IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v35y2023i7p2107-2128.html
   My bibliography  Save this article

Smallholder farmers' willingness to pay for two‐wheel tractor‐based mechanisation services in Zambia and Zimbabwe

Author

Listed:
  • Hambulo Ngoma
  • Paswel Marenya
  • Adane Tufa
  • Arega Alene
  • Lovemore Chipindu
  • Md Abdul Matin
  • Christian Thierfelder
  • David Chikoye

Abstract

Mechanisation is back among top development policy priorities for transforming African smallholder agriculture. Yet previous and ongoing efforts ubiquitously suffer from lack of scientific information on end‐user effective demand for different types of mechanical innovations to inform public investment or business development programmes. We assess smallholder farmers' willingness to pay (WTP) for two‐wheel tractor (2WT)‐based ripping, direct seeding and transportation using a random sample of 2800 smallholder households in Zambia and Zimbabwe. Applying the Becker–DeGroot–Marschak Mechanism (BDM) experimental auctions, we find that at least 50% of sample households in Zambia and Zimbabwe were willing to pay more than the prevailing market prices for ripping. In nominal terms, sample households in Zimbabwe were willing to pay more than those in Zambia for the different services. Empirical results suggest that wealth is the strongest driver of WTP for tillage and seeding 2WT services while labour availability and using animal draft power reduce it. These findings imply a need to (i) raise awareness and create demand for 2WT‐based services in an inclusive business manner that does not create perverse incentives and (ii) better target mechanisation to operations with comparative advantage, using approaches that bundle 2WT‐based and other mechanisation services with asset‐agnostic credit schemes or other interventions meant to overcome asset‐mediated barriers.

