Credit, Price Premiums, and Application Monitoring to Encourage the Adoption of Aflasafe in Senegal

Credit: IITA

Aflasafe is a new product that farmers growing groundnuts or maize can apply to reduce aflatoxin—a poisonous substance. Although using Aflasafe could open lucrative export markets for farmers in sub-Saharan Africa, farmers have been slow to adopt without sufficient incentive. In Senegal, researchers are testing a new contract arrangement between farmers and cooperatives that includes credit to purchase Aflasafe, training on its use, and a price premium for certified low-aflatoxin groundnuts on farmers’ decisions to adopt Aflasafe, aflatoxin levels, and output sales.

Policy Issue

Smallholder farmers in low-income countries may not invest in upgrading the quality of their agricultural outputs if they do not have access to high-quality inputs, like fertilizer, credit to finance the investment, or guaranteed demand for their products to make the investment worthwhile. In addition to spurring agricultural productivity, the adoption of high-quality inputs is important in curbing the growing spread of pests and plant diseases that pose a threat to crops and human health alike. Specifically, aflatoxin is a poisonous substance that can sprout on crops in hot, humid climates and cause cancer in humans as well as economic harm by destroying up to 25 percent of crops. Reducing aflatoxin incidence could help address rising liver cancer rates as well as open export markets in areas suffering from low quality standards and high rates of aflatoxin. The International Institute of Tropical Agriculture (IITA) developed a new product to fight aflatoxin (Aflasafe), which reduces aflatoxin incidence by 80 – 99 percent when farmers apply the product during the growing season.

Although the availability of Aflasafe is rapidly increasing, it is not clear how to best induce widespread adoption by farmers. Despite the health risks associated with frequent exposure to aflatoxin, awareness among farmers and the general public remains low. Can certain contract features that provide both access to Aflasafe for farmers and better incentives for quality drive farmers to adopt Aflasafe and, thereby, reduce aflatoxin levels in their crops?

Context of the Evaluation

The groundnut industry in Senegal has suffered from limited access to international markets and high-aflatoxin levels in foodstuffs for export. Smallholder farmers in Senegal’s peanut basin typically grow groundnuts, like peanuts, for both commercial sale and home consumption. Farmers often belong to cooperatives that provide the information and credit needed to buy seeds and fertilizer to sustain production. These cooperatives also organize an outlet for farmers to sell their crops almost exclusively to the parastatal groundnut company at a fixed price with no bonus for quality. Other smaller processing firms and exporters, however, may pay a premium for high-quality, low-aflatoxin groundnuts. The market has struggled to link these buyers to certified suppliers of low-aflatoxin groundnuts, and without this guaranteed demand for higher-quality, farmers do not currently have strong incentives to use inputs that increase the quality of their groundnuts.

Details of the Intervention

In partnership with IITA, researchers developed a contract for peanut farmers to assess how a bundle of features affect their decisions to adopt Aflasafe in Senegal. Researchers randomly assigned 40 villages to one of two groups: 

  • Contract with Credit + Price premium + Monitoring and Aflasafe advice (20 villages, 200 farmers): Combining three key features (credit, training, and price premium certainty), farmers were offered Aflasafe at no up-front cost during planting and were required to repay the retail cost upon delivering the groundnuts to the cooperative for sale. They received monitoring from cooperative extension agents and advice on the proper use of Aflasafe. They were guaranteed a higher price for low-aflatoxin groundnuts upon delivering the groundnuts to the cooperative for sale.
  • Comparison (20 villages, 200 farmers): The comparison group did not receive a contract offer. They were offered Aflasafe at the regular price and informed that their groundnuts would be tested for aflatoxin upon delivery to the cooperative.

During the planting season starting in July 2019, the researchers primarily measured how these interventions affected Aflasafe adoption and, secondarily, aflatoxin levels in groundnuts delivered to the cooperative post-harvest. At the end of the evaluation in June 2020, they also measured groundnut yields, input costs, and revenues to estimate impacts on household profits and commercialization behavior.

In 2021, researchers plan to implement a follow-up intervention in which they will randomly vary contract terms to understand the mechanisms underlying effects measured in the first experiment. Researchers will also measure prices and aflatoxin levels in the local weekly markets to assess whether Aflasafe adoption has affected markets more broadly, by potentially increasing prices or opening export markets.

Results and Policy Lessons

Project ongoing; results forthcoming.