**3.3 External incentives or disincentives**

### *3.3.1 Prices of inputs*

In the process of diffusion and adoption, the prices of inputs have an effect on the decisions of farmers. Dinar and Yaron suggest that past and future price expectations for inputs and outputs have importance in investment decisions for new equipment, which is mentioned in their study as irrigation equipment [70]. Moreover, the rise in these prices affects the use of modern technologies positively. In contrast to this study, the findings of Dinar et al. indicate the possibility

**147**

*Socio-Economic Dimensions of Adoption of Conservation Practices: What Is Needed to Be Done?*

that although the price of cotton increases and thus the area allocated for cotton increases, the amount of farms equipped with modern technologies decreases in their study [10]. With these two opposite results, the study of Abdulai and Huffman concludes that the effect of price on the adoption and diffusion depends on the phases [19]. While the expected price of the new technology affects the diffusion process positively and significantly in the early adoption phase, it is shown that the price of new technology in the second phase does not have a significant effect on the adoption. The positive effect of the expected price can be shown by the result of its

Risk is one of the most commonly addressed issues about technology adoption in agriculture, in the literature. The study by Koundouri et al. indicates that risk has an important effect on the adoption decision process for a new technology [7]. They assert that farmers tend to invest in and adopt new technology more to avoid the production risk they encounter with the risk of extreme outcomes. In their study, it is shown that farmers who face adverse climatic conditions adopt new technologies to decrease the risk level. Uncertainty about the profitability, which is a risk factor, also increases the probability of farmers' adoption because the adoption of new technology decreases the production risk, risk premium and relative risk premium [7, 11]. If the producer is decisive in adopting, the adoption degree is also affected by the risk factors [50]. For instance, the larger farmers allocate relatively less land and hence smaller proportion of their incomes to risky activities, which means the higher input of fertilizer per acre [29]. In this sense, Hiebert suggests that while risk-preferring farmers tend to use more land and fertilizer for production than the risk-neutral farmers, risk-neutral farmers tend to use more inputs than riskaverting farmers [45]. Correspondingly, Wossen et al. assert that, in the adoption decision process, risk-averse households trust their social capitals in terms of adoption decision more than risk-loving households [61]. Networks and traditional sharing norms such as the social capital affect the risk-mitigating measures negatively [71]. On the other hand, Wossen et al. suggest that the relationship between social capital and risk aversion changes among households [61]. While some results show a significant and negative effect on risk aversion, some show a positive effect

No doubt that having a financial potential is necessary while experiencing an innovation. Financial assets also have an influence on adoption, and hence credit constraint leads to different adoption rates [17]. In the literature, there are many studies that show the importance of credit accessibility in the adoption. Access to credit facilitates investment because it provides the support for liquidity requirements [61]. Through this support, farmers may buy the inputs such as fertilizer and benefit from the facilities more easily; it also influences the change in planting dates and using irrigation systems positively [26]. By depending on its contributions to the agriculture, most studies indicate that credit availability encourage people to adopt, and increase the adoption by accelerating [19, 27, 59]. However, on the other hand, Husen et al. state that the effect of credit availability on adoption depends on the technology because they show that while credit access has a positive effect on the adoption of one of the technologies, it has a negative effect on the adoption of other technology in their study [60]. This negativity has been explained in that credit access may direct people to non-agricultural sectors for the investment. From

diminishing time and accelerating adoption effect, in their study.

*DOI: http://dx.doi.org/10.5772/intechopen.93198*

*3.3.2 Risk*

in their study.

*3.3.3 Credit accessibility*

#### *Socio-Economic Dimensions of Adoption of Conservation Practices: What Is Needed to Be Done? DOI: http://dx.doi.org/10.5772/intechopen.93198*

that although the price of cotton increases and thus the area allocated for cotton increases, the amount of farms equipped with modern technologies decreases in their study [10]. With these two opposite results, the study of Abdulai and Huffman concludes that the effect of price on the adoption and diffusion depends on the phases [19]. While the expected price of the new technology affects the diffusion process positively and significantly in the early adoption phase, it is shown that the price of new technology in the second phase does not have a significant effect on the adoption. The positive effect of the expected price can be shown by the result of its diminishing time and accelerating adoption effect, in their study.

