RISK, EFFICIENCY, AND THE ADOPTION OF MODERN CROP VARIETIES - EVIDENCE FROM THE PHILIPPINES

A high priority in agricultural development assistance since the 1960s has been the generation of technology that would enable farmers to increase their productivity. Much research has been devoted to the causes of low agricultural productivity and the longer-term productivity gains that may be forth-coming from modern technology, but less attention has been devoted to the process of technology adoption by low-income farmers. In this article we address the empirical analysis of technical efficiency as farmers adopt new production technology, taking into account production risk and learning. We utilize recently developed efficiency criteria applicable when production is risky and implement these criteria using an approximation to a representative farmer's decision model. Pooled time series and cross-sectional data collected by the International Rice Research Institute are used to investigate the behavior of rice farmers when a modern rice variety was introduced in a region of the Philippines in the 1970s. -from Authors