This study examines the role of information acquisition and risk-bearing behaviour in the
adoption of crossbreeding technology in Tanzania. It also identifies the appropriate means by
which technologies related to milk production (feeding processes, maintenance of animal
health and housing conditions) can be developed and transferred to farmers engaged in smallscale
dairy farming.
The empirical investigation involves a sample of 406 dairy farmers in two rural areas of
Tanzania, namely Iringa and Mbeya. The data covers 237 farmers who have adopted
crossbred cows and 169 farmers who have not. A maximum likelihood bivariate probit model
is used to compute simultaneously the two equations explaining the probability of the farmer
acquiring information and adopting crossbred cows, as well as to analyse the technologies
related to milk production (interrelated technologies). The intensity of adoption equation is
investigated using a Heckman two-stage procedure to account for selectivity bias.
The analytical results indicate that attitudes towards risk do not appear to influence the
adoption decision, but do affect information acquisition and the intensity of adoption.
Compared to a risk-neutral producer, a risk-averse producer will tend to make less use of the
new technology and will seek more information about it.
The main empirical findings show that the decisions to acquire information and to adopt a
crossbred cow must be estimated simultaneously and that related technologies have to be
considered when adopting crossbreeding. The results also indicate that better educated
farmers and those who earn a larger percentage of their income from non-farm activities
exhibit a higher probability to acquire information.
Furthermore, the results reveal that credit availability is an essential factor that can constrain
the adoption of new technologies (it has the most important marginal effect1 on the probability
not to adopt crossbred cow). Another important finding is the observation that a household
head with a better education and non-farm income exhibits a higher probability to adopt
crossbreeding technology.