DP10743 Low Quality, Low Returns, Low Adoption: Evidence from the Market for Fertilizer and Hybrid Seed in Uganda

Author(s): Tessa Bold, Kayuki Kaizzi, Jakob Svensson, David Yanagizawa-Drott
Publication Date: August 2015
Keyword(s): agriculture, substandard inputs, technology adoption
JEL(s): O13, O33, Q16
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10743

To reduce poverty and food insecurity in Africa requires raising productivity in agriculture. Systematic use of fertilizer and hybrid seed is a pathway to increased productivity, but adoption of these technologies remains low. We investigate whether the quality of agricultural inputs can help explain low take-up. Testing modern products purchased in local markets, we find that 30% of nutrient is missing in fertilizer, and hybrid maize seed contains less than 50% authentic seeds. We document that such low quality results in negative average returns. If authentic technologies replaced these low-quality products, average returns for smallholder farmers would be over 50%.