Behind adoption of agro-technology  

Abdul Bayes   | Published: January 25, 2019 22:09:01

Quite obviously, the advent of a modern technology, say in agriculture, tends to attract large and medium farms first, and the reasons are not far to seek. They have the capacity to take risk, sufficient capital to cope with financial constraint and, last but not least, they have access to agricultural extension officials. Conversely, smaller ones adopt modern technology at a later stage. Even it may so happen that a few farms do not at all adopt modern technology. We therefore have to explore the reasons behind non-adoption or adoption to draw policy implications from thereof. In broad classification, the reasons could be risk aversion, shortage of capital, information flows, demographic characteristics etc. These factors are detailed below:

One of the important determinants of the adoption of Modern Variety (MV) is risk-aversion among farmers. Available studies refer to two types of risks: first, objective risks where returns from investment in MVs become uncertain in the face of climatic change or attacks from pests and diseases. And second, there are psychological risks comprising suspicion about the optimum outcome from a new technology. Quite obviously, the greater the perceived risks, the lower would be the proportions of land under these crops. Again, in case certain eagerness shows up at certain stage, farmers would try to minimise risks by devoting less land to MVs. The level of risk-aversion is also related to the income level of farmers. A poverty-stricken farmer may not want to see that the income goes down the subsistence level. But solvent farmers can try their luck. It is, thus, quite obvious that small and marginal farmers should be the most risk-averse farmers and, hence, the low adopters. However, over time they have gained sufficient knowledge on this new technology to reduce their subjective risks to an extent. Therefore, risk aversion factor may not be able to fully explain the issue of adoption in Bangladesh.

It is now clear that a technology like MVs requires more working capital than the counterpart traditional ones (TVs). Besides, the amount of investment of fixed capital required is no less once the costs of inputs such as STWs, LLPs, fertilizers etc. are taken into due consideration. Therefore, in the absence of subsidised irrigation, the adoption of MV is determined by accumulated savings and access to financial institutions. In many countries, including Bangladesh, small farmers are constrained by the availability of capital due to the lack of collateral. But once adoption occurs somehow, the accumulated savings could pave the ways for further adoption.

If two farmers display differential rate of adoption, we should think that the high adopter-farmer would have more information about the technology, sources of inputs and market prices than the low-adopter farmer (Pears 1980). In this case, education level of farmers could serve as a proxy for information. Since poverty increases the opportunity costs of sending children to schools, the positive relation between farm size and education becomes statistically significant. In many cases, only large farmers can access to bureaucracy and extension officials to steal the march in adoption through information generation.

According to the Chyanovian theoretical construct on agricultural economics, the relationship between production unit (land and worker) and consumption unit of households could emerge as an important variable in explaining the adoption rate. As per this construct, the association of a household with agriculture is strongly influenced by its consumption needs that grow with the expansion of the household size. A farmer responds to these needs sometimes through controlling more lands, sometimes through working hard or sacrificing leisure. In a country where land is very scarce, the only door open to farmers is to increase the yield on the meagre amount of land. And this target pushes farmers towards the adoption of new technology.

There is a lot of theoretical debate around this topic. Referring to the examples of eastern part of India, Amit Bhadury argues that the income of the landlord comprises the rent and the interest from the tenant. Therefore, the tendency of the landlord would be to put his tenant under severe credit net. In this situation, it would be in the interest of the landlord to disdain his tenant from adopting new technology so that his (landlord's) income from rent and interest rate is protected.

However, this hypothesis has been rejected on the plea that, if a landlord could pressurise the tenant not to adopt technology, then there is no reason why he should not be able to exert monopsonistic pressure on tenant to pay for more rent and interest rate. Other economists  reckon that, in some product and factor markets, tenant farmers could be interested in growing modern paddy. But Bardhan thinks that technical changes to increase land supply and high labour-intensity could raise the incidence of tenancy. Again, considering the risk-aversion, it can be argued that incidence of tenancy might rise as both tenant and landlord would like to share risks in risky technological development. And, following Chyanovian hypothesis, it would become easier to adopt MVs more in rented lands.

In Bangladesh, at the initial stage, small farmers were lagging behind the larger ones in terms of adoption. But with the passage of time, the laggards turned out to be the leaders by devoting more lands to MVs than the larger ones. Especially in wet season, the negative relationship between ownership of paddy lands and the rate of adoption appear to hold good. Again, the same trend holds in dry season when MVs are widely grown. By and large, small farmers who were the laggards once in the adoption of modern technology are now leading in the practice. It might have so happened that the power of Chyanovian hypothesis of subsistence pressure defeated the power of the credit and information-related hypothesis.

In our drive towards 2030 Agenda, we need a sustainable agriculture with a focus on high level technology. It has become more important in the light of the recent World Bank observation that Bangladesh stands 5th in terms of the number of extreme poor in the world. Remember that these chronic poor live in rural areas and  mostly on agricultural wages, Unless technology could raise productivity of these chronic poor, and tighten the labour market in rural areas ,  there is hardly any chance to lift them up.

Abdul Bayes is a former Professor of Economics at Jahangirnagar University

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