Household wealth and adoption of improved maize varieties in Nepal: a double-hurdle approach

Abstract

In the light of emerging debates about increasing agricultural production and food security for rural farmers in developing countries, this paper examines the effects of household wealth on adoption and use intensity of improved maize varieties (IMVs) in two agro-ecological regions of central Nepal. Using cross-sectional farm-level data from 416 households, we first categorized households into two wealth groups -- poorly endowed and well-endowed households -- and then estimated Cragg’s double-hurdle model for adoption and use intensity of IMVs for each group. The study found the presence of heterogeneous factors influencing adoption and intensity of adoption between poorly and well-endowed households, suggesting a need for wealth-group-specific policy interventions to increase adoption of IMVs and their subsequent impacts on food security. The results also indicated that the availability of seed in local retail outlets will benefit especially the poorly endowed farmers because distance to market showed a negative impact on adoption and intensity of adoption of IMVs. Therefore, government should establish a wide seed distribution network in rural areas, preferably by way of a public-private partnership (PPP), if the desired adoption rate and intensity of adoption are to be achieved. Linking farmers to markets by integrating farmers with potential buyers could help reduce transaction costs and make agriculture more profitable.