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.

Misperceiving and misreporting input quality: Implications for input use and productivity

Farmers in developing countries routinely misperceive or misreport input quality for various reasons, which introduces substantial measurement error in farm survey data. In this paper, we motivate and illustrate, both analytically and empirically, the inferential and behavioral implications of misperception and misreporting using a unique crop variety identification data from Nigeria. Using a non-parametric framework for testing the presence of measurement error, we show that crop variety misclassification in our data is mostly driven by misperception. We then demonstrate the inferential challenges of treating misperception as misreporting and vice versa. Finally, we show that misperception induces crowding-in(out) of complementary agricultural inputs but these misperception-driven input allocations may not necessarily be yield-enhancing. As such, rectifying misperception by addressing agricultural input market imperfections may improve farmers' investment choices and productivity outcomes.

A review of varietal change in roots, tubers and bananas: consumer preferences and other drivers of adoption and implications for breeding

This review of the literature on varietal change in sub-Saharan Africa looks in detail at adoption of new varieties of bananas in Uganda, cassava in Nigeria, potato in Kenya, sweetpotato in Uganda and yams in Côte d'Ivoire. The review explored three hypotheses about drivers of varietal change. There was a strong confirmation for the hypothesis that insufficient priority given to consumer-preferred traits by breeding programmes contributes to the limited uptake of modern varieties (MVs) and low varietal turnover. Lack of evidence meant the second hypothesis of insufficient attention to understanding and responding to gender differences in consumer preferences for quality and post-harvest traits was unresolved. The evidence on the third hypothesis about the informal seed system contributing to slow uptake of MVs was mixed. In some cases, the informal system has contributed to rapid uptake of MVs, but often it appears to be a barrier with inconsistent varietal naming a major challenge.

Review of solar dryers for agricultural products in Asia and Africa: An innovation landscape approach

Solar drying is one of the most efficient and cost-effective, renewable, and sustainable technologies to conserve agricultural products in Asian and sub-Saharan African (SSA) countries. This review paper presents the different types of solar dryers that are widely used in Africa and Asia. In addition, the pre-eminent effects of their use on product quality, as well as their economic, environmental, and social impacts, are highlighted. Since financial, external, and structural factors play a key role in the adoption and scaling of solar dryers, this paper also discusses the impact of these factors on the effectiveness of solar drying technologies in selected Asian and SSA countries.

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.

Eco-efficiency and agricultural innovation systems in developing countries: Evidence from macro-level analysis

Agricultural innovation is an essential component in the transition to more sustainable and resilient farming systems across the world. Innovations generally emerge from collective intelligence and action, but innovation systems are often poorly understood. This study explores the properties of innovation systems and their contribution to increased eco-efficiency in agriculture. Using aggregate data and econometric methods, the eco-efficiency of 79 countries was computed and a range of factors relating to research, extension, business and policy was examined. Despite data limitations, the analysis produced some interesting insights. For instance public research spending has a positive significant effect for emerging economies, while no statistically significant effect was found for foreign aid for research. However, foreign aid for extension is important in less developed economies. These and other results suggest the importance of context-specific interventions rather than a "one size fits all" approach. Overall, the analysis illustrated the potential of a macro-level diagnostic approach for assessing the role of innovation systems for sustainability in agriculture.

Occurrence of aflatoxin in agricultural produce from local markets in Burundi and Eastern Democratic Republic of Congo

Aflatoxins are noxious secondary metabolites, of certain fungal species, found in food and feed. Contamination of a commodity with aflatoxins is associated with production and storage losses, and subsequently less food availability. Aflatoxins can also pose human health risks and represent a barrier to the development of trade, in both domestic and international markets. In this study, samples of cassava, maize, groundnut, beans, soybean, sorghum and milk, and their processed products were collected from local markets in Burundi and Eastern DRC. In order to investigate the levels of aflatoxin, crop samples were analyzed using a single step lateral flow immunochromatographic assay (Reveal Q+), while enzyme‐linked immune‐sorbent assay (ELISA) was used to analyze aflatoxin‐M₁ in milk, yogurt, and cheese samples. The results revealed the presence of aflatoxins in all samples from both countries, with levels ranging from 1.3 to 2,410 μg/kg. Samples collected from Burundi contained relatively higher (p > 0.0.5) levels of aflatoxins. In 51% of all the crops samples, total aflatoxin contamination was above the EU maximum tolerable level of 4 μg/kg. Processed products, particularly from groundnut, maize, and sorghum, had the highest levels of aflatoxin contamination when compared to unprocessed grain. With regard to milk and dairy products, the level of aflatoxin‐M₁ ranged from 4.8 to 261.1 ng/kg. Approximately 29% of milk and yogurt samples had aflatoxin‐M₁ higher than the EU regulatory limit of 50 ng/kg, whereas 20% of cheese samples were found to be contaminated at levels higher than the maximum limit of 250 ng/kg. These results can serve as the basis for pre‐ and postharvest approaches to reduce aflatoxin contamination in agricultural commodities in Burundi and Eastern DRC in order to reduce health risk, avoid reduced production in livestock, and open up export markets.

Incidence and farmers' knowledge of aflatoxin contamination and control in Eastern Democratic Republic of Congo

Despite efforts to reduce aflatoxin contamination and associated mycotoxin poisoning, the phenomenon continues to pose a public health threat in food and feed commodity chains. In this study, 300 samples of cassava, maize, and groundnut were collected from farmers' households in Eastern DRC and analyzed for incidence of aflatoxins. In addition, the farmers' level of knowledge of the causes and consequences of contamination and the measures for prevention were also examined by administering questionnaires to a cross section of 150 farmers. The results showed the presence of aflatoxins in all samples, with levels ranging from 1.6 to 2,270 μg/kg. In 68% of all samples, total aflatoxin contamination was above 4 μg/kg, the maximum tolerable level set by the European Union. Farmers ranked high humidity, improper storage practices, and poor soils as potential causes of aflatoxin contamination and changes in color, smell, and taste, and difficulty in selling crops as consequences. They identified crop management practices as the most effective way to control contamination. The results also revealed that most farmers apply preharvest crop management practices as a means of controlling contamination. More educated households were more knowledgeable about aflatoxins. Female-headed and married households were less likely to be willing to pay for aflatoxin control. About 28% of farmers claimed to be willing to allocate resources to seed intervention while a smaller proportion agreed to pay for training and information services. The result further suggests that an adoption of pre- and postharvest technologies together with awareness creation is still required to reduce aflatoxin contamination in the country.

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.

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.