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Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia

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  • Tigist Mekonnen Melesse

    (PhD fellow, UNU-MERIT, Maastricht)

Abstract

Adoption of improved agricultural technologies is central to transformation of farm- ing system and a path out of poverty in developing countries. The aim of the current study is to provide empirical evidence on the impact of improved agricultural technolo- gies (HYVs and chemical fertilizer) on smallholders' output market participation. The analysis is based on Farmer Innovation Fund (FIF) impact evaluation survey data cov- ering around 2,675 households collected by the World Bank in 2010-2013 in Ethiopia. Endogenous treatment e ect and sample selection models are employed to account for the self-selection bias in technology adoption and market participation. Regressions based on matching techniques are employed for robustness check. The main results shows that adoption of improved high-yielding varieties (HYVs) and chemical fertilizer is found to have a positive and robust e ect on smallholders' marketed surplus. We found evidence that adoption of improved HYVs increases surplus crop production by 757 kg, whereas adoption of chemical fertilizer increases surplus by 285 kg. When the two technologies are adopted jointly, marketed surplus is found to increases by 635 kg, which establishes the complementarity of the two technologies. The result also shows that farmers' surplus crop production and market participation is deter- mined by access to modern inputs, cereal crop price, farm size, availability of labor, and infrastructure facility. Access to credit and training fosters technology adoption, however, we are unable to witness learning externality from neighbors on smallholders marketed surplus. Therefore, agriculture and rural development policy needs to focus on supporting agricultural technology adoption.

Suggested Citation

  • Tigist Mekonnen Melesse, 2015. "Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia," Working Papers 2015/06, Maastricht School of Management.
  • Handle: RePEc:msm:wpaper:2015/06
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    3. Makau, Joyce Mumbua & Irungu, Patrick & Nyikal, Rose Adhiambo & Kirimi, Lilian Wambui, 2016. "An assessment of the effect of a national fertiliser subsidy programme on farmer participation in private fertiliser markets in the North Rift region of Kenya," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(4), pages 1-13, December.

    More about this item

    Keywords

    Smallholders; market participation; technologies; treatment e ect model;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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