Agricultural technology choice and transport

Type Working Paper - World Bank Policy Research Working Paper
Title Agricultural technology choice and transport
Issue 7272
Publication (Day/Month/Year) 2015
This paper addresses an old and recurring theme in development
economics: the slow adoption of new technologies by
farmers in many developing countries. The paper explores
a somewhat novel link to explain this puzzle—the link
between market access and the incentives to adopt a new
technology when there are non-convexities. The paper
develops a theoretical model to guide the empirical analysis,
which uses spatially disaggregated agricultural production
data from Spatial Production Allocation Model and Living
Standards Measurement Study survey data for Nigeria. The
model is used to estimate the impact of transport costs
on crop production, the adoption of modern technologies,
and the differential impact on returns of modern
versus traditional farmers. To overcome the limitation of
data availability on travel costs for much of Africa, road
survey data are combined with geographic information
road network data to generate the most thorough and
accurate road network available. With these data and
the Highway Development Management Model, minimum
travel costs from each location to the market are
computed. Consistent with the theory, analysis finds that
transportation costs are critical in determining technology
choices, with a greater responsiveness among farmers
who adopt modern technologies, and at times a perverse
(negative) response to lower transport costs among those
who employ more traditional techniques. In sum, the
paper presents compelling evidence that the constraints to
the adoption of modern technologies and access to markets
are interconnected, and so should be targeted jointly.

Related studies