Technology adoption by resource-poor farmers: considering the implications of peak-season labor costs

Abstract Seasonally-specific cultivation patterns of farm crop enterprises often create periodic labor shortages. New technologies that require labor inputs during such labor-scarce seasons are less likely to be adopted. Financial ex ante assessments of technology alternatives, however, neglect the implications of seasonal labor shortages. Standard returns to labor estimates assume that the value of labor to farmers is constant despite temporary increases in demand. This paper develops an alternative measure, returns to opportunity-costed labor (RTOCL), which discerns the seasonally-changing costs of labor. RTOCL more accurately reflects farmer decision criteria and serves as a useful measure in ex ante analysis of technology interventions. A case study of a bush fallow agricultural system in the Peruvian Amazon illustrates how seasonal labor shortages lead to farm management tradeoffs that affect the prospects of technology adoption. Two improvements of a new upland rice variety are contrasted: higher yield versus early maturity. Empirical results of an agro-economic mathematical model reveal that the early maturity characteristic enables rice to become more complementary to peak-season labor demands of the agricultural system. This early maturity characteristic permits farmers to cultivate larger areas and reap greater financial benefits than a variety with a high yield characteristic. Model results support the need to address heterogeneous seasonal labor demands when developing and disseminating agricultural technologies intended to benefit resource-poor farmers.