Improving Technology Adoption in Agriculture through Extension Services: Evidence from Uruguay

This paper analyzes the impact of the ‘Farm Modernization and Development Program’ (PREDEG) on the technology uptake and productivity of Uruguayan farmers. Using a unique panel dataset, we combine propensity score matching techniques and fixed effects models to estimate the program’s impact. Although the results vary according to the crops, we find consistent evidence that the program increased the rate of adoption of certified varieties and the density of plantation. However, there is only limited evidence of its effects on productivity, mostly derived from helping producers to cope with an illness of peach orchards. Conversely, we find some indications of negative lagged productivity effects for apples, which might be related to a short term cost of transitioning to new varieties or technologies. While the evidence of the effects on yields is not definitive due to the limited timeframe of the evaluation, the results indicate that PREDEG services were useful for incentivizing the adoption of specific technologies, as well as for crop-specific technical assistance like plant health.