Building the evidence base to support smallholder farmers
Increasing migration has placed unprecedented demands on local food systems. Coupled with climate change, which continues to alter rain patterns and agricultural production, these global challenges are expected to exacerbate food insecurity in the coming century. This year’s World Food Day recognizes the importance of addressing food security and rural development in the context of migration and displacement.
Building the resilience and production capacity of smallholder farmers is critical to this effort. According to the FAO, more than 80 percent of the world’s farms are smaller than two hectares. Yet, in many low-income countries, these farms are responsible for meeting the needs of increasingly mobile populations with demands for a variety of fruits, vegetables, meats, and other agricultural products. Farmers may not be well equipped to shift their production toward more diverse (or unfamiliar) crops. It is therefore imperative that we focus on increasing smallholder farmer productivity now to respond to shifting demographic trends and support future food security.
In order to do this well, we need evidence. The Center for Effective Global Action (CEGA) and J-PAL, through the Agricultural Technology Adoption Initiative (ATAI), have produced rigorous research on what works—and what doesn’t—to spur increased productivity and profitability of smallholder farmers in sub-Saharan Africa and South Asia. In collaboration with governmental, multilateral, and NGO implementing partners, ATAI-funded researchers design, pilot, and rigorously evaluate a range of innovative approaches to improve the adoption and profitable use of agricultural technology, ultimately to impact smallholders’ yields, profits, and nutrition. To date, ATAI has funded 48 randomized evaluations across 15 countries, evaluating strategies to overcome common challenges to technology adoption like credit and savings constraints and lack of information about how to apply new technologies.
From this growing evidence base, we have developed a series of emerging insights in agricultural technology adoption. These insights distill findings from ATAI and complementary impact evaluations and provide potential strategies for effective paths forward.
Credit and Savings
Increasing access to traditional credit has had limited impacts on smallholder farmers’ profitability in several randomized evaluations in developing countries. Demand for new offers of credit was low, and even when farmers used traditional credit products to invest in new technologies and practices they increased the overall value of outputs, but rarely experienced increased profits. This suggests that for many smallholders, a lack of traditional credit is not the primary constraint to becoming more profitable. More research is needed to develop and test credit product designs that fit smallholders’ specific borrowing needs.
Learning about a new agricultural technology is fundamentally difficult, and farmers need several types of information to assess novel technologies and choose their inputs. Agricultural extension is the most common model to transmit information to farmers, but the use of traditional extension services is low. However, adapting tried and tested models of extension can impact agricultural activity. In particular, information that is more easily accessible or more tailored to individual farmers at a given moment in time can be effective in changing practices. Additionally, leveraging social networks for information diffusion is a critical design choice for the impacts of extension services. Extension may be most effective when providing information on a profitable practice that overcomes a behavioral bias. Providing information that helps overcome procrastination, or demonstrates an effective practice that may have previously seemed counterintuitive, can increase agricultural technology adoption.
The systematic risks of agricultural production play an important role in farmers’ agricultural investments decisions. Weather, natural disasters, pests, and disease can jeopardize farmers’ ability to recoup their investments and can depress productive input use. Risk mitigating strategies for smallholders, such as insurance and stress tolerant inputs, can impact yields and farmer welfare. While standalone weather index insurance can increase risk-taking in production decisions, it has limited commercial viability at market prices. New risk-mitigating crop varieties provide a promising alternative to insurance that can reduce farmers’ risk and produce higher yields. Additionally, these crops protect workers as well as landowners from shocks, and yield gains from risk-mitigating varieties can disproportionately benefit marginalized groups that cultivate less-desirable, risk-prone land.
Improving Input & Output Markets
In Sub-Saharan Africa, farmers often operate in “shallow” markets where investing in inputs and technologies that increase yields may not increase farmer profit. Poorly linked markets mean that farmers may receive lower prices from local markets flooded with increased supply. Increasing farmers’ access to “deeper” output markets with a wider variety of goods may open opportunities to improve profits and increase farmers use of inputs that improve yields. Simply providing price information alone to farmers is unlikely to have significant effects on farmer incomes or price levels, as information alone does not give farmers strong bargaining power in the presence of high transport costs. Yet, when information is provided to intermediaries or producers with direct access to markets, market prices converge and producers may benefit.
The above evidence suggests there are practical steps we can take now to improve the productivity, profitability, and livelihoods of smallholder farmers across the globe—with the ultimate aim of increasing food security. Increasing the productivity of this population is a key step towards broader agricultural transformation. Stay tuned for more updates from ATAI, as it continues to produce results that can speak to unlocking the economic potential of smallholder farmers.