Title: Back from Israel: The impacts of employment in modern, commercial farms on smallholder agriculture.
Hundreds of millions of farmers in LMIC still use traditional farming methods to operate small plots with low profitability. The barriers to improved productivity and more commercial orientation of smallholder farming remains imperfectly understood. Evaluations of training programs that aim to improve farmer skills yield mixed results and mostly point to small effects, but it remains unknown if low impacts are observed because of poor implementation or because skill levels are not, in fact, the binding constraints.
We utilize a unique natural experiment in which Nepali smallholder farmers are selected by lottery to participate in a year-long agricultural training and employment in Israel. Upon their return to Nepal, program participants are more likely to live in their home villages, operate a commercial farm, and invest in their farms. Moreover, their expenditures on inputs and market access and their agricultural revenues are substantially higher. However, we find limited evidence for a dramatic shift to modern farming methods. These results are in line with self-reported learnings from the program, which highlight managerial, rather than agronomic impressions as particularly relevant takeaways from the program. They suggest that exposure to modern agriculture can facilitate more commercial approaches, but not necessarily a technological transformation of small-scale farming.