Agricultural Technology and Povertry Reduction: A Micro-Level Analysis of Causal Effects

Abstract

Agricultural technology opens great opportunities of increasing food grain production in land scarce countries. But questions are raised about the potential adverse or favourable impact of new technology on economic conditions of the poor. This study is aimed at contributing to the debate about the relative importance of ‘direct’ and ‘indirect effects’ of agricultural technology adoption within poverty alleviation strategies. It does so through an empirical investigation of the relationship between technological change, of the Green Revolution type, and wellbeing of smallholder farm households in two rural Bangladeshi regions. The paper assesses the “causal effect” of technological change on farm-households’ income through parametric and nonparametric estimates. In particular, it pursues a targeted evaluation of whether adopting new technology causes poor-resource farmers to improve their income through the ‘matching analysis’. It finds a robust and positive effect of agricultural technology adoption on farm households’ wellbeing suggesting that there is a large scope for enhancing the role of agricultural technology in directly contributing to poverty alleviation.Farm household behaviour, Technology adoption, Poverty alleviation, Propensity score matching