Agricultural productivity has increased dramatically in recent decades, but some regions of the world still aren’t producing enough food. In Sub-Saharan Africa especially, food production remains persistently low, even though the tools for improving farm productivity are available. Inputs such as fertilizer and hybrid seeds have been shown to increase yields and be highly profitable investments. In response, many countries heavily subsidize the cost of fertilizer, but experts and policymakers debate whether this is the best approach. Research suggests that lack of capital may not be the only barrier to adoption and that other factors, such as risk of drought or crop failure, as well as the possibility that buyers—not the farmer—will reap higher profits, may inhibit farmers from investing in their farms.

IPA’s research in the agricultural sector focuses on identifying the drivers of low adoption of technologies and investigates a wide range of approaches that aim to increase the productivity of small-scale farms. Evidence thus far shows new ways to increase usage of inputs, for example with agricultural lending tailored to the farmers’ seasonal cash flow and by offering farmers insurance (also see here). Other research shows fertilizer is not always correctly applied, and may not be profitable for many farmers who do not use the right amount.

Key Findings