What drives smallholder farmers' willingness to pay for a new farm technology? Evidence from an experimental auction in Kenya

Assessing the impact of farmers' willingness to pay on different cultivated land attribute levels in China: an empirical analysis using the choice experiment method

Exploring farmers' willingness to pay (WTP) for cultivated land protection and its influencing factors is key to promoting their enthusiasm for participating in cultivated land pollution governance. However, existing studies often overlook the differences in farmers' preference for different levels of cultivated land attributes and the issue of intertemporal choice in farmers' WTP, thus lowering the effectiveness of cultivated land protection policies. Using survey data from 646 small farmers in Shandong, Jiangsu, and Zhejiang provinces of China, this study empirically analyzes the impact of time preference on farmers' WTP for cultivated land attribute levels by utilizing the choice experiment method, measures the relative importance of different cultivated land attributes and attribute levels to farmers, and calculates farmers' WTP for different cultivated land attribute levels. The results revealed that farmers are generally reluctant to pay for cultivated land protection. Time preference affects farmers' WTP for different levels of cultivated land attributes, with future-biased preference increasing farmers' WTP and present-biased preference inhibiting it. Furthermore, for farmers, the relative importance of cultivated land attributes is in the order of cultivated land quality, cultivated land surrounding landscape and ecological environment, cultivated land social security function, and cultivated land area. The most crucial cultivated land attribute level is the improved cultivated land quality, with an average WTP of 3290.625 CNY per hectare (approximately 459.117 USD). In contrast, the least important cultivated land attribute level is the unchanged cultivated land area, with an average WTP of 1001.250 CNY per hectare (approximately 139.697 USD). The economic benefits of cultivated land protection in the sampled provinces can reach 353.892 million CNY per year (approximately 49.376 million USD) annually, which is calculated based on vegetable planting area. Our results suggest that the government should diversify farmers' sources of income while increasing the amount of income, thereby reducing barriers to farmers' payment. Simultaneously, farmers' time preferences should be considered to guide them toward expecting long-term benefits and encouraging their active participation in cultivated land pollution governance. Moreover, cultivated land protection policies should match the preference of farmers for cultivated land attributes and attribute levels, and a limited fiscal fund should be allocated to the cultivated land attributes (i.e., cultivated land quality) and attribute levels (i.e., improved cultivated land quality) preferred by farmers to improve policy efficiency. This study highlights the importance of encouraging farmers to actively participate in cultivated land pollution governance and improving the allocation efficiency of the government's cultivated land protection fund.

Risk Perception, Risk Preference, and Timing of Food Sales: New Insights into Farmers' Negativity in China

Chinese farmers, especially small ones, always sell their food at low prices during harvest season rather than storing it for a better price. Based on a theoretical framework of expected utility, this paper examines the mechanism by which risk perception affects farmers' timing choices of food sales and the role played by risk preference, utilizing data from the 2019 China Family Database and the China Household Finance Survey of farmers in six provinces of the main wheat-producing regions. This study shows that farmers with a high risk perception are more likely to choose current sales compared with intertemporal sales. The channel and mechanism analysis finds that increased risk perception leads to risky returns from intertemporal sales lower than certain returns from current sales in utility comparisons. It is further found that risk preference has a substitution effect on risk perception in farmers' intertemporal food sales.

Estimating seed demand in the presence of market frictions: Evidence from an auction experiment in Nigeria

This paper measures the effect of seed quality misperceptions on bidding behavior and demand for high-quality seed using an information-provision experiment within an incentive-compatible Vickery Second Price (SPA) auction mechanism that mimics seed purchasing decisions in the presence of seed market frictions. We find that most individuals are prone to quality misperception and revise their bids upwards (downwards) in response to positive (negative) quality signals. In addition, by exploiting random variation in the timing of cash grants, we show that imperfect information influences farmer seed valuation, even in the presence of potentially binding liquidity constraints. We also demonstrate that the provision of quality information does not fully resolve quality misperceptions. We then show that unresolved or persistent misperception is severe enough to distort bidding behavior, and ignoring it could lead to biased willingness-to-pay estimates. Our findings have important implications both for improving inference related to the identification and estimation of willingness to pay for quality seed in the presence of market frictions, and for the design of seed sector polices in developing countries.

