Improving Access to New Technologies: An Experiment with Kenyan Input Sellers

Abstract

Small and medium enterprises in low income countries are key actors in the introduction and diffusion of new technologies. However, demand uncertainty can discourage small retailers from stocking newer, less familiar products, limiting the availability of innovative technologies and leading to the persistence of outdated but well-established products. In this study, we provided Kenyan agrodealers with a 10% price discount on new, drought tolerant maize hybrids. The discount increased the likelihood that the agrodealer stocked the new hybrids and increased the share of the new hybrids in overall sales. Effects were strongest among risk-averse dealers. The discount encouraged dealers to gather more information about the seeds, resulting in better-informed recommendations to farmers. Although it did not lower retail prices, the discount increased sellers' advisory efforts. Our findings show that modest incentives can shift agrodealer behavior and spur technology diffusion in rural markets.

Keywords: Small Firms, Agrodealers, Innovation, Technology Adoption, Varietal Turnover, Africa, Seed