Estimating seed demand in the presence of market frictions: Evidence from an auction experiment in Nigeria.

This paper measures the effect of seed quality misperceptions on bidding behavior and demand for high-quality seed using an information-provision experiment within an incentive-compatible Vickery Second Price (SPA) auction mechanism that mimics seed purchasing decisions in the presence of seed market frictions. We find that most individuals are prone to quality misperception and revise their bids upwards (downwards) in response to positive (negative) quality signals. In addition, by exploiting random variation in the timing of cash grants, we show that imperfect information influences farmer seed valuation, even in the presence of potentially binding liquidity constraints. We also demonstrate that the provision of quality information does not fully resolve quality misperceptions. We then show that unresolved or persistent misperception is severe enough to distort bidding behavior, and ignoring it could lead to biased willingness-to-pay estimates. Our findings have important implications both for improving inference related to the identification and estimation of willingness to pay for quality seed in the presence of market frictions, and for the design of seed sector polices in developing countries.

Drivers of transformation of the maize sector in Nigeria.

Maize is widely used for food, animal feed, and industrial raw material in Nigeria. This paper documents the important changes that characterize Nigeria's maize production and area expansion along with contributing factors that have transformed maize from a backyard food crop to a dominant food security and commercial crop. Using both secondary and primary data on maize production and varietal adoption over the last six decades, we found that Nigeria now produces ten times more maize than it did in 1960 and four times more maize than it did in 2005. Our findings further suggested that government policies and institutional arrangements that promoted access to and use of modern inputs and increased demand of maize grain for food, feed, and other industrial uses have played major roles in transforming maize from a backyard crop to a dominant staple and commercial crop in Nigeria. Considering the impeding climate change threats to food security in Nigeria, policy interventions should be tailored towards further scaling-up of stress resilient and climate-smart maize varieties to improve the productivity, income, and resilience of smallholder farmers. This requires strong support not only to get recently released superior improved varieties into the hands of smallholder farmers but also to accelerate varietal turnover.

Plot-level impacts of improved lentil varieties in Bangladesh.

The advent of improved lentil varieties (ILVs) in the mid-1990s solved the disease problem which almost halted lentil production in Bangladesh. Levels of adoption of ILVs have been documented in the literature, but little is known about their impacts. Applying an instrumental variables regression to data collected from a sample of 1,694 lentil plots and DNA fingerprinting for varietal identification, this study provides estimates of the plot-level impacts of adoption of ILVs in Bangladesh. Model results show that adoption of ILVs is associated with 14.3% (181.14 kg/ha) higher yields and 17.23% (US$169.44/ha) higher gross margins. Since 45% of lentil area is under ILVs, they generated over 8.77 tones (6%) more supply of lentils from domestic sources, saving the country US$8.22 million in imports in 2015 alone. By investing in the generation and scaling of ILVs, Bangladesh and other South Asian countries with similar agro-ecologies can increase production and decrease dependency on lentil imports.

Market participation, household food security, and income: The case of cowpea producers in northern Nigeria.

This article evaluates the impact of cowpea market participation on household food security and income in northern Nigeria. Using household survey data from a representative sample of over 1,500 farm households and applying a combination of instrumental variable techniques and dose-response functions, we found that cowpea market participation had a statistically significant positive impact on household food security and income. Cowpea market participation increased food expenditure by 1.6% and household income by 0.7% with a 10 unit increase in the quantity of cowpea sold. These results underscore the importance of cowpea market participation for household food security and income improvement. We also found that selling cowpea to rural and urban traders significantly increased household income, food expenditure, and food security. Results show that selling cowpea to rural and urban traders increased household income by 17% and 13%, respectively. The results point to the need for an enabling policy environment and public infrastructure to enhance market participation of farmers and traders. Public infrastructure investments in the form of feeder road construction and maintenance in the distant villages are encouraged, which in the long run can translate into improved cowpea productivity and welfare of smallholder farmers.

Potential returns to yam research investment in sub-Saharan Africa and beyond.