Willingness to pay for adopting conservation tillage technologies in wheat cultivation: policy options for small-scale farmers

Traditional farming involves intensive tillage causing soil degradation and erosion. On the contrary, conservation tillage technologies are expensive to purchase for small-scale farmers. However, the adoption of these technologies reduces soil tillage costs which lead to reduced overall production costs. In this milieu, this study assessed the willingness to pay (WTP) for adopting conservation tillage technologies in terms of individual and cooperative payment systems using the primary data collected from 320 wheat farmers in Bangladesh. The contingency valuation method (CVM) was followed to estimate their WTP, and factors affecting WTP were identified through the logistic regression model. The results elicited farmers perceived that conservation tillage technologies would facilitate by reducing costs, timely land preparation, seed sowing and planting, appropriate positioning of seed and fertilizers, and higher soil moisture. Nevertheless, most of the farmers wanted to adopt conservation tillage technologies, while about 79% would like to pay for it. Although farmers' average WTP for individual purchases was higher, most were interested in the cooperative systems for adopting conservation tillage machines. Farmers' WTP for both individual and cooperative purchases was influenced by location of wheat production, farming experience, and demonstration plots. Additionally, individual payment system was affected by the amount of wheatland and training while credit affected the cooperative purchase system. Besides, the farmers would like to expand their wheat farms by approximately 73.33% after adopting conservation tillage technologies. The refusal to pay for conservation tillage technologies was mostly due to low-quality spare parts, lack of technical understanding, and unawareness of the technology. This study suggests that providing training among farmers and operators, credit support, and making machines and spare parts available in the nearest markets would support adopting conservation technologies. Besides, cooperative-based payment system should be formed to help small-scale farmers adopt conservation tillage techniques for sustainable agriculture in an environment-friendly way.

How Capital Endowment and Ecological Cognition Affect Environment-Friendly Technology Adoption: A Case of Apple Farmers of Shandong Province, China

Ever-increasing global environmental issues, land degradation, and groundwater contamination may significantly impact the agricultural sector of any country. The situation worsens while the global agricultural sectors are going through the unsustainable intensification of agricultural production powered by chemical fertilizers and pesticides. This trend leads the sector to exercise environmentally friendly technology (EFT). Capital endowment and ecological cognition may significantly impact fostering farmers' adoption of environmentally friendly technology. The government also tends to change the existing policies to cope with ever-increasing challenges like pollution control, maintaining ecological balance, and supporting agricultural sectors substantially by employing ecological compensation policy. The study's main objective is to explore the impacts of farmer's ecological compensation, capital endowment, and ecological cognition for the adoption of EFT. The empirical setup of the study quantifies with survey data of 471 apple farmers from nine counties of Shandong province. The study used Heckman's two-stage model to craft the findings. The results showed that 52.02% of fruit farmers adopted two environmentally friendly technologies, and 23.99% of fruit farmers adopted three forms of environmentally friendly technologies. At the same time, we have traced that the capital endowment, planting scale, family income, and technical specialization of fruit farmers significantly impact adopting EFT. The study also revealed that understanding ecological compensation policy has a significant positive effect on adopting environmentally friendly technology. Seemingly, ecological compensation policy has a specific regulatory effect on fruit farmers' capital endowment and ecological cognition. Therefore, it is necessary to extend the demonstration facilities, training, and frequently arrange awareness-building campaigns regarding rural non-point source pollution hazards and improve the cognition level of farmers. The agriculture extension department should strengthen the agricultural value chain facilities to make farmers fully realize the importance of EFT. Government should promote and extend the supports for availing new and innovative EFT at a reasonable price. Moreover, cooperative, financial, and credit organizations need to lead for the smooth transition of EFT. The agricultural cooperatives and formal risk-taking networks should act responsibly for shaping the behavioral factors of farmers.