### *3.3.2 Risk*

*Organic Agriculture*

and extend the time. The study of Khanna, which is one of the studies on this issue, handles the farm location as a main factor influencing adoption of soil testing [6]. It is shown that the more proximity of farmers to professional services increases, the more likelihood of soil testing adoption increases because most farmers trust the services provided by professional dealers. By confirming this relationship between farm location and adoption, the study of Kassie et al. indicates that the location has an effect on the investment decisions of farmers and hence being far from a village or a household that has more opportunities in terms of input and output decreases the likelihood of adoption of sustainable agricultural projects [36]. Case and Husen et al., who handle the subject in terms of accessibility to agricultural extensions, also emphasize that while proximity to agricultural centre affects adoption positively, parcel distance and being distant from their farm affect their adoption and farm management negatively [22, 60]. Due to these positive effects on adoption, it is shown that proximity to main market center provides better access to organic market outlets and hence their adoption becomes easier [25]. Eventually, when information is considered as positively related with the adoption, it is clearly seen that the accessibility to information, which means the closeness of farm location to

Many research studies conducted on technology adoption in agriculture prove that soil characteristics have a certain effect on the yield [37]. The study by Rahm and Huffman indicates that reduced tillage practices, which are used to measure adoption, influence the yield positively on the soils having poor characteristics [37]. Even, they expect to be dependent of per acre profitability on soil characteristics [10] because technologies decrease problems, which can stem from climatic conditions and natural events, by providing necessary conditions as required by the soil [37]. Larger and unfavorable fields for agriculture have more tendency to be equipped with modern technologies [10]. The probability of adoption changes depending on the soil characteristics and hence adoption shows the differences among farms [37]. Rahm and Huffman and Isham indicate that the probability of adoption under better soil conditions is higher [37, 59]. The benefits of reducing unfavorable conditions and improving soil characteristics provided by adoption affect the crop production value, input expenditures, productivity and sustainability significantly [36]. However, in this sense, the type of technology also causes differences in adoption. For instance, the study of Husen et al., examining the adoption of soil and water conservation practices (SWCs) and productivity-enhancing technologies (PETs), indicates that although land slope affects the adoption of SWC positively, it has a negative effect on the adoption of PET [60]. The adoption differences in terms of soil fertility, parcel distance and agricultural extension had

In the process of diffusion and adoption, the prices of inputs have an effect on the decisions of farmers. Dinar and Yaron suggest that past and future price expectations for inputs and outputs have importance in investment decisions for new equipment, which is mentioned in their study as irrigation equipment [70]. Moreover, the rise in these prices affects the use of modern technologies positively. In contrast to this study, the findings of Dinar et al. indicate the possibility

the information sources, increases the likelihood of adoption.

*3.2.3 Characteristics of soil and land*

also been observed in this study.

*3.3.1 Prices of inputs*

**3.3 External incentives or disincentives**

**146**

Risk is one of the most commonly addressed issues about technology adoption in agriculture, in the literature. The study by Koundouri et al. indicates that risk has an important effect on the adoption decision process for a new technology [7]. They assert that farmers tend to invest in and adopt new technology more to avoid the production risk they encounter with the risk of extreme outcomes. In their study, it is shown that farmers who face adverse climatic conditions adopt new technologies to decrease the risk level. Uncertainty about the profitability, which is a risk factor, also increases the probability of farmers' adoption because the adoption of new technology decreases the production risk, risk premium and relative risk premium [7, 11]. If the producer is decisive in adopting, the adoption degree is also affected by the risk factors [50]. For instance, the larger farmers allocate relatively less land and hence smaller proportion of their incomes to risky activities, which means the higher input of fertilizer per acre [29]. In this sense, Hiebert suggests that while risk-preferring farmers tend to use more land and fertilizer for production than the risk-neutral farmers, risk-neutral farmers tend to use more inputs than riskaverting farmers [45]. Correspondingly, Wossen et al. assert that, in the adoption decision process, risk-averse households trust their social capitals in terms of adoption decision more than risk-loving households [61]. Networks and traditional sharing norms such as the social capital affect the risk-mitigating measures negatively [71]. On the other hand, Wossen et al. suggest that the relationship between social capital and risk aversion changes among households [61]. While some results show a significant and negative effect on risk aversion, some show a positive effect in their study.
