Arjunan Subramanian

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Arjunan Subramanian

University of Glasgow, Glasgow, UK Parmod Kumar

Institute of Social and Economic Change, Bangalore, India

Innovation and welfare effects of extension services: Experimental evidence from India

India Agricultural outlook forum 2019 Ministry of Agriculture & Farmers Welfare

Government of India

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Based on the project

“Information, Market Creation and Agricultural Growth”

funded by

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Motivation

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Research Questions

• Can farmers’ income be doubled?

• Can providing agricultural information improve farm productivity among small holder agriculture?

• What are the labour market consequence of increased farm incomes?

• What are the consequence of increased farm income

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Farming practices below optimal

• New pests and diseases

• Development of resistance by old pests

• New seed varieties with better traits

• Change in chemical composition of soil Climate Change!

Huge potential exists for yield increase & reduction in cost of cultivation

• Better sprays

• Choice of appropriate variety of seeds

• Application of fertilizer at the right time and quantity

5

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How information is delivered?

Traditional agriculture extension

• Considerable resources spent by government

• Few farmers report contact/limited evidence of impact

• Serious governance issues

• Concerns about two-way information flow

• Agro-dealers mainly provide information – perverse

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Novelty of the study

 General equilibrium effects – doubling farmers’

income

 Relaxing multiple constraints with extension

information – credit; inputs; water; soil quality

 Quantifying spillover from information dissemination

7

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Matrix of effects in yield (quintals/ acre)





Intervention

Effect size

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Estimation strategy

9

𝑂

_𝑖𝑡

= 𝛽

₀

+ 𝛽

₁

𝑇𝑟𝑒𝑎𝑡

_𝑖

+ 𝛽

₂

𝑆𝑝𝑖𝑙𝑙 + 𝛽

₃

𝑂

_𝑖0

+ 𝑌

_𝑡

+ 𝛿

_𝑣

+ 𝜀

_𝑖𝑡

𝑂

_𝑖𝑡

- outcome of interest in crop plot i in period t

𝑇𝑟𝑒𝑎𝑡

_𝑖

- dichotomous variable equal to 1 if household received treatment

𝑆𝑝𝑖𝑙𝑙 – dichotomous equal to 1 if spillover farmers 𝑂

_𝑖0

- value of the dependent variable at the baseline 𝑌

_𝑡

- year fixed effects

𝛿

_𝑣

- group fixed effects

𝜀

_𝑖𝑡

- error term

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11

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Intervention–relax multiple constraints

• Providing real-time, comprehensive and

contextual agricultural information to treated farmers

 Crop production – soil testing, fertilizer, pesticide

 Livestock production – feed fodder, diseases control

 Regular updates of input and output price

 Eligibility on agricultural credit

 Crop insurance

 Cattle insurance

13

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Intervention–relax multiple constraints

• We hired scientists from UAS Bangalore and Raichur

• Disciplines: agronomy; entomology; pathology;

biotechnology; genetics; agri economics

• Tablet with information and real-time link with experts at Agri Universities

• Meet treated farmers every 12th day in their farm

• Provide information on every aspect throughout

the crop-cycle for 3 seasons

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Focus crops

Gubbi Siriguppa

Paddy Paddy

Red Gram Bengal Gram

Ragi Sunflower

Cotton

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There are 30 other crops grown that includes horsegram;

maize; sugarcane; cowpea; barley; groundnut; castor; and

green gram

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Samples split by treatment group

Statistics Number of

samples Farmers total

Treatment farmers Spillover farmers Control farmers

1320 600 120 600

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Survey timeline – panel data

Survey timeline Reference year

Baseline round 0 Follow-up round 1 Follow-up round 2 Follow-up round 3

June 2012- May 2013 July 2013 – May 2014 June 2015 – May 2016 June 2016 – May 2017

17

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Household incomes

Dep. Var. :

Household income from sources:

Log crop

income Log livestock

income

Log off- farm income

Log nonfarm income

Treated Spillover

0.3567**

(0.1554) 0.2641*

(0.1551)

-0.1456 (0.3283)

-0.4740 (0.3313)

0.0912***

(0.0267) 0.0458 (0.0637)

-0.3521***

(0.0851) -0.3805**

(0.1269)

Control mean Dep. Var. ^216,213 ^-3793 ^12,993 ^29,697 Village FE

Year FE

YES

YES YES

YES

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Labour market – extensive margin

