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Yield-enhancing agricultural technologies, like improved crop varieties, are widely promoted in developing countries to improve the food security, income and welfare of farm households. Nonetheless, farm households show low adoption rates of these technologies. To gain more insight into the drivers of and the barriers to the adoption of improved crop varieties, we study the adoption of improved sunflower varieties by smallholder farmers in Tanzania. Unlike most earlier studies, we distinguish between the initial adoption and the extent of adoption. Additionally, we investigate the roles of market constraints and liquidity constraints, which are largely ignored in previous adoption studies. We find that risk aversion and liquidity constraints are barriers to adoption, whilst radios and extension service are important information channels for new technologies. Our results can help to improve policies, development programmes and business decisions and finally to enhance agricultural productivity and farm household welfare.

This paper investigates the opportunities for smallholder farmers to self-finance the use of high-yielding sunflower seeds, by considering their marketable noncommercial asset levels and their perceptions versus the reality of liquidity limitations. The study used a cross-sectional survey covering 416 randomly selected smallholder sunflower farmers in the study area of Tanzania. It makes use of the crafted choice experiment approach to assess the degree of liquidity constraints among smallholder farmers in buying high-yielding seeds, and their willingness to receive a low-interest credit or loan to purchase high-yielding seeds given before or after sowing. Results reveal that liquidity limitation is a perceived rather than a real problem, and it is feasible for farmers to self-finance the use of high-yielding seeds using their own marketable noncommercial liquid assets like livestock and chickens. The results further indicate however, that smallholder sunflower farmers are lacking adequate knowledge of the value of their liquid assets and of the opportunity cost or benefit of taking a credit/loan to finance the use of high-yielding seeds. The implications of these findings is that educating and sensitizing farmers about their potential resources, financial base, and the real cost of credit may influence their choice for self-financing and borrowing options as a way to improve their productivity.