Agricultural Transformation and Farmers' Expectations: Experimental Evidence from Uganda

Why adoption rate of potentially profitable agricultural technologies in Africa remains low is still puzzling. This paper uses a randomized control trial to study Ugandan subsistence smallholders' decisions to adopt cash crops. A unique way of eliciting farmers price and yield expectations allows us to investigate the role of farmers' ex-ante beliefs about crop profitability on adoption decisions. We find that the provision of extension services increases oilseeds adoption by 15%, and farmers who under-estimate oilseeds price at baseline are the most likely to adopt the new crops. The results suggest that changes in expectations drive agricultural technology take-up.