Understanding the determinants of climate change adaptation strategies among smallholder maize farmers in South-west, Nigeria

Climate is one of the most important factors in agricultural productivity, which could directly or indirectly influence productivity since the climate is linked to physiological processes. It is, therefore, essential to understanding the various strategies used by farmers to mitigate the adverse impact of climate change and the factors that influence maize farmers' adoption and intensity of climate change adaptation strategies among smallholder maize farmers in South-west Nigeria. In all, a sample of three hundred and thirty (311) smallholder maize farmers were interviewed. A double-hurdle count data model was employed to estimate the factors influencing farmers' adoption of adaptation strategies while accounting for selection bias with the plugging of inverse mill ratio (IMR) as a regressor. Significant variables such as household size, depreciation ratio, frequency of extension visits, access to extension, and non-farm income were factors influencing the adoption of climate change adaptation strategies among maize farmers. Age of the respondent, age square, household size, farm-based organization (FBO), non-farm income, climate information, access to credit, farmers residing in Osun State (location_Osun), distance to market significantly influenced the intensity of climate change adaptation strategies. This study, therefore, concluded that farm-level policy efforts that aim to improve rural development should focus on farmers' membership in FBO, increase the visits of extension agents, encourage non-farm income and access to climate change information, particularly during the off-cropping season. Policies and investment strategies of the government should be geared towards supporting improved extension service, providing on-farm demonstration training, and disseminating information about climate change adaptation strategies, particularly for smallholder farmers in Nigeria.

Improved storage mitigates vulnerability to food-supply shocks in smallholder agriculture during the COVID-19 pandemic

Millions of smallholder farmers in low-income countries are highly vulnerable to food-supply shocks, and reducing this vulnerability remains challenging in view of climatic changes. Restrictions to limit the spread of the COVID-19 pandemic produced a severe supply-side shock in rural areas of Sub-Saharan Africa, including through frictions in agricultural markets. We use a large-scale field experiment to examine the effects of improved on-farm storage on household food security during COVID-19 restrictions. Based on text message survey data we find that the prevalence of food insecurity increased in control group households during COVID-19 restrictions (coinciding with the agricultural lean season). In treatment households, equipped with an improved on-farm storage technology and training in its use, food insecurity was lower during COVID-19 restrictions. This underscores the benefits of improved on-farm storage for mitigating vulnerability to food-supply shocks. These insights are relevant for the larger, long-term question of climate change adaptation, and also regarding trade-offs between public health protection and food security.

Willingness to Pay for Hexanal Technology among Banana Farmers in Meru County, Kenya

From the perspective of food categories, fresh produce are the leading sources of food loss and waste globally. Their highly perishable nature shortens their shelf-lives leading to high postharvest losses if not properly handled. Currently, these losses are estimated at sixty-six percent based on total weight. Reduction of these losses will ensure constant supply of food along the supply chain as well as economic empowerment of the rural poor. Hexanal which is a naturally occurring compound has been developed as an intervention to prolong shelf-life of delicate tropical fruits such as bananas while also maintaining their quality. However, empirical evidence is still required on the usefulness of hexanal to farmers. It is envisaged that such evidence would inform scaling up of the technology in Kenya. This study assessed willingness to pay for hexanal and the factors influencing WTP amounts among banana farmers in Meru County, Kenya. Primary data was collected from 130 respondents who were grouped into aware and not aware of Hexanal. Results indicate that farmers who are aware of hexanal had a higher mean WTP Ksh 466.47 (US $4.66) compared to those not aware Ksh 331.86 (US $3.32). Factors such as age and income influenced the WTP amounts between subsamples. The major key policy implication of the study is the importance of stakeholders investing in the dissemination of information on hexanal among farmers to enhance uptake.

The use and profitability of hermetic technologies for grain storage among smallholder farmers in eastern Kenya

Hermetic storage technologies (HSTs) have been disseminated in Sub-Saharan Africa (including Kenya) to reduce grain storage losses among farmers. We carried out a study in three counties in eastern Kenya to assess the use and profitability of HSTs among farmers. Data were collected from 613 farmers using a semi-structured questionnaire and Kobo Toolbox via android tablets. Results showed an increase in use of HSTs among farmers from 53.7% in 2015 to 91.2% in 2017. PICS was the most used hermetic bags by farmers (84%) in 2017. Majority of farmers (73.5%) received training in the use of HSTs from extension agents and agro-dealers. About 40% of respondents purchased additional (one to five) bags after their first experience using them. The quantity of grain produced made up about half of the farmer's decision to store. The primary reason (87%) farmers used hermetic bags was the need to manage insect pests. Maize and beans were the most produced and most stored crops; but maize was the most stored in HST. Grain price seasonality showed a near doubling effect between the lean and harvest seasons. Estimates of the return on investments (ROI) ranged between 13 and 80% for all crops and maize stored in hermetic bags had the highest ROI. Awareness and trainings are key in increasing adoption and proper use of HSTs.