Increasing both take up and use of an agricultural technology in Zambia

About

Even though agricultural technology and innovation can be beneficial to farmers, adoption rates often remain low. Subsidies for adoption are a popular approach to increasing take up. However, when adoption depends not just on take up but also on whether the individual actually uses the technology, placing a subsidy on take up may not be sufficient for increasing use. 

Across Zambia, where cotton farming is an important source of income for many smallholder farmers, the introduction of a specific nitrogen-fixing tree species called Faidherbia albida has been shown to help cotton farmers increase their yield up to 400%. However, tree cultivation takes years of the farmers’ time and effort, thus adoption remains low. Subsidies to lower the price of seedlings may not be effective at keeping the trees alive, given that farmers need to continue to invest even after they take up the seedlings. 

We studied the effectiveness of subsidies for technology adoption by varying the incentives for take-up of Faidherbia albida along with rewards for tree survival. How do farmers respond to these incentives, and how can policymakers optimally design subsidies for agricultural technology adoption?

Approach

We conducted a randomized evaluation to test the effects of subsidies for take up and rewards for survival on the adoption of Faidherbia albida trees. 1314 farmers received and were compensated for attending a day of training which provided instructions on planting and caring for the trees, information about the private fertilizer benefits, and public environmental benefits of the trees. At the training, groups of farmers were randomly assigned different levels of take-up subsidies for the initial adoption stage, to purchase tree seedlings. Each individual farmer was also informed that they would receive a randomized financial reward one year after the initial take-up, contingent on the survival of the trees. There were no penalties for farmers who chose to abandon tree cultivation within the year of study.

Key Findings

Farmers who were offered larger subsidies took up the technology more often, while overall follow-through rates remained low after one year. Yet, rewards for follow-through had a positive effect on tree survival. These results suggest that while subsidies may increase the take-up of a technology, they don’t outweigh uncertainty around long-term costs and benefits, and thus may be less effective at generating follow through (tree survival). This uncertainty can play an important role in the adoption of technologies that require costly investments over time. In particular, where adopters face uncertainty and can abandon a technology after take-up, subsidizing take-up may not be cost effective. This finding helps explain high rates of abandoned technologies in many development contexts.

Partners

This project was a partnership with Shared Value Africa and Dunavant Cotton Ltd. with support from the Abdul Latif Jameel Poverty Action Lab.