1. Farmers’ Willingness to Pay for Improved Agricultural Technologies: Results from Field Experiment Babati, Tanzania
Apurba Shee, Carlo Azzarri and Beliyou Haile
AR-ESA Annual Meeting July , Dar es Salaam

2. Outline Introduction and objective Experimental design and survey
Econometric framework
Empirical results
Concluding comments

3. Introduction and objective
Promotion of sustainable intensification of agriculture, introduces improved technologies such as improved seeds and fertilizers
But it is not clear whether small holder farmers would be willing to pay for these technologies, and what factors determine their informed demand for technologies
This study elicits willingness to pay (WTP) using stated preference based contingent valuation (CV) experiment conducted with 400 households in Tanzania
Most contingent valuation studies in developing countries have focused on consumer preferences (Durand-Morat et. al 2016) Limited research on producers’ preferences

4. Introduction and objective
WTP is usually defined as the maximum amount that an individual would be willing to pay for a good or service without losing his/her utility
Since hybrid seed and inorganic fertilizer are marketable goods and the farmers in the area under investigation were exposed to these technologies, stated preference approach by double-bounded CV method appears most appropriate
We follow Hanemann, Loomis and Kanninen (1991) approach, known as dichotomous CV with follow-up or double-bounded CV

5. Experimental design

6. Econometric framework and results
Variables
Estimates
Standard error
Mean WTP for fertilizer *
Sigma *
Mean WTP for hybrid maize seed *
259.48 *
223.19
* Indicates statistical significance at 99% confidence level

7. Empirical results

8. Concluding comments
The average WTP is found to be 61.6% higher for hybrid maize seed and 14.7% lower for inorganic fertilizer compared to their average market prices locally available in 2013
Education of household head, maize productivity and extension services are found to influence farmers’ WTP positively, whereas farmers risk aversion preferences and distance to nearest supply market have a significant negative influence
Considering the finding that farmers risk preferences influence WTP negatively, it would be important policy recommendation to introduce agricultural insurance or other risk mitigating instruments to boosting farmers demand for improved agricultural technologies