Impact of improved maize variety adoption on smallholder farmers’ welfare in Benin

Abstract

This paper aims to analyze the impact of improved maize adoption on farmers’ welfare in Benin, using a random sample of 356 maize farmers. We provide a rigorous estimation by addressing selection bias and endogeneity issues. First, we applied a double-hurdle model to identify factors that inform farmers’ decision to adopt improved maize. Second, we used the instrumental variable model to assess the impact of improved maize on farmers’ income, poverty status, and poverty gap. For this, we used the predicted area under improved maize from the double-hurdle model as an instrument for the observed area under improved maize. We found that farm size, extension services, training on improved seed, and farmers’ location are key variables that affect both farmers’ decision and the amount of land under improved maize. We also found evidence that adoption of improved maize is positively associated with yield, income, and poverty reduction. Finally, we found no heterogeneous impacts of improved maize among poor and nonpoor farmers. Adoption of improved maize favors small landholding farmers but did not have a significant impact on income for those who own large farms size. Overall, our results suggest that improved maize variety is important for rural development.