Education, Risk-attitude and Agricultural Innovation: Farm Level Investigation in North India

Abstract

This paper explores the role of farmers’ education in promoting farming innovation, that is, contract farming (CF). Applying the Tobit model on cross-sectional data of 754 wheat growers in Haryana, it has been found that education directly and indirectly (by reducing risk aversion) stimulates the participation intensity of farmers in CF. It directly enhances farmers’ capacity to absorb and comprehend CF complexities and indirectly reduces farmers’ risk-aversion attitude. It fosters a positive attitude and willingness to adopt modern technologies. Hence, both the education and risk-taking attitudes of farmers are found to be significant for CF adoption probability and intensity. Other factors like farm size, non-farm income, asset ownership and access to credit, media and contact with extension services are all positive stimuli of CF participation intensity. The study suggests promoting field school and awareness programmes to help farmers both acquire and disseminate information on modern farm practices and technologies. JEL Codes: C01, I25, Q16