The Effect of Extension Services and Credit on Agricultural Production in Bolivia, Peru, and Colombia

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Jul 2021
In this paper we estimate the average treatment effect from access to extension services and credit on agricultural production in selected Andean countries (Bolivia, Peru, and Colombia). More specifically, we want to identify the effect of accessibility, here represented as travel time to the nearest area with 1,500 or more inhabitants per square kilometer or at least 50,000 inhabitants, on the likelihood of accessing extension and credit. To estimate the treatment effect and identify the effect of accessibility on these variables, we use data from the Colombian and Bolivian Agricultural Censuses of 2013 and 2014, respectively; a national agricultural survey from 2017 for Peru; and geographic information on travel time. We find that the average treatment effect for extension is higher compared to that of credit for farms in Bolivia and Peru, and lower for Colombia. The average treatment effects of extension and credit for Peruvian farms are $2,387.45 and $3,583.42 respectively. The average treatment effect for extension and credit are $941.92 and $668.69, respectively, while in Colombia are $1,365.98 and $1,192.51, respectively. We also find that accessibility and the likelihood of accessing these services are nonlinearly related. Results indicate that higher likelihood is associated with lower travel time, especially in the analysis of credit.