Franklin Simtowe, Solomon Asfaw, Aliou Diagne, Bekele Shiferaw:
The Impact of Agricultural Technology Adoption on Marketed Surplus: the Case of Improved Groundnut Varieties in Malawi

FRANKLIN SIMTOWE¹, SOLOMON ASFAW¹, ALIOU DIAGNE², BEKELE SHIFERAW^1
1International Crops Research Institute for the Semi-arid Tropics (ICRISAT), Kenya
²Africa Rice Center (WARDA), Impact Assessment, Benin

The participation of farmers in markets is widely acknowledged as a key path to welfare improvement for them. Through the adoption of improved technologies, farmers may increase their productivity and consequently increasing the portion of the production which enters into the market- also referred to as the marketed surplus and their incomes. An understanding of the behaviour of marketed surplus and the variables affecting it is an essential element of effective planning and programme design as it can facilitate the development of sound policies with respect to agricultural marketing and prices, imports and exports and the overall national rural development objectives.

This study examines the causal impact of the adoption of improved groundnut varieties on marketed surplus. The study is based on a household survey data of 400 groundnut producing households in rural Malawi collected by the International crops research Institute for the semi-Arid tropics in the year 2008. The paper applies the counterfactual outcomes framework of modern evaluation theory to estimate the Local Average Treatment Effect (LATE) of adopting improved groundnut varieties on the amount of marketed surplus and that of marketable surplus of groundnuts. We find that 45% of the groundnut producers are autarkic while the rest are net sellers. The econometric analysis shows that the adoption of improved groundnut varieties has a positive and significant impact on the amount of marketed surplus as well as that of marketable surplus. The adoption of improved groundnut varieties significantly increases the amount of marketable surplus by 12kg per capita and it increases the amount of marketed surplus by 8kg per capita. We also find that increased production and higher prices are some of the other important determinants of the quantity of marketed surplus. The findings suggest that there is a scope for increasing the participation of farmers in the marketing of groundnuts through increased cultivation of improved groundnut varieties.

Keywords: Counterfactual, groundnuts, Malawi, marketed surplus

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Contact Address: Franklin Simtowe, International Crops Research Institute for the Semi-arid Tropics (ICRISAT), GT - Institutions, Markets, Policy & ImpactsNairobi, Kenya, e-mail: fsimtoweyahoo.com