<![CDATA[Background: The adoption of digital technology is crucial for increasing efficiency and productivity in the agricultural sector. However, this development faces a digital paradox that must be addressed. However, adoption among farmers remains relatively slow and is associated with high resistance. This process of farmer adoption is influenced by the characteristics of innovation diffusion, particularly the ability to experiment and observe prior to full adoption.Purpose: This study examined the effects of innovation diffusion characteristics on digital literacy and digital technology adoption. It also investigates the mediating role of digital literacy in the relationship between innovation diffusion and adoption decisions among shallot farmers in Bantul Regency.Design/methodology/approach: A quantitative cross-sectional study was conducted with 100 shallot farmers in Bantul Regency. Respondents were selected using a multistage sampling method that combined purposive sampling for the study area and farmer groups with random sampling for the respondents. Data were analyzed using a structural equation model (SEM) in SmartPLS 4.Findings/Results: Relative advantage, compatibility, trialability, and observability significantly influenced digital literacy, whereas complexity did not. Digital literacy drives adoption. Among the direct and mediated effects (through digital literacy) on adoption, only trialability and observability were significant, whereas relative advantage, compatibility, and complexity were not significant.Conclusion: The digital technologies adopted by the shallot farmers in Bantul Regency depend on their ability to directly trial and observe the success of these innovations. Digital literacy drives adoption, but its effectiveness is influenced by the provision of concrete technology demonstration spaces for farmers.Originality/value (State of the art): Previous research has generally analyzed innovation diffusion characteristics and digital literacy separately as predictors of adoption. However, this study positions digital literacy as a mediating variable that bridges farmer preferences and the final adoption decision, which remains limited. Keywords: agricultural digitalization, diffusion of innovation, digital literacy, rural community, technology adoption]]>
