Can Financial Innovation to Mitigate Risk Lead to Greater Investment and Higher Welfare? A Field Experimental Approach

The Green Revolution introduced high-yield crop varieties, chemical fertilizer and other modern cultivation practices that led to a tremendous increase in global agricultural productivity. Yet, the impact of these new technologies on farming practices and output has been uneven. In many areas, traditional farming practices still predominate, and take-up of new agricultural technologies and practices remains limited, despite their high expected rates of return(see Duflo, Kremer and Robinson, 2008 and Suri, 2009). Credit constraints and limited access to information are often proposed as explanations for low investment and technology adoption in the developing world (Feder, Justand Zilberman, 1985).