Adoption and heterogeneous impacts of hired mechanization services among smallholder farmers in Kenya, Zambia, and Zimbabwe

Abstract

How, where and what to mechanize in African smallholder agriculture are pertinent development questions. We examine the adoption and impacts of smallholder mechanization hire services using survey data from 642 farmers across Kenya, Zambia, and Zimbabwe. For identification, we employ a control-function instrumental variable approach to address the endogeneity of mechanization hiring decisions. The primary drivers of the decision to adopt mechanization include distance to service providers, labor demand, area cultivated, and social capital. Our instrumental variable estimates show that hiring mechanization services was associated with increased household income and maize yields across the three countries. The heterogeneous effects using a control-function quantile regression show that the benefits are highest in the lower quantiles. Hiring mechanization services significantly increased income at the 25th, 50th, and 75th percentiles, with the largest effects concentrated at the lower end of the income distribution, among poorer households. These findings contrast with concerns that agricultural technologies primarily benefit wealthier farmers. These results demonstrate that smallholder mechanization hire services can serve as an effective pathway out of poverty for smallholder farmers. Our findings suggest that expanding service provider networks and reducing economic and geographical barriers can generate substantial welfare gains. This is especially true for vulnerable farmers who can benefit from better connections between service providers and clients. More broadly, mechanization service provision offers a scalable model for increasing agricultural productivity while promoting inclusive growth in smallholder agriculture.