Kossou, Dansou & Röling, Niels & Sakyi-Dawson, Owuraku & Traoré, Mamoudou, 2018. "Triggering regime change: A comparative analysis of the performance of innovation platforms that attempted to change the institutional context for nine agricultural domains in West Africa," Agricultural Systems, Elsevier, vol. 165(C), pages 296-309.
    7. Bisimungu, Emmanuel & Kabunga, Nassul, 2016. "A Latent Class Analysis of agricultural technology adoption behavior in Uganda: Implications for Optimal Targeting," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249347, African Association of Agricultural Economists (AAAE).
    8. Ermias Engida Legesse & Amit Kumar Srivastava & Arnim Kuhn & Thomas Gaiser, 2019. "Household Welfare Implications of Better Fertilizer Access and Lower Use Inefficiency: Long-Term Scenarios for Ethiopia," Sustainability, MDPI, Open Access Journal, vol. 11(14), pages 1-24, July.

    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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