Information, Credit, and Inputs: the Impacts and Mechanisms of a Program to Raise Smallholder Productivity
Josh Deutschmann & Emilia Tjernström
Department of Agricultural & Applied Economics
University of Wisconsin - Madison
Thursday, December 6, 2018
Taylor-Hibbard Seminar Room (Rm103)
3:45 pm-5:00 pm
Raising smallholder agricultural productivity has the potential to boost GDP and to reduce rural poverty, but the evidence on how to best achieve productivity gains remains mixed. Technologies exist that can increase smallholder yields and profits, but researchers and practitioners grapple with how to induce technology adoption in this population. This task is particularly challenging and pressing in sub-Saharan Africa, where agricultural yields lag all other regions and where poverty is often concentrated in rural areas. This paper presents randomized evidence of a rare scaled-up success story: One Acre Fund's (1AF) small farmer program. Much like anti-poverty ``graduation'' programs, 1AF's program is designed around the notion that farmers face multiple constraints simultaneously. Participating farmers receive input loans, crop insurance, and information about improved farming practices. Analyzing data from a pre-registered randomized control trial, we show that participation in 1AF's program causes statistically and economically significant increases in yields and profits. We find evidence that relaxing information constraints alone unlikely explains the program's success. Using various approaches to heterogeneity analysis, we find suggestive evidence that more disadvantaged farmers benefit more from the program and that program impacts accumulate over time. Both results are in line with the literature on graduation programs, which typically target the most disadvantaged, provide them with a bundle of different types of support, and continue to work with them as they climb out of poverty.