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Smallholder farmers' willingness to pay for scale-appropriate farm mechanization: Evidence from the mid-hills of Nepal

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  • Paudel, Gokul P.
  • KC, Dilli Bahadur
  • Rahut, Dil Bahadur
  • Khanal, Narayan P.
  • Justice, Scott E.
  • McDonald, Andrew J.

Abstract

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.

Suggested Citation

  • Paudel, Gokul P. & KC, Dilli Bahadur & Rahut, Dil Bahadur & Khanal, Narayan P. & Justice, Scott E. & McDonald, Andrew J., 2019. "Smallholder farmers' willingness to pay for scale-appropriate farm mechanization: Evidence from the mid-hills of Nepal," Technology in Society, Elsevier, vol. 59(C).
  • Handle: RePEc:eee:teinso:v:59:y:2019:i:c:s0160791x19301460
    DOI: 10.1016/j.techsoc.2019.101196
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    More about this item

    Keywords

    Farm mechanization; Mini-tillers; Willingness to pay; Contingent valuation; Heterogeneous demand; Nepal;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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