19

Dep. Var. :

Number of family and hired labour Crop

cultivation Livestock Off-farm

work Nonfarm work

Treated Spillover

9.2727***

(2.2913) 9.6129***

(1.8131)

-0.0675 (0.2476)

0.0335 (0.2645)

0.0908***

(0.0344) 0.2322***

(0.0519)

-0.1636*

(0.0995) -0.1636 (0.1122)

Control mean Dep. Var. ^53.4825 ^1.0122 ^2.5017 ^1.3265 Village FE

Year FE

Clustered SE

YES YES YES

R-squared Observations

0.2542

4,250 0.3416

1,983 0.4741

2,084 0.3630 2,084

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

Standard errors in parentheses clustered by GP code (12 clusters) * p < 0.1, ^** p < 0.05, ^*** p < 0.01

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Labour use – intensive margin

Dep. Var. :

Hours /days worked to total employed Crop

cultivation Livestock Off-farm

work Nonfarm work

Treated Spillover

-0.4201**

(0.1905) -0.3365**

(0.1660)

0.1044 (0.1431) 0.4911**

(0.1770)

3.8965 (3.1539) 11.0604*

(6.5880)

1.3263 (9.9914)

7.9254 (15.0317)

Control mean Dep. Var. ^1.7351 ^3.3320 ¹⁰³ ²⁹³ Village FE

Year FE

YES

YES YES

YES

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Household crop income - post treatment

21

Dep. Var. :

Crop income by program round

One round Two rounds Three rounds Treated

Spillover

0.3085**

(0.1594) 0.2284 (0.1650)

0.2953 (0.1865)

0.1709 (0.1944)

0.3567**

(0.1554) 0.2641*

(0.1551) Control mean Dep.

Var. 197,613 187,027 216,213

GP FE Year FE

Clustered FE

YES YES YES

YES YES YES R-squared

Observations 0.6719

811 0.5067

1,171 0.4502

1,599

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Crop yield – all crops

Dep. Var. :

Crop yield by program round

Spillover

0.2648***

(0.0606) 0.3072***

(0.0736)

0.4818***

(0.0769) 0.4723***

(0.0891)

0.5072***

(0.0789) 0.4763***

Var. 18.3985 17.8756 18.0919

GP FE

Year FE YES

YES YES

YES

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Crop yield – cotton

23

Dep. Var. :

Cotton yield by program round

Spillover

0.1168 (0.0782)

0.1175 (0.1090)

0.1310*

(0.0700) 0.1534 (0.0981)

0.1240**

(0.0546) 0.1002 (0.0856) Control mean Dep.

Var. 7.9717 6.6782 6.6017

GP FE Year FE

Clustered FE

YES YES YES

Observations 0.4950

601 0.4572

852 0.4070

1,088

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

(24)

Crop yield – paddy

Dep. Var. :

paddy yield by program round

Spillover

0.1737***

(0.0425) 0.2186***

(0.0474)

0.1796***

(0.0253) 0.2162***

(0.0281)

0.1659***

(0.0280) 0.2020***

Var. 24.6525 25.1372 25.8278

GP FE

Year FE YES

YES YES

YES

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Crop profit - cotton

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Dep. Var. : Profits per acre -yearly

2013-

2014 2014-

2016 2016-

2017 All years Treated

Spillover

-0.2359*

(0.1366) -0.4206 (0.3585)

-0.3507 (0.3314) -1.0326*

(0.6155)

-0.0104 (0.2704)

-0.4816 (0.3496)

-0.1240 (0.1391)

-0.3997 (0.2466) Control mean Dep. Var. 190.4224 627.6106 6934.918 3287 GP FE

Year FE

Clustered FE

YES YES YES

Observations 0.4049

218 0.3036

127 0.4061

146 0.3718 364

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

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Crop profit - paddy

Dep. Var. :

Profits per acre -yearly

2013-2014 2014-2016 2016-2017 All years

Treated Spillover

0.3938***

(0.1043) 0.3294**

(0.1096)

0.7690***

(0.0534) 0.6876***

(0.0705)

0.9006***

(0.2586) 0.9202***

(0.2604)

0.4789***

(0.0234) 0.4408***

(0.0389)

Control mean Dep. Var. ^17,581 ^21,579 ^27,648 ^21,311 GP FE

Year FE

Clustered FE

YES YES YES

R-squared ^0.2887 ^0.0818 ^0.2570 ^0.2531

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

(27)

