Information Barriers to Adoption of Agricultural Technologies: Willingness to Pay for Certified Seed of an Open Pollinated Maize Variety in Northern Uganda

Astrid Mastenbroek,Robert Sparrow,Irma Sirutyte

doi:10.1111/1477-9552.12395

Abstract

AbstractWe examine smallholder farmers’ willingness to pay for agricultural technology and whether information is a constraint to adoption of certified maize seed in Northern Uganda. The uptake of improved maize varieties by smallholder farmers in Uganda remains persistently low, despite the higher yield potential compared to traditional varieties. A recently growing body of literature identifies information constraints as a potential barrier to adoption of agricultural technologies. We used incentive compatible Becker‐DeGroot‐Marschak auctions to elicit willingness to pay for quality assured improved maize seed by 1,009 smallholder farmers, and conducted a randomised evaluation to test the effect of an information intervention on farmers’ knowledge of seed certification. Our results show that the randomised information treatment enhanced farmers’ knowledge of certified seed. However, using the information treatment as an instrumental variable for knowledge, we find no evidence of a causal effect of knowledge on willingness to pay, suggesting that even though farmers are information constrained, this constraint does not affect adoption of certified seed directly. Nevertheless, only 14% of sampled farmers were willing to pay the market price, which corresponds closely with actual observed demand for certified seed in the previous season. This suggests that there are other barriers to adoption than information and awareness.

Highlights

Despite their proven benefits, adoption of many welfare enhancing products and technologies remains puzzlingly low across the developing world (Duflo et al, 2008, 2011; Ashraf et al, 2009; Cohen and Dupas, 2010; Mobarak and Rosenzweig, 2013)
Our objective was to elicit willingness to pay (WTP) for certified maize seed of an improved open-pollinated variety of smallholder farmers in Uganda, and test whether information about seed certification as a mechanism of communicating seed quality affects WTP for certified seed of this variety under prevailing market conditions
Our key findings are that WTP is approximately half of the commercially sold maize seed price and that randomised information sessions did increase knowledge and awareness of the benefits of certified seed, but increased knowledge did not translate into a higher willingness to pay

Summary

Introduction

Adoption of many welfare enhancing products and technologies remains puzzlingly low across the developing world (Duflo et al, 2008, 2011; Ashraf et al, 2009; Cohen and Dupas, 2010; Mobarak and Rosenzweig, 2013) This could be, for example, because producers do not have enough information to assess benefits associated with product use, because of liquidity constraints and the consequential high opportunity costs for money, lack of access (Simtowe et al, 2019), or downside risk associated with the investment (Emerick et al, 2016). When low willingness to pay (WTP) for a new technology and resulting low uptake is due to lack of knowledge about the product, the rate of adoption can be increased by providing relevant information. There are instances where information interventions did not generate the intended effect (Ashraf et al, 2013; De Groote et al, 2016a)

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Conclusion