Private Sector Promotion of Agricultural Technologies: Experimental Evidence from Nigeria

Abstract

Private sector agricultural businesses are critical for scaling new and potentially environmentally-friendly technologies, though much attention has focused on public agricultural investment. Working with a private firm, we conduct an experiment testing the effectiveness of alternative marketing strategies for promoting the adoption of urea super granule fertilizer (USG) among rice farmers in Nigeria. We disentangle the effects of price discount vouchers (25 percent discount) relative to the firm’s standard marketing package (farmer field days, demonstration plots, and community sales agents). We find that the firm’s standard marketing increases the adoption of USG fertilizer by 24 percentage points while reducing prilled urea utilization by 17 percentage points. Discount vouchers increase adoption of USG by an additional eight percentage points, but are not profitable for the firm. Although the adoption of USG reduces nitrogen loss and leads to potential environmental benefits, farmer rice yields did not increase. From a firm and farmer perspective, environmentally-friendly technologies are only likely to diffuse broadly when private returns are high. The experiment provides evidence on the inelasticity of farmer demand for environmental-friendly technologies.

Keywords: Technology adoption, private sector, micro-dosing, Nigeria

JEL Classification: Q10, Q16, Q13, Q11, D00, D03