Price received from crop sold

27

Dep. Var. : Price per quintal

Cotton Paddy

Treated Spillover

0.0264**

(0.0138) 0.0235*

(0.0179)

0.0690***

(0.0150) 0.0676***

(0.0157)

Control mean Dep. Var. 4370 1521

GP FE Year FE

Clustered FE

YES YES YES

Observations 0.4860

1,088 0.4292

2,295

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

(28)

Returns to intervention for all years- cotton

Dep. Var. :

Crop-wise plot level per acre: cotton Log Yield

(quintal) Log profits

(Rs)

revenue Log (Rs)

Log cost (Rs) Treated

Spillover

0.1240**

(0.0546) 0.1002 (0.0856)

-0.1240 (0.1391)

-0.3997 (0.2466)

0.1480**

(0.0545) 0.1209 (0.0925)

0.1392***

(0.0370) 0.0744*

(0.0414) Control mean Dep. Var. 6.6017 3287 28736 25449 GP FE

Year FE YES

YES YES

YES

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

(29)

Returns to intervention for all years- paddy

29

Dep. Var. : Crop-wise plot level per acre: paddy Log Yield

(quintal) Log profits

(Rs) Log revenue

(Rs)

Log cost (Rs)

Treated Spillover

0.1659***

(0.0280) 0.2020***

(0.0296)

0.4789***

(0.0234) 0.4408***

(0.0389)

0.2009***

(0.0300) 0.2343***

(0.0313)

0.1281***

(0.0275) 0.1347***

(0.0326)

Control mean Dep. Var. ^25.8278 ^21,311 ^40,665 ^19,354 GP FE

Year FE

Clustered FE

YES YES YES

R-squared Observations

0.2225

2,295 0.2531

1,978 0.2905

2,295 0.2069 2,426

𝑂 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑇𝑟𝑒𝑎𝑡 _𝑖 + 𝛽 ₂ 𝑆𝑝𝑖𝑙𝑙 + 𝛽 ₃ 𝑂 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝒗 + 𝜀 _𝑖𝑡

(30)

Crop profit and household welfare

Consumption per capita per day Cereals Pulses Fruit&

Vegetable Diary Meat Sugar Elasticity,

log(profit) 0.001

(0.048) 0.418**

(0.149) -0.018

(0.063) 0.353*

(0.214) 0.518*

(0.309) 0.206**

(0.090) Control mean 0.324 0.040 0.193 0.112 0.092 0.039 GP FE

Year FE

Clustered FE

Yes Yes Yes

Yes Yes Yes R-squared 0.494 0.197 0.634 0.129 0.369 0.320

𝑪 _𝑖𝑡 = 𝛽 ₀ + 𝛽 ₁ 𝑃𝑟𝑜𝑓𝑖𝑡 _𝑖 + 𝛽 ₂ 𝐶 _𝑖0 + 𝑌 _𝑡 + 𝛿 _𝑔𝑝 + 𝜀 _𝑖𝑡

(31)

Results summary

• Crop income for treated relative to control increased by 35%

• Combined crop income (treated+spillover) increased by

56% as a result of treatment while for paddy returns almost doubled

• Off-farm income also increases but only by 9% from labour reallocation from non-farm to farm

• Revenues for cotton and paddy were higher while greater cotton cultivation costs reduced profits

• Farmers received higher prices for cotton and paddy

relative to control farmers

³¹

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Thank you very much

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Research design – randomized control trials

Information dissemination experiment

• Sample selection at household/village/gram panchayat?

• Strong spill over effects smaller the area

• Two stage randomization procedure – (1) GP (2) HH

• Random selection of spill over group within the village

• 50 treatment households + 10 spill over households

• 50 control households

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Components of input costs

Dep. Var. :

Input use Crop-wise plot level

All crops Cotton Paddy Plowing

Sowing

0.100**

(0.047) -0.015 (0.033)

0.149**

(0.065) 0.088***

(0.032)

0.091 (0.065)

-0.063 (0.041)

Interculture 0.134*

(0.073) 0.181***

(0.077) Weeding

Ferilizer application

0.102***

(0.039) 0.062**

(0.027)

0.279***

(0.076) 0.102**

(0.052)

0.067 (0.048) 0.082**

(0.036) Insecticide application 0.056* 0.103** 0.019