Lack of good-quality planting materials has been identified as the most severe problem militating against increased agricultural productivity in sub-Saharan Africa (SSA) and beyond. However, investment of research efforts and resources in addressing this menace will only be feasible and worthwhile if attendant economic gains are considerable. As a way of investigating the economic viability of yam investment, this research has been initiated to address problems confronting yam productivity in eight countries of SSA and beyond: Nigeria, Ghana, Benin, Togo, Côte d'Ivoire, Papua New Guinea, Jamaica, and Columbia. Research options developed were to be deployed and disseminated. Key technologies include the adaptive yam minisett technique (AYMT), varieties adapted to low soil fertility and drought, nematode-resistant cultivars (NRC), and crop management and postharvest practices (CMPP). This article aims at estimating the potential economic returns, the expected number of beneficiaries, and poverty reduction consequent to the adoption of technology options. Estimates show that the new land area that will be covered by the technologies in the eight countries will range between 770,000 ha and 1,000,000 ha with the highest quota accounted for by AYMT. The net present value will range between US$584 and US$1392 million and was highest for the NRC. The CMPP had the lowest benefit-cost ratio of 7.74. About 1,049,000 people would be moved out of poverty by these technologies by 2037 in the region. These technologies are less responsive to changes in cost than that in adoption rate. Therefore, the realization of the potential economic gains depends on the rate and extent of adoption of these technologies. Giving the knowledge-intensive nature of some of these interventions, capacity building of potential adopters will be critical to increasing the sustainability of the yam sector, thereby enhancing food security and reducing poverty.

The poverty impacts of improved cowpea varieties in Nigeria: A counterfactual analysis.

Adoption of improved agricultural technologies has long been recognized as critical for reducing poverty through increased productivity, incomes, and asset accumulation. Using a nationally representative survey data from a sample of over 1500 households in Nigeria, this paper evaluates the impacts of adoption of improved cowpea varieties on income and asset poverty reduction using an endogenous switching regression model. The results showed that adoption of improved cowpea varieties increased per capita household income and asset ownership by 17 and 24 percentage points, respectively. The results based on the observed and counterfactual income and asset distributions further showed that adoption reduced both income poverty and asset poverty by 5 percentage points. The paper concludes with a discussion of the policy options for increasing adoption and impacts of improved cowpea varieties in Nigeria.

Agricultural technology adoption and household welfare: Measurement and evidence.

Previous studies on the adoption and impacts of improved crop varieties have relied on self-reported adoption status of the surveyed households. However, in the presence of weak variety maintenance and poorly functioning seed certification system, measurement errors in self-reported adoption status can be considerable. This paper investigates how such measurement errors can lead to biased welfare estimates. Using DNA-fingerprinting based varietal identification as a benchmark, we find that misclassification in self-reported adoption status is considerable, with significant false negative and positive response rates. We empirically show that such measurement errors lead to welfare estimates that are biased towards zero and substantially understate the poverty reduction effects of adoption. While the empirical evidence suggests attenuation bias, our theoretical exposition and simulations demonstrate that upward bias and sign reversal effects are also possible. The results point to the need for improved monitoring of the diffusion process of improved varieties through innovative adoption data collection approaches to generate robust evidence for prioritizing and justifying investments in agricultural research and extension.

Ex-ante evaluation of promising soybean innovations for sub-Saharan Africa.

This study undertakes an ex-ante evaluation of the effects of alternative technology and policy options on soybean supply and demand in sub-Saharan Africa (SSA) to 2050. Current soybean consumption in SSA is dominated by cooking oil followed by soybean cake used as animal feed. Due to weak processing sectors and low soybean yields, the region is currently importing about 70% of its consumption requirements. Based on the results from a geospatial bio-economic modeling framework, soybean consumption in SSA is projected to more than double by 2050 compared to 2010 due in part to a rising population and rising incomes. On the other hand, supply from domestic production is projected to increase by 80% over the same period. Hence, by 2050, net imports into SSA would be nearly 4 times higher than supply from domestic production. Under a future drier climate, some of the production gains achieved through soybean research and extension would be lost and this would further worsen the soybean demand gap in SSA relative to the baseline. This study shows that relying on conventional breeding alone to increase soybean yields in SSA would not be enough to substantially reduce the future demand gap. A combination of promising innovations affecting the soybean value chain across SSA would be needed to close the soybean demand gap in SSA by 2050 under a drier future climate.

