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Strategic Decision-Making: Adoption of Agricultural Technologies and Risk in a Peasant Economy

Mariam, Yohannes and Galaty, John and Coffin, Garth (1993): Strategic Decision-Making: Adoption of Agricultural Technologies and Risk in a Peasant Economy.

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Descriptive and logit analysis were employed to investigate the impact of social, economic and technical factors on decisions to adopt new agricultural technologies in the Ada and Selale districts of Ethiopia. Peasants follow sequential adoption of technologies. In both study areas, priority is given to adoption of crop production augmenting technologies followed by technologies that complement crop production (Ada) and contribute to increases in milk production (Selale). Producers of both regions require existence of certain pre-conditions prior to the adoption of technologies. Ada farmers require more pre-conditions related to livestock production while Selale farmers require more preconditions related crop production.

The impact of indigenous production knowledge and experience on adoption decisions was found not only positive but greater than most economic and social variables. The influence of most socioeconomic variables is greater on technologies that are proven to have a more certain outcome (e.g., fertilizer and pesticides) than on technologies which are either expensive or risky (e.g., cross-bred cows and improved seed).

Risk-averse behaviour of households reduces the probability of adopting new technologies in both study regions. Households may be willing to take more risks if they receive insurance from social networks, governmental and non-governmental organizations or are rich. The results from the Selale and Ada regions suggest that physical inputs and knowledge exert large and significant positive impacts on production when farmers adopt combinations of fertilizer and pesticides (Ada), or fertilizer and cross-bred cows (Selale).

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