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2. Challenges of Seasonal Labor

2.1. Read the text.

Besides the fact that rural labor markets often place costs on agricultural households, they are also typically seasonal, with all households requiring labor inputs at the same time. This results in fluctuations in wages and employment opportunities. Because the periods of high demand and wages often coincide with the planting season when food resources are scarce, farmers without access to credit markets may have to sell household labor to meet immediate consumption needs. Consequently, labor may not be available to invest in new technologies at planting time, because labor and capital is tied up in meeting basic consumption needs.

2.2. Answer the questions:

1. Why may households prefer to use family labor on the farm than to hire labor?

2. Do hired laborers have more incentive to work hard than do family laborers? Explain.

3. Does it mean that the household may have to invest in supervising hired laborers?

4. What can it result in?

5. Why the rural labor markets are also typically seasonal,

6. Why do the households require labor inputs at the same time and what

results in?

7. Why may labor not be available to invest in new technologies at planting time?

3. Education as a Constraint to adoption

3.1. Read the text.

Certain types of farmers may be affected differently by problems in the labor market. Education levels are highly correlated with technology adoption rates in agriculture. However, farmers and laborers may be unable to attain benefits from productivity improvements if they are unable to access more schooling. Further compounding this problem; seasonally fluctuating labor demands can undermine incentives to invest in education if demand for labor is highest during times when school is in session.

4. Household Labor Distribution

4.1. Read the text.

New technologies also affect the distribution of labor within the household. If female labor has a lower value on the labor market, households may adopt technologies that place a greater burden of time on women than on men. The problems associated with poorly functioning labor markets therefore have important implications for non-agriculture issues, such as education and gender equality, which can influence farmers’ decisions about technology adoption.

5. Implications of Constraints and How to Address them

5.1. Read the text.

Several of these factors are clearly related to poorly functioning markets in rural areas, such as “missing markets” for risk, credit, or land (i.e. a lack of formal insurance providers, financial institutions, or the ability to buy, sell, own, or reliably hold onto one’s land). Efforts that address these constraints can focus on increasing the individual’s capacity to adopt. For example, alternatives to standard forms of collateral (e.g. future profits instead of current property) may improve access to credit for the very poor without necessarily addressing the functioning of the credit market overall. In other cases, even profitable and accessible technologies go unadopted for behavioral reasons, such as self-control problems or aversion to losses. Behavioral economics offers an intriguing set of theories on how to help people overcome these heuristics and biases, and applying these ideas to the promotion of agricultural technologies may help increase adoption.