Identifying crop research priorities based on potential economic and poverty reduction impacts: The case of cassava in Africa, Asia, and Latin America.

It is widely recognized that increasing agricultural production to the levels needed to feed an expanding world population requires sharply increased public investment in research and development and widespread adoption of new technologies, but funding for national and international agricultural research has rather declined in recent years. In this situation, priority setting has become increasingly important for allocating scarce research resources among competing needs to achieve greater impacts. Using partial equilibrium economic surplus models and poverty impact simulations, this paper assesses cassava research priorities in Africa, Latin America and Caribbean, and Asia based on the potential economic and poverty reduction impacts of alternative research and technology options. The results showed that efficient planting material production and distribution systems and sustainable crop and soil fertility management practices have the greatest expected economic and poverty reduction impacts in the three regions. Lack of clean planting materials is a major constraint to adoption and it is envisaged that efficient production and distribution systems for planting material can accelerate technology adoption by farmers. Similarly, sustainable crop and soil fertility management practices play a key role in closing the observed yield gaps, especially in Africa. The paper discusses the results of the priority assessment for key cassava research options and concludes with the implications for cassava research priorities.

Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program.

In an attempt to go beyond the so called "smart" subsidies, Nigeria has embarked on a potentially innovative mobile phone-based input subsidy program that provides fertilizer and improved seed subsidies through electronic vouchers. In this article, we examined the productivity and welfare effects of the program using household-level data from rural Nigeria. The article employed instrumental variable regression approach to control for the potential endogeneity of the input subsidy program. Our results suggest that the program is effective in improving productivity and welfare outcomes of beneficiary smallholders. The size of the estimated effects suggests a large improvement in productivity and welfare outcomes. Moreover, the distributional effects of the program suggest no heterogeneity effects based on gender and farm land size. These results are robust to using alternative measurements of program participation. The benefit-cost ratio of 1.11 suggests that the program is marginally cost-effective. Overall, our results suggest that while improving average productivity is a good outcome for improving food security, improving the distributional outcome of the program by targeting the most disadvantaged groups would maximize the program's contribution to food security and poverty reduction.

Impacts of extension access and cooperative membership on technology adoption and household welfare.

This paper examines the impacts of access to extension services and cooperative membership on technology adoption, asset ownership and poverty using household-level data from rural Nigeria. Using different matching techniques and endogenous switching regression approach, we find that both extension access and cooperative membership have a positive and statistically significant effect on technology adoption and household welfare. Moreover, we find that both extension access and cooperative membership have heterogeneous impacts. In particular, we find evidence of a positive selection as the average treatment effects of extension access and cooperative membership are higher for farmers with the highest propensity to access extension and cooperative services. The impact of extension services on poverty reduction and of cooperatives on technology adoption is significantly stronger for smallholders with access to formal credit than for those without access. This implies that expanding rural financial markets can maximize the potential positive impacts of extension and cooperative services on farmers' productivity and welfare.

Measuring the impacts of adaptation strategies to drought stress: The case of drought tolerant maize varieties.

This study measured the impacts of drought tolerant maize varieties (DTMVs) on productivity, welfare, and risk exposure using household and plot-level data from rural Nigeria. The study employed an endogenous switching regression approach to control for both observed and unobserved sources of heterogeneity between adopters and non-adopters. Our results showed that adoption of DTMVs increased maize yields by 13.3% and reduced the level of variance by 53% and downside risk exposure by 81% among adopters. This suggests that adoption had a "win-win" outcome by increasing maize yields and reducing exposure to drought risk. The gains in productivity and risk reduction due to adoption led to a reduction of 12.9% in the incidence of poverty and of 83.8% in the probability of food scarcity among adopters. The paper concluded that adoption of DTMVs was not just a simple coping strategy against drought but also a productivity enhancing and welfare improving strategy. The results point to the need for policies and programs aimed at enhancing adoption as an adaptation strategy to drought stress in Nigeria and beyond.