ATAI-supported research, “Examining Underinvestment in Agriculture: Returns to Capital and Insurance Among Farmers in Ghana” was featured today on NPR’s Morning Edition, after being featured on NPR’s popular podcast Planet Money.
Underinvestment in agricultural inputs such as fertilizer or labor is thought to drive low crop yields throughout the developing world. Researchers Chris Udry and Dean Karlan in northern Ghana evaluated the underlying reason for underinvestment by examining the relative effectiveness of cash grants and insurance grants in improving crop yields. Results suggest that uninsured risk, rather than a lack of capital, is the primary constraint on investment. Researchers found that farmers who received an insurance grant spent more on fertilizer and hired labor, and also cultivated more land than those who received cash grants. This indicates that risk, rather than a lack of capital, appears to drive underinvestment in agriculture in Northern Ghana – when farmers were provided with weather insurance they spent more on inputs such as chemicals, land preparation, and labor.
Listen to both features, below, and learn more about the completed study, and the ongoing ATAI Adoption study it has inspired, “Disseminating Innovative Resources and Technologies to Smallholders (DIRTS) in Ghana” linked in the right sidebar.
Special thanks to research implementation and media support from Innovations for Poverty Action and Lindsey Shaughnessy.