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Strategic Decision-Making: Adoption of Agricultural Technologies and Risk in a Peasant Economy

Author

Listed:
  • Mariam, Yohannes
  • Galaty, John
  • Coffin, Garth

Abstract

Descriptive and logit analysis were employed to investigate the impact of social, economic and technical factors on decisions to adopt new agricultural technologies in the Ada and Selale districts of Ethiopia. Peasants follow sequential adoption of technologies. In both study areas, priority is given to adoption of crop production augmenting technologies followed by technologies that complement crop production (Ada) and contribute to increases in milk production (Selale). Producers of both regions require existence of certain pre-conditions prior to the adoption of technologies. Ada farmers require more pre-conditions related to livestock production while Selale farmers require more preconditions related crop production. The impact of indigenous production knowledge and experience on adoption decisions was found not only positive but greater than most economic and social variables. The influence of most socioeconomic variables is greater on technologies that are proven to have a more certain outcome (e.g., fertilizer and pesticides) than on technologies which are either expensive or risky (e.g., cross-bred cows and improved seed). Risk-averse behaviour of households reduces the probability of adopting new technologies in both study regions. Households may be willing to take more risks if they receive insurance from social networks, governmental and non-governmental organizations or are rich. The results from the Selale and Ada regions suggest that physical inputs and knowledge exert large and significant positive impacts on production when farmers adopt combinations of fertilizer and pesticides (Ada), or fertilizer and cross-bred cows (Selale).

Suggested Citation

  • Mariam, Yohannes & Galaty, John & Coffin, Garth, 1993. "Strategic Decision-Making: Adoption of Agricultural Technologies and Risk in a Peasant Economy," MPRA Paper 387, University Library of Munich, Germany, revised 10 Aug 1994.
    • Handle: RePEc:pra:mprapa:387
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    References listed on IDEAS

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    1. Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1987. "Farmer Education and Farm Efficiency: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 643-644, April.
    2. Anderson, Jock R. & Dillon, John L. & Hardaker, Brian, 1977. "Agricultural Decision Analysis," Monographs: Applied Economics, AgEcon Search, number 288652, November.
    3. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 44, pages 2343-2378, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Logit; Ethiopia; adoption of technologies; indigenous knowledge; crop; livestock; risk-averse; social networks; governmental; non-governmental organizations;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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