• Labor shortage due to out-migration adversely affected smallholder farmers in Nepal. • Adoption of scale-appropriate mechanization increased rice productivity by 1110 kg/ha. • Adoption of mechanization by non-adopters would increase rice productivity by 1250 kg/ha. • Very small rice cultivating farms (≤0.25 ha) benefited most from adoption of mechanization. • Rising on-farm rural wage due to labor shortage was the primary driver of mini-tiller adoption.

This paper analyzes smallholder farmers' willingness to pay (WTP) for the purchase of scale-appropriate farm mechanization in the hill ecologies of Nepal using the case of mini-tiller technology: a small, 5–7 horsepower two-wheel tractor primarily used for agricultural land preparation. Using primary survey data from 628 randomly-selected households, we find that farm size, local wage rates, out-migration, access to credit services, and associations with agricultural cooperatives positively influence the WTP for mini-tillers while the number of draft animals owned negatively influence the WTP for mini-tillers. On average, farmers were willing to pay 31% less than the actual price of a mini-tiller. Results also exhibited a heterogeneous demand in which the lowest quartile farm size households, typically the poorest farm households, were willing to pay 26% less for the mini-tiller than the top quartile of farms. In the context of labor scarcity and rising rural wages, agricultural policy on farm mechanization in Nepal should aim to prioritize small farms through robust service provision models in order to increase the level of farm mechanization in the country.

Farm mechanization among smallholder farming systems in developing countries is emerging as a viable option to off-set the effects of labor out-migration and shortages that undermine agricultural productivity. However, there is limited empirical literature on gender and farm mechanization. This study assesses the impacts of the gender of household heads on mini-tiller adoption in the hills of Nepal, using an exogenous switching treatment regression model. Our findings reveal that there is a significant gender gap in mini-tiller adoption between male-headed households (MH-HHs) and female-headed households (FH-HHs). Compared to MH-HHs, the mini-tiller adoption rate is significantly lower among the FH-HHs, and a large amount of unobserved heterogeneity is deriving this difference. Moreover, when MH-HHs and FH-HHs have similar observed attributes, the mini-tiller adoption rate among the food insecure FH-HHs is higher than in the food secure group. The gender-differentiated mini-tiller adoption rate can be minimized primarily by enhancing market access. Findings suggest that farm mechanization policies and programs targeted to the FH-HHs can reduce the gender-differentiated adoption gap in Nepal and similar hill production agro-ecologies in South Asia, which will enhance the farm yield and profitability.

Purpose: This study examines the adoption drivers of scale-appropriate mechanization in Nepal's maize-based farming systems. The authors also assess the contribution of scale-appropriate mechanization to the United Nations Sustainable Development Goals (SDGs) of zero hunger (SDG2) and no poverty (SDG1).Design/methodology/approach: Propensity score matching and doubly robust inverse probability-weighted regression adjusted methods were applied to estimate the effects of mini-tiller adoption. These methods control the biases that arise from observed heterogeneities between mini-tillers users and nonusers.Findings: The study findings show that farm size, labor shortages, draft animal scarcity, market proximity, household assets and household heads' educational level influence the adoption of mechanization in Nepal. Mechanized farms exhibited enhanced maize productivity, profits and household food self-sufficiency. Reduced depth and severity of poverty were also observed. Nevertheless, these effects were not uniform; very small farms (≤0.41 ha) facing acute labor shortages benefited the most.Research limitations/implications: The study results suggest that policymakers in developing nations like Nepal may wish to expand their emphasis on scale-appropriate mechanization to improve farm productivity and household food security, reduce poverty and contribute to the SDGs.Originality/value: This first-of-its-kind study establishes the causal effects between scale-appropriate farm mechanization and SDG1 (no poverty) and SDG2 (zero hunger) in a developing nation.