Introducing inventory credit into Nigerien agriculture: improving technology diffusion

A critical component of agriculture in developing countries is increasing soil fertility in response to depleted soils and declining crop yields. An inventory credit program was introduced in western Niger to generate savings for farmers’ groups to facilitate the purchase of inorganic fertilizers. This program is compared with a more traditional inventory credit program, which provides credit at harvest but lets farmers sell their grain in the post-harvest period after grain prices have recovered. The evaluation of the two programs for their impacts on farmers’ incomes and farm-level technology adoption is undertaken with a linear programming model. The decision-making framework of this model comes from interviews of farmers in a number of African countries. Farmers are found to be risk averse, but exhibit a different type of decision making than the usual expected income-income variability tradeoff.