Adoption of yield-increasing technologies in poorly integrated crop output markets

Abstract

This paper analyzes the relationship between crop output market and the use of modern inputs of farmers in developing countries. For this purpose, we used a large-scale household dataset collected in rural Burkina Faso. We found evidence that crop output market integration matters in farmer decision to adopt modern inputs. More specifically, an increase of the spatial price dispersion by 10% is significantly associated with a decrease of the probability of using modern inputs by 4%. However, price volatility affects neither the decision to use of the modern nor the intensity of adoption. Our finding implies that in order to succeed, agricultural interventions that target the adoption of modern inputs should be accompanied with market development measures.