Incentivizing and Nudging Farmers to Spread Information

A paper published in the American Journal of Economics provides insight on the most efficient methods to achieve optimum information dissemination through incentivizing farmers. 

A paper published in the American Journal of Economics provides insight on the most efficient methods to achieve optimum information dissemination through incentivizing farmers. 

Titled “Incentivizing and nudging farmers to spread information: Experimental evidence from Ethiopia”, the paper highlights key findings from an experiment conducted to identify incentive mechanisms that works best for convincing farmers to adopt new technologies.

A major cause for low adoption levels is believed to be a lack of information. Many countries, including Ethiopia, have been utilizing extension service programs. Extension workers are assigned all over the country to train farmers in modern agricultural techniques. 

Ethiopia has one of the largest extension networks in Africa with 80,000 trained extension workers. 

Governments that opt for extension services usually rely on training community members considered “model citizens” – typically more educated and successful farmers.

A number of studies indicate that a shortfall in funding for these initiatives is the primary reason behind the less-than-satisfactory results. Another theory put forth by researchers is that trainees are not putting in their best effort because of a lack of incentives. 

Although it is convenient for extension experts to work with advanced farmers, ordinary farmers are more likely to learn from peers similar to them rather than peers who set a shining example for the rest (BenYishay & Mobarak, 2019).

https://www.researchgate.net/publication/363616708_Incentivizing_and_nudging_farmers_to_spread_information_Experimental_evidence_from_Ethiopia

A paper written by three researchers representing the International Centre of Insect Physiology & Ecology and the Development Economics Group, Wageningen University, lays out findings from an on-ground study conducted to identify what incentives would present the best results.  

The research cites other papers in acknowledging that new information does not always spread spontaneously. Typically, the source is required to make additional efforts, especially when it is difficult or risky for farmers to mimic the behavior of successful adopters.

The paper evaluates the effectiveness of private and social incentive approaches to incentivizing lead farmers to spread information about new agricultural technology. 

Private incentives are granted to the lead farmer alone, while social incentives are recognitions the lead farmer earns for his community. 

The technology introduced was an integrated pest, weed, and soil management system that promises protection from pests and invasive weeds, and provision of high-quality feed for livestock.

The experiment was implemented in the Amhara region, where farmers were organized into 571 one-to-five groups.

 The control group received training but was not offered an incentive to share its learnings.  

Another group was assigned a private reward incentive, where group leaders were promised a modern sickle if they trained enough members. The final group was offered a social prestige incentive, which came in the form of a certificate that acknowledges their good performance. 

After they were assigned incentives, the experimenters further divided the groups into two: a gain or loss frame.

Half of the group leaders in the private reward group were promised a sickle as a bonus in case of sufficient performance. The other half of the leaders received the sickle as an up-front reward but were told they would have to return it if they failed to share knowledge with at least half of their group. These group leaders were in the “private incentive framed as a loss” group. A similar scheme was applied to the social incentive arm. 

Findings

  • Group leaders who receive an incentive work harder than their peers from the control group to share information. Introducing a loss frame combined with a social incentive causes leaders to work even harder. This points to the salience of shame as a motivational emotion. 
  • The loss frame did little to improve the performance when combined with a material reward. This is consistent with the idea that several leaders did not believe that they would lose their up-front reward in case of underperformance. 
  • The paper suggests that the study and its findings offer a learning opportunity for policymakers. 

Read the full paper here.

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