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Berkeley ECON 231 - Understanding Technology Adoption

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1 Understanding Technology Adoption: Fertilizer in Western Kenya Evidence from Field Experiments (PRELIMINARY AND INCOMPLETE) April 14, 2006 Esther Duflo, Michael Kremer and Jonathan Robinson MIT, NBER, CEPR and BREAD; Harvard University, NBER and BREAD; and Princeton University Abstract The question of the determinants of the adoption of new technology in agriculture is of central interest to both academics and policy makers. In this paper, we report the results from a unique set of field experiments conducted in Western Kenya over five years, which were designed to investigate a range of hypotheses on the determinants and barriers to the adoption of a profitable technology. In the experiments, meaningful programs expected to have an effect on the adoption of fertilizer under alternative hypotheses were proposed to randomly selected groups of farmers. We find that while know-how plays a role and can partly be overcome, other factors, such as the inability to save over even short periods of time may be even stronger impediments. 1. Introduction Maize is the staple food in most of Eastern and Southern Africa. Although a relatively new crop, the production of maize has expanded so fast that maize has become the dominant food crop in that region. In Kenya, maize accounts for 80% of the national production of cereals (Hassan 1998, p.164) and provides 40% of calorie consumption for Kenyans who consume more than 125 kilograms of maize per person each year (Byerlee, 1997 p.16). Maize is also a crop which has been subject to relatively successful technological improvements such as the use of fertilizer and new hybrid seeds. In developing countries outside of Africa, the2use of fertilizer accounted for 50-75% increase in the crop yields from the mid 1960s (Viyas, 1983). Many believed that this new technology in maize production with its high-yield potential would lead Africa to replicate the success of Asia’s Green Revolution. However, this hope did not materialize. Fertilizer use in Africa is still very low and has been stagnating since the 1980s. Meanwhile, with rapid population growth, Africa can no longer be viewed as a land-abundant region where food crop supply could be increased by the expansion of land used in agriculture (Byerlee, 1997). Large areas in Africa are marginal for agriculture and arable land is scarce in many African countries. One of those countries is Kenya, which surpasses major Asian countries in intensity of land use (Binswanger and Pingali, 1988). This makes the need for intensification of land use through the use of land-saving technologies such as fertilizer critical for achieving food security. Yet, the rate of increase in fertilizer use has been substantially lower than in Asia and Latin America (Byerlee, 1997). In rural Western Kenya, the Ministry of Agriculture recommends the use of hybrid seeds and fertilizer to increase maize yields. This recommendation is based on evidence from experimental farms that fertilizer substantially increases yield. However, according to surveys we have conducted over several years with a random sample of farmers, just 31.1% of farmers had ever used fertilizer, and just 17.4% had used fertilizer in the year prior to the survey. This paper seeks to understand why so many people do not use fertilizer even though it appears to have the potential to improve yields considerably, thus improving poor farmers’ lives as well as improving food security in the country. Models of technology adoption in agriculture suggest three broad categories of explanations. First, fertilizer may not be appropriate in this region. Second, it may be appropriate, but farmers either do not know it, or do not know how to use fertilizer. There may be an inefficiently low level of experimentation if there are externalities in learning. Finally, there is the issue of financing profitable investments. As technology adoption, information acquisition and diffusion, and the financing of investments are all fundamental questions in development economics, the lessons from this project have the potential to extend far beyond the specific example of fertilizer. In this project, we employ a series of randomized field trials to investigate several hypotheses that might explain why farmers do not use fertilizer: fertilizer is not profitable given the conditions on3real farms; it is profitable but farmers do not know how to use it, or do not know how profitable it is; or, farmers have difficulty financing the investment, perhaps because they are unable to save. In a series of randomized field experiments, we have explored these three hypotheses. Our main results suggest that: (1) fertilizer is profitable; (2) providing information goes part of the way towards increasing fertilizer adoption, and part of the low fertilizer adoption may be explained by the complete absence of diffusion of technological innovation; but (3) programs that help the farmers commit at the point where they have money to use fertilizer later in the season also have a large impact on future fertilizer adoption. This project has taken place in Busia, a relatively poor rural district in Western Kenya. The majority of Busia district is classified as a moist mid-altitude agro-ecological zone and maize is the main staple food. Soil fertility is low and the Kenyan Agricultural Research Institute and Ministry of Agriculture recommend use of fertilizer. Since the summer of 2000, International Child Support (ICS), a Dutch Non-Governmental Organization which has been working in Busia District for ten years, has conducted a series of small-scale pilot programs in order to understand the barriers to fertilizer adoption for farmers growing maize. In order to evaluate the impact of these programs, beneficiaries were randomly selected and data was collected. While the experiments and the data collection have already been completed, the data analysis is currently ongoing; this paper presents the experiments and the results that have been obtained so far, as well as some open questions. A. Fertilizer is profitable A natural hypothesis to explain the low level of adoption of fertilizer is that it is not a profitable investment for the average farmer. While agricultural experts have found that fertilizer greatly increases yields in test plots, it may not be profitable if it requires substantial investment in complementary inputs, is difficult to use in real-world


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Berkeley ECON 231 - Understanding Technology Adoption

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