Mechanization, Intensification, and Extensification of Agriculture: Evidence from Rice Farming in Tanzania

The use of agricultural machinery is increasingly common in sub-Saharan Africa. However, its potential benefits for smallholder farmers remain unclear. This study uses three-year panel data collected from rice farmers in Tanzania to examine the effects of four-wheeled tractors, small two-wheeled tractors, and draft animals on the expansion of the cultivated area (extensification), adoption of yield-enhancing technologies, land productivity (intensification), and labor productivity. We apply a multinomial endogenous treatment effect model with Mundlak-Chamberlain devices to account for the endogeneity problem. We find that large four-wheeled tractor use contributes to the extensification and increased labor productivity but has a negative effect on land productivity. On the other hand, small two-wheeled tractor use contributes to extensification, the adoption of yield-enhancing technologies, and an increase in paddy yield but has no impact on labor productivity. Our results suggest that large- and small-size tractors play different roles, but both can contribute to enhancing rice production in sub-Saharan Africa.