Evidence from Uttar Pradesh, India
Speakers: Travis Lybbert, Associate Professor of Agricultural and Resource Economics, University of California, Davis,
and David J Spielman, Senior Research Fellow, International Food Policy Research Institute, Washington, DC.
Date: 10 December, 3.30-5 p.m.
For the rural poor in many developing countries, welfare improvements are typically contingent on enhancements in agricultural productivity. With reductions in government support for public research and extension in many such countries, the dissemination of new agricultural technologies that enhance productivity is increasingly shaped by the private sector. For many technologies, however, the private sector lacks the information and incentives required to serve the needs of small-scale, resource-poor farmers.In these cases, a variety of targeting mechanisms are often proposed to encourage technology dissemination, ranging from subsidies provided by the public sector to promotional discounts distributed by the private sector.
This study explores the design of several targeting strategies for a resource-conserving agricultural technology - laser land leveling (LLL) - in Uttar Pradesh. LLL employs a laser guidance system to calibrate a simple tractor-drawn implement that levels undulations in a farmer’s field, thereby reducing the volume of water required for irrigation and decreasing the cost of water extraction.
This study combines a binding auction mechanism to estimate willingness to pay for LLL services with a randomised controlled trial to evaluate the impact of LLLs on several farm-level outcomes. The study finds that LLL reduces water and diesel use for pumping by 25 per cent overall. With these results and additional data on service provider costs, we use micro-simulations to assess alternative LLL targeting strategies in terms of the technology's potential coverage, cost-effectiveness, water savings, and social welfare gains. Simulations suggest that among several strategies, it is possible to bring more land under LLL at a lower cost by segmenting markets using an implicit second-degree mechanism: a 50 per cent discount on the first hour of leveling.
This seminar is being held jointly with the International Food Policy Research Institute