| 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. |