03 Jan 2013Working Paper Summaries

The Value of Advice: Evidence from Mobile Phone-Based Agricultural Extension

by Shawn A. Cole

This paper evaluates a new service that provides mobile-phone based agricultural consulting to poor farmers in India. For decades, the Government of India, like most governments in the developing world, has operated a system of agricultural extension, intended to spread information on new agricultural practices and technologies through a large work force of public extension agents. Evidence of the efficacy of these extension services, however, is limited. This paper describes a randomized field experiment examining the potential for an alternate route to improving agricultural management. Specifically, the authors evaluate Avaaj Otalo (AO), a mobile phone-based technology that allows farmers to call a hotline, ask questions, and receive responses from agricultural scientists and local extension workers. Findings show that AO had a range of important, positive effects on farmer behavior. This paper may be the first rigorous evaluation of mobile phone-based extension and, more generally, the first evaluation of a demand-driven extension service delivered by any means. Key concepts include:

Farmers with access to the service were more likely to switch to a pesticide that is both more effective against pests, and dramatically less toxic to humans.
Farmers receiving advice were also quicker to adopt high-value cash crops, planting more cumin and demonstrating more knowledge about it.
The paper presents the first rigorous evidence that a low-cost agricultural extension service (costing as little as $.60 per farmer per month) can change behavior.
There is a "digital divide" in India. There are systematic differences in adoption and use of the service, even among a relatively homogeneous group of farmers, and even for a technology that was specifically designed to be accessible to an illiterate population.
Surveying by mobile phones can be conducted effectively and cheaply in a developing country context.
There is considerable demand among farmers for high quality agricultural information.
The information and communications technology (ICT) delivered timely, relevant, and actionable information and advice to farmers at dramatically lower cost than any traditional service.
The ICT significantly changed farmers' sources of information for sowing and input-related decisions-in particular, farmers relied less on commissions-motivated agricultural input dealers for pesticide advice.

Author Abstract

Attempts to explain the astonishing differences in agricultural productivity around the world typically focus on farm size, farmer risk aversion, and credit constraints, with an emphasis on how they might serve to limit technology adoption. This paper takes a different tack: can managerial practices explain this variation in productivity? A randomized evaluation of the introduction of a mobile-phone based agricultural consulting service, "Avaaj Otalo (AO)" to cotton farmers in Gujarat, India, reveals the following: demand for agricultural advice is high, with more than half of farmers calling AO in the first seven months. Farmers offered the service turn less often to other farmers and input sellers for agricultural advice. Management practices change as well: we observe an increase in the adoption of more effective pesticides and reduced expenditure on less effective and hazardous pesticides. Treated farmers also sow a significantly larger quantity of cumin, a lucrative but risky crop. Interestingly, use of the service is increasing in the level of farmer education, but education levels do not affect the size of treatment effects. Farmers appear willing to follow advice without understanding why the advice is correct: the average respondent does not demonstrate improved agricultural knowledge, though there is some evidence educated farmers learn from the service.