Risk and Adoption of Hybrid Maize in El Salvador

An enduring concern in economic development is the extent to which risk impedes adoption of new technologies and slows the rate of yield expansion in the production of food crops. Almost by definition, poor farmers in developing countries are associated with a reluctance to take risks, presumably because risk taking would jeopardize their subsistence. This association implies that lowincome farmers will not change their more stable, lower-return traditional techniques for riskier, more profitable practices and varieties. What J. A. Roumasset (1979c) calls the conventional wisdom that risk retards adoption has been proposed in several variations, and it seems to have lasting appeal in the development literature. Several contributors to a book edited by C. R. Wharton, Jr. formally advanced the risk-inhibits-innovation hypothesis in 1969, J. c. Scott constructed a political theory of moral economy on the subsistence ethic in 1976, and J. K. Galbraith in 1979 concluded that aversion to risk represents an important explanation for poverty in the developing nations. Until recently, knowledge about the relation among poverty, risk, and adoption was founded on a concensus of speculation, casual observation, and hypothetical intuition. In the last ten years, speculation has gradually given way to an embryonic but rapidly expanding body of empirical measurement. This paper begins with a brief summary of some of the recent empirical work relevant to risk and the development and transfer of technology. The discussion in the survey embraces two risk-related issues confronting practitioners who make "microscopic" decisions on technological policy in developing countries. Should technical scientists in national agricultural research programs design fundamentally different technologies to accommodate different risk attitudes of farmers? Should corrective policy such as a crop insurance scheme be carried out when the adoption of technical recommendations falls short of expectations.? The literature review accents some of the dimensions to these questions and thus builds an analytical framework for a case study on risk and adoption of maize