Small and Mid-Sized Farmer Irrigation Adoption in the Context of Public Provision of Hydric Infrastructure in Latin America and Caribbean

According to 2013 statistics from the Economic Commission for Latin America and the Caribbean (EC-LAC 2013), a mere 3.03% of the total agricultural area in aEuroiaEuroithe region uses some type of irrigation technology. Thus, there is a high degree of sub-utilization of existing hydric infrastructure given that the supply of irrigation capacity in many countries is greater than the calculated use (see Herrera et al. 2005; IICA 2011; CONAGUA 2014, among others). Nonetheless, there are a limited number of studies that characterize the factors affecting the adoption of irrigation by small and mid-sized farmers in the influence area of irrigation projects. This manuscript presents a novel empirical decision model applicable to irrigation adoption based on exogenous and endogenous factors in the context of LAC countries, which is solved through a binary equation system with latent variables. The main goals are to capture the effect that certain idiosyncratic variables, such as lack of credit access, can have over the decision of irrigation adoption; as well as the costs associated to private goods, financed through credit, which are necessary to access to the benefits of the provision of irrigation as a public good.