Click here for search results
A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia, Volume 1
 
Author:Larson, Donald F.; Gurara, Daniel Zerfu; Country:Ethiopia; Africa;
Date Stored:2013/10/30Document Date:2013/10/01
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Markets and Market Access; Economic Theory & Research; Climate Change and Agriculture; Fertilizers
Language:EnglishMajor Sector:Agriculture, fishing, and forestry
Rel. Proj ID:3A-Can Agricultural Growth Strategies Rely On African Smallholders -- -- P126407;Region:Africa
Report Number:WPS6681Sub Sectors:General agriculture, fishing and forestry sector; Crops
Collection Title:Policy Research working paper ; no. WPS 6681Paper is funded by the Knowledge for Change Program (KCP)Volume No:1

Summary: In Africa, farmers have been reluctant to take up new varieties of staple crops developed to boost smallholder yields and rural incomes. Low fertilizer use is often mentioned as a proximate cause, but some believe the problem originates with incomplete input markets. As a remedy, African governments have introduced technology adoption programs with fertilizer subsidies as a core component. Still, the links between market performance and choices about using fertilizer are poorly articulated in empirical studies and policy discussions, making it difficult to judge whether the programs are expected to generate lasting benefits or to simply offset high fertilizer prices. This paper develops a conceptual model to show how choices made by agents supplying input services combine with household livelihood settings to generate heterogeneous decisions about fertilizer use. An applied model is estimated with data from a panel survey in rural Ethiopia. The results suggest that adverse market conditions limit the adoption of fertilizer-based technologies, especially among resource-poor households. Farmers appear to respond to market signals in the aggregate and this provides a pathway for subsidies to stimulate demand. However, the research suggests that lowering transaction costs, through investments in infrastructure and market institutions, can generate deeper effects by expanding the technologies available to farmers across all pricing outcomes.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 35 pagesOfficial version*2.45 (approx.)
TextText version**
How To Order

See documents related to this project
* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/60WKJ9GTG0