FARMERS WILLINGNESS TO PAY AND CHOICE OF SMALLHOLDER WATER LIFTING TECHNOLOGIES: EVIDENCE FROM ADAMI TULU, LEMO AND DANGELA WEREDAS, ETHIOPIA.

Abstract

This paper analyzes the farmers’ willingness to pay (WTP) and demand for the smallholder water lifting technologies (SWLTs). The study employed Contingent valuation method (CVM), and 212 farmers’ were selected based on multi-stage sampling technique from three weredas, Adami Tulu, Lemo and Dangela. The selected sample households were asked a contingent valuation question using a double bounded elicitation with open ended follow up question. To examine the determinants of WTP and to compute the mean WTP for the SWLTs, probit and bivariate probit model were used. Using multinomial logit model determinants of demand for the SWLTs namely, motor pump, rope and washer and pulley were also examined. The probit model result shows that household size, household income, initial bid values, access to credit, access to market, off-farm activity and land size significantly affect the probability of the households’ WTP for the SWLTs. From the bivariate probit model, the computed mean WTP for the SWLTs using double bounded elicitations (DBE) are 18,575, 4,497.7 and 1,709 birr for motor pump, rope and washer and pulley respectively. The computed open ended elicitation mean WTP values are 15,226.70, 3,452.31and 1,218.33 birr for motor pump, rope and washer and pulley respectively. Likewise, the total WTP for motor pump, rope and washer and pulley from the DBE method is 14,265,600, 4,889,000 and 948,495 birr respectively. The total WTP for motor pump, rope and washer and pulley from open ended elicitation is 11,694,083, 3,752,661 and 676,173.15 birr respectively. The multinomial logit model result shows that, sex of the household head, credit access, household income, off-farm activity, access to market, quality of soil, ownership mode, agro-ecological zone and land size are found to be significant in affecting the probability of the households’ demand for the SWLTs. The main findings of this paper is that farmers’ are willing to pay for the SWLTs. But, the level of WTP and choice of technology is contingent upon and different from location to location. The DBE resultk2 shows that market price of rope and washer and motor pump lies between farmers’ upper and lower range of WTP bound but farmers’ are more willing to pay for pulley higher than what the existing market reveals. Also, the mean values obtained from the open ended elicitation is lower than the values from the double bounded elicitation. Thus, policy makers should be careful on the selection of the elicitation technique to elicit the farmers’ WTP. Moreover, the comparative analysis between male and female headed household shows that females are less willing to pay for the SWLTs.