Money matters: The role of yields and profits in agricultural technology adoption
This article (PDF) published in the American Journal of Agricultural Economics states that despite the growing attention to technology adoption in the economics literature, knowledge gaps remain regarding why some valuable technologies are rapidly adopted, while others are not. This paper contributes to the understanding of agricultural technology adoption by showing that a focus on yield gains may, in some contexts, be misguided. The authors study a technology in Ethiopia that has no impact on yields, but that has nonetheless been widely adopted. The research results show that farmers’ comparative advantage does not play a significant role in their adoption decisions and which could be due to the overall high economic returns to adoption, despite the limited yield impacts of the technology. The results suggest economic measures of returns may be more relevant than increases in yields in explaining technology adoption decisions. This suggests that focusing policy solely on the yield aspect of genetic gains may be misguided. Examining traits other than yields, and improving households’ ability to realize higher yields (perhaps through complementary investments that improve value chains and market access) should accompany yield-increasing breeding programs. The context of the study is an extreme example of the extent to which money matter. Despite improved chickpea providing no statistically significant gains in yields, adoption of the technology has been extremely high. This adoption success has been the result of markets for the improved varieties in which farmers can sell their surpluses and reap economic benefits unavailable from growing and marketing less desirable traditional varieties. Policy and future research should reorient in a direction that considers both the physical and economic returns as factors that influence the adoption of agricultural technologies.