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Joint estimation of farmers' stated willingness to pay for agricultural services:

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  • Ulimwengu, John
  • Sanyal, Prabuddha

Abstract

In many developing countries, to sustain the provision of agricultural services to farmers, many have advocated the use of service fees. Successful implementation of such schemes requires understanding of determinants of farmers' willingness to pay. In this paper we use a multivariate probit approach to investigate farmers' stated willingness to pay for different agricultural services including soil fertility management, crop protection, farm management, improved produce quality /varieties, on-farm storage (post-harvest), improved individual and group marketing, and disease control. Data are from the Uganda National Household Survey 2005/2006. Controlling for individual characteristics and regional heterogeneity, our results suggest that farmers with access to information on proposed agricultural service are less willing to pay for it. Similarly, access to extension service tends to reduce farmers' willingness to pay. Market access plays also a significant role; farmers with available market are more willing to pay for agricultural services than those without available market. On the reverse, distance to the market is inversely correlated with the willingness to pay for agricultural services. The results also suggest that land ownership matters; indeed, increase in the size of land owned by farmers increases their willingness to pay for agricultural services. As expected, farmers' income, especially agricultural income significantly increases farmers' willingness to pay for agricultural services. Overall, decisions to pay or not for these services are not independent from each other implying that joint supply of these services should be recommended.

Suggested Citation

  • Ulimwengu, John & Sanyal, Prabuddha, 2011. "Joint estimation of farmers' stated willingness to pay for agricultural services:," IFPRI discussion papers 1070, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1070
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    Cited by:

    1. Taneja, Garima & Pal, Barun Deb & Joshi, Pramod Kumar & Aggarwal, Pramod & Tyagi, N.K., 2014. "Farmers’ preferences for climate-smart agriculture an assessment in the Indo-Gangetic plain:," IFPRI discussion papers 1337, International Food Policy Research Institute (IFPRI).
    2. Muatha, Irene Teresia & Otieno, David Jakinda & Nyikal, Rose Adhiambo, 2016. "Factors influencing smallholder farmers’ awareness of agricultural extension devolution in Kenya: a binary logit analysis," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246283, African Association of Agricultural Economists (AAAE).
    3. Garima Taneja & Barun Deb Pal & Pramod K. Joshi & Pramod K. Aggarwal & N. K. Tyagi, 2014. "Farmers’ Preferences for Climate-Smart Agriculture: An Assessment in the Indo-Gangetic Plain," Working Papers id:5806, eSocialSciences.
    4. Angella, Namyenya, 2014. "Farmers' Willingness to Pay for Irrigation Water: The Case of Doho Rice Irrigation Scheme in Eastern Uganda," Research Theses 243462, Collaborative Masters Program in Agricultural and Applied Economics.
    5. repec:fpr:export:1337 is not listed on IDEAS
    6. Ragasa, Catherine & Berhane, Guush & Tadesse, Fanaye & Taffesse, Alemayehu Seyoum, 2012. "Gender differences in access to extension services and agricultural productivity:," ESSP working papers 49, International Food Policy Research Institute (IFPRI).
    7. Kangondo, Angelique, 2015. "Economics of Manure Disposal and Utilization in Morogoro Municipality, Tanzania," Research Theses 243440, Collaborative Masters Program in Agricultural and Applied Economics.

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    Keywords

    agricultural services; Farmers; multivariate probit; willingness to pay; Markets;

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