The impact of digital technology adoption on farm profitability for smallholder sunflower farmers: empirical evidence from Singida, Tanzania

This study examined the impact of digital technology adoption on farm profitability among smallholder sunflower farmers in Iramba District, Singida Region, Tanzania. Using cross-sectional data from 174 farmers collected through structured questionnaires, the study employed an Endogenous Switching Regression (ESR) model and complementary OLS, conventional 2SLS, and heteroskedasticity-generated instrumental-variable robustness checks. The ESR estimates indicate a positive Average Treatment Effect on the Treated, suggesting higher predicted profitability among current adopters, while the negative Average Treatment Effect on the Untreated indicates that current non-adopters may not obtain similar gains under adoption. However, although the OLS adoption coefficient is positive and statistically significant, the conventional 2SLS and Lewbel-IV adoption coefficients are substantially smaller and statistically insignificant. These results indicate that the estimated profitability effect is sensitive to identification assumptions. Digital skills and education emerge as more consistent determinants of profitability. The study concludes that digital technologies can support farm profitability, but benefits depend on farmer readiness and complementary capabilities rather than adoption alone.