Risk, institutional change and technology adoption for low income farmers : an analysis of new bean alternatives for the southern Huila region of Colombia, South America
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Economic development policies recently have placed increased interest on efforts to find solutions to food and population problems for low income countries. A natural area of focus for these policies has been the low income farms where birth rates are high and the economic circumstances in which the families find themselves are substandard. This low income farm problem has been approached by development of technologies to improve output levels for crops which are desirable from the point of view of home consumption and income producing potential. The present analysis considers a technology adoption problem for the Southern Huila region in Colombia. Characteristics of the new technology, attitudes toward risk, the institutional setting for farmers, and quality of information on new technology and prices are examined as factors influencing adoption. Information on the new technology was developed from surveys by the CIAT Bean Team in Southern Huila. These surveys generated inputoutput coefficients for on-farm trials as well as information on the characteristics of households and farm units. Additional primary information was collected from a survey to determine attitudes toward risk and perceptions of uncertainty. For the former, risk aversion coefficients consistent with those indicated in the recent literature were estimated. Low income farmers were found to be relatively risk averse. For the latter, substantial discrepancies were discovered between perceptions of researchers on one hand and the farmers on the other related to the uncertainty associated with yields and prices of beans and other crops. The instrument used to elicit this information was novel and appears to have substantial potential as a mechanism for better directing extension information programs and, as well, understanding attitudes toward adoption of new technology by low income farmers. The major hypothesis of the study related to the relative importance of institutional factors as compared to characteristics of new technologies for influencing adoption. The development of new technologies for low income farms is a process which requires time and substantial resources. At the same time, there may be institutions affecting farmers which can be altered with low political and economic costs. Two of these for the Southern Huila farmers related to bean price stabilization and improvement. On-farm storage options and marketing organizations were examined for their potential for altering characteristics of prices received by farmers adopting the new bean technology. Results indicated that the institutional factors could be altered so that risk averse farmers would find the existing new technology attractive for adoption. The general conclusion from the research is that the adoption problem is more broad than traditionally perceived. New technologies should be developed incorporating available information about farming systems and the circumstances in which the farmer or farming system is operating. Many times, alterations in these factors, traditionally avoided because of political sensitivity, can be as important in improving the economic lot of low income farmers as the development and distribution of new technologies. A second conclusion concerns how the individual farmers are studied. The referenced gambling instruments employed in eliciting risk attitudes and perceptions of uncertain ty would appear to have important potential for better directing efforts at improving the adoption of the new technologies and identifying problems associated with low adoption rates for technologies which on the surface appear to be attractive for low income farmers.
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