ASSESSING FARMERS’ WILLINGNESS-TO-PAY

FOR IMPROVED COMMON BEANS VARIETIES A case study of Kasungu and Dedza districts in Malawi

Outline of the presentation

• Problem statement• Objectives• Methodology• Results• Discussion & Conclusion• Suggestions for future research

Problem statement

Lilongwe,

05/06/2015

Problem statement

• Common beans are important legumes in Malawi due to its versatile benefits (cash & food crop)

• Technically, farmers can experience the benefits despite growing seed from informal sources but can forgo the opportunity cost of high yields

• Problem is this system is rarely supported hence can affect negatively on agricultural productivity & incomes of farmers

Common beans production in Mw (2002 to 2012)Production area

Average area allocated to beans is about 256, 000 ha thus a farmer cultivates on <1ha because priority is given to maize Source: Faostat, 2013

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

Beans Maize Tobacco

Are

a (1

000

Ha)

Yield gap

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

500

1000

1500

2000

2500

3000

Bean Potential bean Maize

Yie

ld (

kg/h

a)

Bean yield gap

Produce slightly below 500kg/ha & potential is up to 2000kg/ha for beans under field trial conditions. Maize yield is 1700kg/ha

Source: Bulletin of tropical legumes, 2013

Problem cont.

• Linking informal seed system & formal by adopting improved bean seed varieties can potentially close the yield gap

• Despite large numbers of improved bean seed developed and released in Malawi, the varieties are not used by farmers

• It is therefore of the essence to assess farmers perceptions with regards to improved varieties of beans and then gauge their Willingness-to-Pay (WTP)

Objectives of the study

Lilongwe,

05/06/2015

Objectives of the study

Specifically, the study aims to;

• Assess awareness, attitude and perception with regards to improved bean seed

• Measure farmers’ WTP for the seeds

• Analyze dissemination channels of commercial bean seed

Knowledge gap

What is known What is not known

• Breeders came up with improved bean seed

• Farmers demand of seed using WTP in market good

• Poor marketing of improved bean seed

• Dissemination channels

• Farmers’ exposure to seed

• Perception of farmers

Methodology

Lilongwe,

05/06/2015

Study area

Population of Kasungu district is 627,467 & Kaluluma EPA has 45,769

Dedza district is 624,445 & Bembeke EPA has 30,358

Methodology

• Purposive and Random sampling were adopted

• A total of 132 households and 19 traders were selected

• Primary data was collected using a structured questionnaire and was processed in SPSS

• A five-point likert scale was used to assess farmer’s perception

• CV method using double bounded dichotomous choice questions and mean WTP was found using confidence interval

Results

Lilongwe,

05/06/2015

Perception

Do you believe that with the use of improved bean seed varieties

your productivity can increase?

N Minimum Maximum Mean Std dev

Statistics Statistics Statistics Statistics Std error Statistics

132 3 5 4.61 0.050 0.576

Likert scale from strongly disagree to strongly agree

Majority are towards strongly agree

Source: Own data

Varieties preferred by farmersWhat varieties of improved bean seed do you prefer to grow?

Varieties farmers prefer the most are Kholophete and Napilira

Source: Own data

Varieties stocked by tradersWhat are the improved bean seed varieties usually stocked for trade?

Napilira and Kholophete are varieties usually stocked by the traders

Traders are responding to farmers preferences

Source: Own data

The buying and selling markets of traders

Where is your buying and selling market for improved bean seed?

Majority of traders buy and sell their seed at the local market

Source: Own data

At the buying market;

• 63% mentioned local markets

•21% buys from middlemen

•16% stalk seed from farm-gate

Buyers of bean seed at the market

Who are the buyers of your improved bean seed at the selling market?

The buyers at the local market are the farmers

Source: Own data

Three marketing channels discovered

Seite 20

Breeder

NGO/Govt

Trader

ConsumerB

reeder

NGO/Govt

Poducer

Friends/Own saved

Producer

Trader

Consumer

Initially, this was supposed to be the channel for bean seed to end user

but currently so many distorted along the way. 3rd channel dominating

Analyzing WTPFrequency distribution of WTP from double bounded

Are you willing to pay MK…….for an improved bean seed variety of

your preference?

More than 80% are WTP MK390/ Kg (€1,44) & grain costs MK240 (€

0,87). The 2nd premium is MK 760 (€2.88)

Source: Own data

Frequency distribution from open ended question

How much are you willing to pay for a Kg of beans?

Amount (MK) N Per cent

0 4 3

95 3 2.3

190 1 0.8

305 7 5.3

380 22 16.7

475 26 19.7

570 12 9.1

665 10 7.6

760 47 35.6

Total 132 100

Mean WTP

The study is 95% confident that the mean WTP is between MK 527,78 (€2,42)/kg and MK 591,92 (€2,72)/kg.

Source: Own data

Problems faced by Farmers in Seed Acquisition

What are the problems faced when acquiring seed?

35% of farmers mentioned lack of money as problem with seed acquisition

Source: Own data

Problems faced by traders

What are the problems faced when buying improved common bean seed?

Most traders mentioned poor roads and limited credit opp as their no.1 problemSource: Own data

Discussion & Conclusion

Lilongwe,05/06/2015

Discussion and conclusion

• The study is limited in area, hence results cannot be generalized

• In adoption, convincing farmers to shift from recycling to buying, the

marginal benefit of adopt has to be substantial

• In conclusion, farmers are aware of the benefits of adopting improved

bean seed and developed a positive perception

• Majority of farmers are willing to spend money to purchase the seed

• The study didn’t find any functioning formal seed dissemination channels

• Existing maize seed channels works, this could be applied to beans as

well

Recommendation & suggestion of future research

• Traders need to be licensed by seed services

• Policies should be in place to regulate the seed systems in Malawi

• Govt should include significant amounts of legumes (soybean,

beans, ppeas) in FISP

• There is need for a study to assess vulnerability of farmers in the

bean seed system

– Price hikes, dodgy seed

• Economic studies on farmer decision need to be conducted

– e.g. returns to investments

Grace Timanyechi Munthali

Economist, DARS

Chitedze Research StationP.O. Box 158, Lilongwe, Malawi

e-mail: timanyechi.24@gmail.com

05.06.2015 Grace Timanyechi

Thank you for your attention!!

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