Key message 2 – The risk of poor quality agricultural inputs poses a major barrier to technology adoption as input quality is often hard for farmers to detect.
A major barrier to agricultural technology adoption in sub-Saharan Africa is the low quality of many agricultural inputs – coupled with a lack of reliable information on input quality. Demonstration plots across Africa have shown that modern agricultural inputs like improved seeds and fertiliser have the potential to improve yields. However, in practice, the prevalence of poor-quality or counterfeit seeds and other inputs in the market can make it inadvisable for small-scale farmers to take the risk of purchasing inputs that promise higher yields. Instead, for example, farmers rely on seeds from their own harvest, resulting in substantially lower yields. Information gaps play a critical role in these input market inefficiencies.
Research supported by the IGC and the Swedish Research Council shows that farmers may be wise not to invest in some inputs, given widespread poor product quality. A recent study in Uganda, where only 2% of smallholder farmers use inorganic fertiliser, found that the vast majority of fertiliser available is of substandard quality. Additionally, the study uncovered evidence that very few of the available hybrid maize seeds improved crop yields, likely due to ‘fake’ or poor-quality inputs. Farmers often complain about low quality fertiliser and seeds and this study helped quantify the size of the problem beyond anecdotal evidence.
A recent study in Uganda, where only 2% of smallholder farmers use inorganic fertiliser, found that the vast majority of fertiliser available is of substandard quality.
In the study, ‘mystery shoppers’ purchased urea fertiliser and hybrid maize seeds from a number of randomly chosen small outlets across Uganda. First, to test the quality of the seeds, test plots were grown. Based on the yields, the researchers concluded that the hybrid seed bags bought from local retailers seemed to be diluted with only half the seeds being hybrid (the other half were traditional seeds). Second, to test the quality of the fertiliser, samples were sent to a laboratory to determine its chemical composition. Urea fertiliser – the most common type on the market – was found to have 33% less nitrogen content than advertised. There was wide variation in the results, but only 20% of fertiliser samples bought locally were profitable when applied to hybrid seeds and only 1% yielded a return of over 10%. By contrast, authentic inputs would have yielded average returns above 50%.
Figure 1: Average returns from locally-available vs. authentic technologies
The results provide a compelling explanation for low adoption of these agricultural technologies in the Ugandan context – farmers choosing to spend money on the fertiliser or hybrid seeds would in fact receive a negative return on their investments in most cases. The experiment surprisingly found no relationship between fertiliser price and quality, indicating a lack of reliable information on quality. An earlier study in Kenya found that even without product quality problems, official recommendations of how to use inputs can be incorrect or insufficient; the package of fertiliser and hybrid seeds recommended by the Ministry of Agriculture was not profitable for most farmers in the country (Duflo et al., 2008).
These findings highlight the need for better quality information about the appropriate use of inputs, and improved monitoring and enforcement of agricultural input standards. Further work is needed to identify where quality deterioration happens along supply chains – whether during the initial production process or later through poor storage or counterfeiting – and how it can be stopped. It may take time to restore farmers’ trust that agricultural products and technologies meet quality standards, whether through the establishment of more reputable brands or more reliable and transparent ways of testing quality.
Finally, it is worth noting that many parallel challenges exist in ensuring food safety on the consumer side. Consumers are unable to observe many important quality and safety characteristics when purchasing food, similar to the challenge that farmers face when they buy inputs. Inadequate crop and food regulation can have adverse effects on consumers by allowing food with toxins or insufficient micronutrients to enter markets. Recent research shows that consumers value information on food origin, taste, and safety and such information can help resolve market failures and inefficiencies (Hoffmann, 2014).
Much of the recent research on agricultural technology adoption assumes that quality inputs are available and focuses instead on demand-side barriers to uptake. However, supply-side challenges, including the availability of the technology in the first place, should not be ignored. Better information, whether about product quality or about agricultural practices, has a key role to play in addressing both these challenges.