Estimating the Willingness to pay for Veterinary Services in India: A Methodology Paper

Public provision of agricultural support services has been an important component of agricultural development strategy in India. A number of these services have been delivered to the farmers for free or with substantial subsidies. Over the last decade or so, however, serious doubts have been expressed over the sustainability and desirability of this model. Lack of public funds for sustaining the vast delivery infrastructure as well as poor record of government in managing public programs has refocused attention on ways of making these services more cost effective and for improving the quality of these services. Introduction of some degree of commercialization is one way of improving the service quality (Ahuja and Punjabi, 1999a and 1999b). Cost recovery, it is argued, can build client focus and accountability in the delivery of public services. At the same time, however, serious concerns prevail in India about the distributional consequences of full cost recovery or of private sector participation in the delivery of these services. The debate has centred around farmers’ willingness to pay for these services and the possible adverse impact of commercialization on poor farmers. Although these are empirical issues, the empirical studies pertaining to willingness to pay and distributional consequences of commercialization of agricultural services in India are rare.