Suggested Citation

  • Hambulo Ngoma & Paswel Marenya & Adane Tufa & Arega Alene & Lovemore Chipindu & Md Abdul Matin & Christian Thierfelder & David Chikoye, 2023. "Smallholder farmers' willingness to pay for two‐wheel tractor‐based mechanisation services in Zambia and Zimbabwe," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 2107-2128, October.
    • Handle: RePEc:wly:jintdv:v:35:y:2023:i:7:p:2107-2128
    DOI: 10.1002/jid.3767
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3767
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3767?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andersson Djurfeldt, Agnes & Djurfeldt, Göran & Bergman Lodin, Johanna, 2013. "Geography of Gender Gaps: Regional Patterns of Income and Farm–Nonfarm Interaction Among Male- and Female-Headed Households in Eight African Countries," World Development, Elsevier, vol. 48(C), pages 32-47.
    2. Binswanger-Mkhize, Hans P. & Savastano, Sara, 2017. "Agricultural intensification: The status in six African countries," Food Policy, Elsevier, vol. 67(C), pages 26-40.
    3. Binswanger, Hans, 1986. "Agricultural Mechanization: A Comparative Historical Perspective," The World Bank Research Observer, World Bank, vol. 1(1), pages 27-56, January.
    4. Morawetz, Ulrich B. & De Groote, Hugo & Kimenju, Simon Chege, 2011. "Improving the Use of Experimental Auctions in Africa: Theory and Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-17, August.
    5. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-1348, December.
    6. T.S. Jayne & Jordan Chamberlin & Lulama Traub & Nicholas Sitko & Milu Muyanga & Felix K. Yeboah & Ward Anseeuw & Antony Chapoto & Ayala Wineman & Chewe Nkonde & Richard Kachule, 2016. "Africa's changing farm size distribution patterns: the rise of medium-scale farms," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 197-214, November.
    7. Adu-Baffour, Ferdinand & Daum, Thomas & Birner, Regina, 2019. "Can small farms benefit from big companies’ initiatives to promote mechanization in Africa? A case study from Zambia," Food Policy, Elsevier, vol. 84(C), pages 133-145.
    8. Hugo De Groote & Simon Chege Kimenju & Ulrich B. Morawetz, 2011. "Estimating consumer willingness to pay for food quality with experimental auctions: the case of yellow versus fortified maize meal in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 42(1), pages 1-16, January.
    9. Ruttan, Vernon W., 1987. "Induced innovation and agricultural development," Food Policy, Elsevier, vol. 12(3), pages 196-216, August.
    10. Horowitz, John K., 2006. "The Becker-DeGroot-Marschak mechanism is not necessarily incentive compatible, even for non-random goods," Economics Letters, Elsevier, vol. 93(1), pages 6-11, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aryal, Jeetendra Prakash & Rahut, Dil Bahadur & Thapa, Ganesh & Simtowe, Franklin, 2021. "Mechanisation of small-scale farms in South Asia: Empirical evidence derived from farm households survey," Technology in Society, Elsevier, vol. 65(C).
    2. Alphonce, Roselyne & Alfnes, Frode, 2015. "Eliciting Consumer WTP for Food Characteristics in a Developing Context: Comparison of four methods in a field experiment," Working Paper Series 01-2015, Norwegian University of Life Sciences, School of Economics and Business.
    3. Thomas Daum & Filippo Capezzone & Regina Birner, 2021. "Using smartphone app collected data to explore the link between mechanization and intra-household allocation of time in Zambia," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(2), pages 411-429, June.
    4. Dragicevic, Arnaud Z. & Ettinger, David, 2011. "Private Valuation of a Public Good in Three Auction Mechanisms," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(2), pages 1-29, April.
    5. Bull, Charles & Courty, Pascal & Doyon, Maurice & Rondeau, Daniel, 2019. "Failure of the Becker–DeGroot–Marschak mechanism in inexperienced subjects: New tests of the game form misconception hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 235-253.
    6. Idelphonse O. Saliou & Afio Zannou & Augustin K. N. Aoudji & Albert N. Honlonkou, 2020. "Drivers of Mechanization in Cotton Production in Benin, West Africa," Agriculture, MDPI, vol. 10(11), pages 1-13, November.
    7. Giller, Ken E. & Andersson, Jens & Delaune, Thomas & Silva, João Vasco & Descheemaeker, Katrien & van de Ven, Gerrie & Schut, Antonius G.T. & van Wijk, Mark & Hammond, Jim & Hochman, Zvi & Taulya, God, 2022. "IFAD Research Series 83: The future of farming: who will produce our food?," IFAD Research Series 322005, International Fund for Agricultural Development (IFAD).
    8. Aihounton, Ghislain & Christiaensen, Luc, 2024. "Does agricultural intensification pay in the context of structural transformation?," Food Policy, Elsevier, vol. 122(C).
    9. Fiamohe, R. & Agossadou, A.J. & Kinkpe, T., 2018. "Contribution of improved processing equipment to rice value chain upgrading in West Africa: Evidence from Benin," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275966, International Association of Agricultural Economists.
    10. Daum, Thomas & Villalba, Roberto & Anidi, Oluwakayode & Mayienga, Sharon Masakhwe & Gupta, Saurabh & Birner, Regina, 2021. "Uber for tractors? Opportunities and challenges of digital tools for tractor hire in India and Nigeria," World Development, Elsevier, vol. 144(C).
    11. Ecker, O., 2018. "Agricultural Transformation and Food and Nutrition Security: Does Farm Production Diversity (Still) Matter for Dietary Diversity among Ghanaian Farm Households?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276999, International Association of Agricultural Economists.
    12. Edoardo Masset & Suchi Kapoor Malhotra & Neha Gupta & Ratika Bhandari & Howard White & Heather MacDonald & Ranjitha Puskur & Niyati Singaraju & Hugh Sharma Waddington, 2023. "PROTOCOL: The impact of agricultural mechanisation on women's economic empowerment: A mixed‐methods systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 19(3), September.
    13. William Neilson & Michael McKee & Robert P. Berrens, 2008. "Value and Outcome Uncertainty as Explanations for the WTA vs WTP Disparity: Theory and Experimental Evidence," Working Papers 08-07, Department of Economics, Appalachian State University.
    14. Johnston, Marie, 2014. "Contingent Valuation: A Comparison of Referendum and Voluntary Contribution Mechanisms," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165843, Australian Agricultural and Resource Economics Society.
    15. Thomas Daum & Regina Birner, 2022. "The forgotten agriculture-nutrition link: farm technologies and human energy requirements," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(2), pages 395-409, April.
    16. Parkhurst, Gregory M. & Nowell, Clifford, 2014. "The Role of Confidence in Truthful Revelation of Private Values," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0, pages 1-16.
    17. Svirsky, Daniel, 2014. "Money is no object: Testing the endowment effect in exchange goods," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 227-234.
    18. Espérance Zossou & Rose Fiamohe & Simple Davo Vodouhe & Matty Demont, 2022. "Experimental auctions with exogenous and endogenous information treatment: Willingness to pay for improved parboiled rice in Benin," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 806-825, September.
    19. Takeshima, Hiroyuki, 2017. "The roles of agroclimatic similarity and returns on scale in the demand for mechanization: Insights from northern Nigeria," IFPRI discussion papers 1692, International Food Policy Research Institute (IFPRI).
    20. Neil J. Buckley & Katherine Cuff & Jeremiah Hurley & Logan McLeod & Robert Nuscheler & David Cameron, 2012. "Willingness-to-pay for parallel private health insurance: evidence from a laboratory experiment," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 137-166, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:35:y:2023:i:7:p:2107-2128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.