Information asymmetry, input markets, adoption of innovations and agricultural land use in Khyber Pakhtunkhwa, Pakistan

This paper presents empirical evidence on the effects of information asymmetry in input markets on the adoption of innovations and agricultural land use in rainfed districts of Khyber Pakhtunkhwa, Pakistan. Farmers’ input market integration may contribute to innovation and adoption among farmers, which may in turn positively influence the sustainable use of agricultural land. To examine this hypothesis, we conducted a study of farmers and input providers to assess the potential constraints on quality inputs, prices, and extension information. We used a multistage random sampling technique to collect data from 395 respondents. We then compared differences among adopters and non-adopters using the Mann-Whitney U test and Mood’s median test. Our results indicate that there is a significant difference between the adopters and non-adopters when considering their perceptions of asymmetric market information. Non-adopters are suspicious of exaggerated prices, the non-availability of price lists, adulteration of agricultural inputs, unbalanced input weight and the supply of low-quality alternate commodities (e.g., fertilizers and pesticides) in place of the recommended commodities in the markets. Our results call for the reformulation and implementation of appropriate policies to ensure transparent and equal information sharing among farmers engaged in input markets and for the provision of timely and quality inputs assured by regulatory checks and price checks. Free availability of information on innovations and appropriate oversight over markets appear not only to motivate farmers to adopt agricultural technologies but also to influence more sustainable land use practices.