Association for Public Policy Analysis & Management

Major South Asian economies have gone through reforms in the late 1980s. Liberalization has been considered as a fundamental of economic reform policies. But at the same time, the globalization of agriculture is being exposed to several challenges. The potential of the South Asian countries to intensify the agricultural produce and export is evident as the agriculture is one of the labor-intensive sectors. South Asian agriculture is experiencing a downturn in technological capacity in staple crops, while cash crops are being encouraged by subsidies. Agriculture in Nepal is the most important sector for economic growth. It benefits the poor. So, intensifying the production would lead to an increment of agricultural incomes. It can be the key to fight poverty, as a considerable proportion of the population derives their livelihoods from agriculture. Most of the studies have tried to link agricultural extension services directly to the farmers' decision, and thus a potential gap in the literature can be identified. It is not certain that having access to extension services, access to agro-vets, access to agricultural market always lead to a change in perception about adopting hybrid seeds or diversifying crops. It can be argued that agronomical knowledge itself can be one of the determinants of farmers’ decision/adoption process. And agronomical literacy is gained through years of experience and regional extension services in agriculture help in shaping perceptions about innovation in agriculture. Hence, it is important to identify the causal relationship between agronomical knowledge (through extension services) and farmers’ agricultural decisions. The primary research questions can thus be formulated as: ‘Does agronomical knowledge affect positively towards the adoption of (1) hybrid seeds and (2) crop diversification?’ If yes, ‘Does access and distances to agricultural extension services play a significant role in building agronomical knowledge?’ The data which is used in this study were collected through a questionnaire administered by the Nepal Seed and Fertilizer (NSAF) project funded through the United States Agency for International Development (USAID). The study analyzed the state of crop diversification and adoption of hybrid seeds in Nepal. It is found that agronomical knowledge has significant and positive effects on both. It is generally seen in South-Asian countries that crop diversification sees a gradual transformation from staple crops to cash crops. Also, cash crops (e.g. coffee, cotton etc.) have an attractive market value compared to rice. Still, Nepal has shown that agronomical literacy can affect the farmers’ perception and adoption decision of staple hybrid and diversification.