Agricultural Technology Choice and Transport

40 Pages Posted: 20 Apr 2016

See all articles by Rubaba Ali

Rubaba Ali

World Bank; University of Maryland

Alvaro Federico Barra

World Bank

Claudia N. Berg

International Monetary Fund (IMF)

Richard Damania

World Bank; University of Adelaide - School of Economics

John D. Nash

World Bank

Jason Russ

World Bank; George Washington University

Date Written: May 18, 2015

Abstract

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.

Keywords: Economic Theory & Research, Agricultural Knowledge and Information Systems, Technology Industry, Transport Economics Policy & Planning, ICT Policy and Strategies

Suggested Citation

Ali, Rubaba and Barra, Alvaro Federico and Berg, Claudia N. and Damania, Richard and Nash, John D. and Russ, Jason, Agricultural Technology Choice and Transport (May 18, 2015). World Bank Policy Research Working Paper No. 7272, Available at SSRN: https://ssrn.com/abstract=2607772

Rubaba Ali (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

University of Maryland ( email )

College Park
College Park, MD 20742
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Alvaro Federico Barra

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Claudia N. Berg

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Richard Damania

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 4933 (Phone)
+61 8 8223 1460 (Fax)

John D. Nash

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jason Russ

World Bank

1818 H Street, NW
Washington, DC 20433
United States

George Washington University

2121 I Street NW
Washington, DC 20052
United States

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