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Bangladesh seems to be out of the shadow of famine - as far as physical availability of food is concerned. The micronutrient or hidden hunger problem still persists, but people do not die from shortage of food these days. Food production more than tripled from the time of independence till today-thanks mainly to the changing government policies.
There is a large body of literature dealing with the determinants of modern technology adoption. Quite obviously, the advent of a modern technology, say in agriculture, tends to attract large and medium farms first, and the smaller ones at a later stage. Even it may also happen that few farms do not at all adopt modern technology. Hence, we have to explore the reasons behind non-adoption or adoption to draw policy implications thereof. In broad classification, the reasons could be attributed as risk aversion, shortage of capital, information flows, demographic characteristics etc.
The factors mentioned above are detailed below:
One of the important determinants of the adoption of Modern Variety (MV) is risk-aversion among the 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 of 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 the risks by devoting less land on 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 could play around the luck. It is, thus, quite obvious that small and marginal farmers should be the most risk-averse farmers and, hence, the low adopters. However, they have gained sufficient knowledge over the course of time 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 crystal clear that a technology like MVs requires more working capital than the counterpart traditional ones (TVs). Besides, the amount of investment on fixed capital required is no less once the costs of inputs such as STWs, LLPs, fertilisers etc. are taken into due consideration. Therefore, the adoption of MV is determined by accumulated savings and access to financial institutions in the absence of subsidised irrigation. Small farmers in many countries, including Bangladesh, 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. The 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 the 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 argued 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. Under this scenario, 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 monopolistic pressure on the tenant to pay for more rent and interest rate. Other economists reckon that tenant farmers could be interested in growing modern paddy in some product and factor markets. But Bardhan thinks that technical changes to increase land supply and high labour-intensity could raise the incidence of tenancy. Again, it can be argued considering the risk-aversion that incidence of tenancy might rise as both tenant and landlord would like to share the risks in risky technological development. And, it would become easier to adopt MVs more in rented-in lands following Chyanovian hypothesis.
In Bangladesh, small farmers at the initial stage 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 way of devoting more lands under MVs than the larger ones. Especially in the wet season, the negative relationship between ownership of paddy lands and the rate of adoption appears to hold good. Again, the same trend holds in dry season when the MVs are widely grown. By and large, small farmers who were the laggards once in the adoption of modern technology are now leading technology. It might have happened that the power of Chyanovian hypothesis of subsistence pressure defeated the power of the credit and information-related hypothesis.
Looking at the future, it appears that old technologies may not work well. Most of the technologies were related to the dry season crop – especially rice in favourable areas. Future technologies should address non-rice crops and unfavourable zones. This obviously requires political commitment to put more resources to research and extension. Poor farmers could only be helped through technological advancement. And history has proved that they can easily adopt modern technology.
Abdul Bayes is a former Professor of Economics at Jahangirnagar University.