Technology Adoption, Productivity and Specialization Dynamic of Uruguayan Breeders: Evidence from an Impact Evaluation

In this paper, we analyzed the effectiveness of the Livestock Pilot Project (LPP) in fostering the efficiency of the Uruguayan livestock producers. We found that the Component 1 of the LPP (LPP-1) had an overall positive impact on the adoption of managerial practices, but it had not significant impact on both productivity and specialization. However, we found positive effects of the LPP-1 also on productivity when we restricted the analysis to the producers specialized in the breeding stage. In particular, we found that the Reproductive Efficiency Index (REI) of the beneficiary breeders is 6.7 percentage points higher than the REI of the non-beneficiaries. In economic terms, this result means an average income increase of US$5,960 for the beneficiaries. These results notwithstanding, we found that the project is only partially successful in fostering the breeders ’ rate of specialization, probably due to a still too high risk aversion towards complete specialization. Finally, we found that the LPP-1 had no differentiated effects depending on the size of subsidy received by the producers. Therefore we could not identify any threshold in the subsidy intensity that significantly affects the project effectiveness. We estimated these effects through a quasi-experimental approach that combines difference-in-difference and propensity score matching techniques, in order to control for potential selection bias in the absence of a randomized experiment. We used a unique panel dataset of 520 beneficiary and 470 non-beneficiary producers, dataset that we constructed by mergin