Abstract
In this paper, we develop a theoretical model to simultaneously describe the adoption of improved seed technology and the climate risk perception capacity of farmers facing production risks and incomplete information about the new technology. The adoption condition is derived from the assumptions of upstream climate risk perception and downstream farmer risk aversion, and assuming that uncertainty can arise from two sources: the randomness of climatic conditions and the uncertainty of future returns associated with the use of the new technology. We estimate a reduced form of this model through the Heckman selection probit using a sample of 545 plots distributed in the five regions of Togo. The estimation procedure is developed in two steps. In the first step, we estimate the first four moments of the benefit distribution and in the second step, we incorporate these estimated moments into the model of technology adoption and climate risk perception. We find that risk plays a central role in farmers' decisions, first through the direct effect of its perception and second through sampling moments of the yield distribution in the adoption model.
Highlights
The negative effects of climate change on agricultural production in constituted geographic areas are documented and are of concern beyond the scientific community, to policy makers and even to populations increasingly exposed to climate hazards (Lokonon et al, 2019; Egbendewe-Mondjozo et al, 2017; Pilo, 2014)
If perception is considered the main determinant of the adoption of innovative technologies, it is important to understand what determines both the ability to perceive and other explanatory factors of the decision to adopt these technologies, keeping in mind that a new technology is in itself a carrier of risk
In this paper, we develop a theoretical model to simultaneously describe the adoption of improved seed technology and the climate risk perception capacity of farmers facing production risks and incomplete information about the new technology
Summary
The negative effects of climate change on agricultural production in constituted geographic areas are documented and are of concern beyond the scientific community, to policy makers and even to populations increasingly exposed to climate hazards (Lokonon et al, 2019; Egbendewe-Mondjozo et al, 2017; Pilo, 2014). Africa is subject to a highly variable and unpredictable climate This weakens African agricultural systems that no longer respond to current climate pressures (Yegbemey et al, 2014). The success of agricultural transformation worldwide has been largely attributed to improved agricultural technologies such as fertilizers, improved seeds, and soil and water conservation (Johnston and Kilby, 1975; Mellor, 1976; Gabre-Madhin and Johnston 2002). The adoption of these technologies offers opportunities to increase agricultural productivity and income (Feder et al, 1985), and to protect against climate risks. The contribution of improved technologies to agricultural productivity is well documented (Sunding and Zilberman, 2001; and Doss, 2006). The existence of risks associated with the adoption of new technologies can reduce productive performance and delay farmers'
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