Adoption Pattern and Welfare Impact of Agricultural Technology

Abstract

This article examines the adoption of new-generation modern rice varieties (MRVs) and their impact on family welfare among rural farm households in central Nepal. Using cross-sectional data from 416 farm households and the Heckman’s sample selection model, this article finds a positive and significant impact of MRVs on farm income; distance to market and off-farm work exert a negative effect on farm income. The likelihood of adoption is mainly explained by age and education of the household head, access to extension services, seed access and acceptability of the rice grain to consumers. The results further reveal that farm size and land type have significant and positive influences on the adoption of MRVs. Designing mechanisms to help promote MRVs’ adoption among poorer households by developing new varieties suited for rain-fed areas may be a reasonable policy instrument to increase farm incomes. The results of this study suggest that because of the difficulties and costs of transportation and travel to distant markets, availability of seed in local retail outlets will benefit the farmers. To reduce transaction costs, farmers need to be linked to markets by a wide seed distribution network. Integrating farmers with potential buyers may increase profitability in agriculture and its subsequent impacts on rural farmers’ food security and general livelihood.