The productivity and income effects of adopting improved rice varieties by smallholder farmers in Indonesia

Purpose This study identified the determinants of improved rice variety adoption and measured their impact on farm productivity and the income of smallholder farmers in Indonesia. Design/methodology/approach We used a multistage sampling procedure and data from household surveys in four districts in the Banten region of Indonesia. An endogenous switching regression (ESR) model was used to estimate the impact of adoption, and the propensity score matching (PSM) non-parametric method tested the strength of the ESR findings. Findings The farm productivity of adoption increased by 11.45% and the income of smallholder farmers increased by 12.10% when compared to that of traditional methods. Research limitations/implications The positive and significant effects of improved rice variety adoption indicated that research programs that develop improved rice varieties can optimize the productivity and income of smallholder farmers. Originality/value Adopting improved rice varieties increases the productivity and income of smallholder farmers, and the level of education, rice farming experience, access to extension workers, off-farm work, and mobile phone ownership have positive and significant effects on the adoption of improved rice varieties.