Smallholder farmers’ adoption of productivity-increasing technologies in Ethiopia: The role of user-centric bundling

It is widely acknowledged that to improve productivity and food security in Africa, the adoption of productivity-increasing technologies by smallholders should increase. However, the adoption patterns of technologies by smallholders is heterogeneous and unpredictable that cannot be explained with the current approaches that are commonly used in smallholder adoption studies. This thesis uses user-centric approach to deepen the understanding of smallholders’ adoption of productivity-increasing technologies in Ethiopia. Qualitative data on the adoption of legume technologies by smallholders reveal barriers that hinder adoption at three stages of the process: as negative expectations, as impediments to translating adoption intentions into behaviour and as impediments to impact after adoption, thus hindering the continued use of technologies. The thesis further examines the role of experiences in purchase decisions of farm-inputs to provide empirical evidence into the adoption decision process by smallholders. Drawing on marketing and consumer psychology literature and survey data from rural Ethiopia, the thesis shows that on-farm and market experiences significantly impact purchase decisions, and part of the impact of experiences on purchase decisions are mediated by farmers’ perceptions of inputs. Bringing in bundling theory from the marketing literature to the smallholder context and using a conjoint experiment, a proven marketing technique for designing new products, services and bundles, this thesis provides insights into the potential role of bundling agricultural inputs and service on smallholders’ preferences to soyabean technologies. The empirical findings from 252 smallholders suggest that product bundling enhances smallholders’ preferences and hence intentions to adopt technologies but that bundles must be designed carefully following a smallholder-centric approach. Using a within subjects field experiment on 341 small-scale farmers in rural Ethiopia, the thesis also test the effect of bundling farming inputs, microloans, and output market contracts on purchase behaviour and assess the importance that different buyers assign to the bundle components. The results reveal that smallholders are 11.26 times more likely to purchase inputs when the constraints in the capital and output markets are jointly addressed compared to addressing only the constraints related to the input markets. The thesis implies that proper designing and marketing of input products and services that meet the needs and expectations of smallholders can enhance positive experiences and continued adoption. The findings also imply that bunding can be an effective and precise instrument to overcome adoption barriers that are rooted in the institutional gaps.