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Farmers’ willingness to pay for improved agricultural technologies: Evidence from a field experiment in Tanzania

Farmers’ willingness to pay for improved agricultural technologies: Evidence from a field experiment in Tanzania

Shee, Apurba ORCID: 0000-0002-1836-9637, Azzarri, Carlo and Haile, Beliyou (2019) Farmers’ willingness to pay for improved agricultural technologies: Evidence from a field experiment in Tanzania. Sustainability, 12 (1):216. ISSN 2071-1050 (Online) (doi:https://doi.org/10.3390/su12010216)

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Abstract

Initiatives on the sustainable intensification of agriculture have introduced improved technologies tailored to farmers’ local conditions by trial demonstration with free provision of improved seeds and fertilizers. It is not clear, though, whether smallholder farmers would be willing to pay for these technologies, and what factors determine their informed demand. Using a contingent valuation experiment, combined with information at baseline from 400 households in Northern Tanzania, this study measured farmers’ willingness to pay (WTP) for hybrid maize seed and local inorganic fertilizer. Farmers’ WTP was estimated using a dichotomous contingent valuation model with follow-up. Results showed that the average WTP was 61% higher for hybrid maize seed and 15% lower for inorganic fertilizer than their average local market prices during the reference period, suggesting that farmers were willing to pay a premium for hybrid maize seed, while they did not seem to be interested in fertilizer purchase at current market price. Moreover, since improved access to extension services was found to influence farmers’ WTP positively, strengthening extension services could be a suitable policy intervention to increase farmers’ demand for improved technologies. On the other hand, farmers’ risk aversion negatively affected WTP for both technologies. This result suggests that encouraging risk reduction options, such as agricultural insurance, could be one policy recommendation for boosting farmers’ demand for improved agricultural technologies.

Item Type: Article
Additional Information: © 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
Uncontrolled Keywords: sustainable intensification; willingness to pay; double-bounded contingent valuation; risk aversion; Tanzania
Subjects: S Agriculture > S Agriculture (General)
Faculty / Department / Research Group: Faculty of Engineering & Science
Faculty of Engineering & Science > Natural Resources Institute
Faculty of Engineering & Science > Natural Resources Institute > Food & Markets Department
Last Modified: 03 Jan 2020 09:22
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/26422

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