Laston Petro MANJA, Gowokani Chijere CHİRWA, Patrick KAMBEWA

DETERMINANTS OF FARMERS’ WILLINGNESS TO PAY FOR SUBSIDISED FARM INPUTS IN MALAWI

This study uses the standard Tobit model to calculate both average household and aggregate willingness to pay (WTP) for subsidised fertilizers in Malawi and it traces the determinants of farmers’ WTP for the inputs. The results reveal that smallholder farmers are willing to pay for more inputs in the Farm Input Subsidy Programme (FISP) with the mean household WTP at MK1000 being about ten 50kg fertilizer bags and the total WTP at the same price being 46 891 bags per year for 4742 observed households. Significant determinants of WTP include farm size, food security and radio ownership

Keywords:

Malawi, FISP Willingness to Pay, FISS4, Tobit,

PDF

___

Abebe, Hiwot and Bogale, Ayalneh. (2014), “Willingness to pay for Rainfall based Insurance by Smallholder Farmers in Central Rift Valley of Ethiopia:
The Case of Dugda and Mieso and Environment, 1, pp.121-155. Woredas”, Asia Pacific Journal of Energy Chirwa, Ephraim and Dorward, Andrew. (2013), Agricultural Input Subsidies:
The Recent Malawi Experience, Oxford: Oxford University Press Chirwa, Ephraim and Dorward, Andrew. (2013), Private Sector Participation in the Farm Input Consortium.
Subsidy Programme in Malawi, The Future Agricultures Chirwa, Ephraim, Matita Mirriam and Dorward Andrew. (2013), Factors
Influencing Access to Agricultural Input Subsidy Coupons in Malawi, The Future Agricultures Consortium Dorward, Andrew and Chirwa, Ephraim. (2009), Cited in Chinsinga, Blessings
(2010). “Seeds and Subsidies: The Political Economy of Input Programmes in
Malawi” Working Paper 013, Future Agricultures. Dorward, Andrew and Chirwa, Ephraim. (2014), The Rehabilitation of Agricultural Input
Subsidies? IIED Working Paper. IIED, London. Dorward, Andrew. (2009), Rethinking Agricultural Input Subsidy Programmes in a Changing World.,University of London: School of Oriental and African Studies.
Greene, William. (2007), Econometric Analysis (6th edition). Prentice Hall.
Gujarati, Damodar. (2004), Basic Econometrics (4th ed). Sidney: McGraw-Hill.
Hagos, Dagnew, Mekonnen Alemu and Gebreegziabher, Zenebe. (2012),
“Households’ Willingness to Pay for Improved Urban Waste Management in Mekelle City, Ethiopia”, Environment for Development, April 2012.
Maddala, Gangadharrao. (1992), Introduction to Econometrics (2 York: Macmillan nd ed). New
Maganga, Assa, Mehire, A., Ngoma, K., Magombo, E. and Gondwe, P. (2014), “Determinants of
Lilongwe District, Malawi: Evidence from Mitundu Extension Planning Area”, Middle-East Journal of Scientific Research, Vol. 19, No. 10, pp. 1313-1318.
Maonga, Beston, Maganga Assa and Kankwamba Henry. (2015), “Smallholder Farmers’
Malawi”, International , No. 1. Pp. 87-100
Journal of Food and Agricultural Economics, Vol. Mason, Nicole and Ricker-Gilbert, Jacob. (2012), Disrupting Demand for
Commercial Seed: Input Agricultural Policy Research Institute Subsidies in Malawi and Zambia, Indaba (IAPRI) Mason, Nicole, Jayne Thomas and Mofya-Mukuka Rhoda. (2013), A Review of Zambia’s Way Forward. Indaba
Working Paper 77. IAPRI, Lusaka Agricultural Policy Research Institute (IAPRI). Minot, Nicholas, Kherallah Mylène and Berry Philippe. (2000), Fertilizer Market Reform and the Washington, D.C.: International Food
Determinants of Fertilizer Use in Benin and Malawi, Policy Research Institute. NSO (National Statistics Office). (2005a), Integrated Household Survey 2004- , Report, National Statistics Office, Zomba, Malawi.
Oladele, Idowu. (2008), “Factors Determining Farmers’ Willingness to Pay for Extension
Subtropica, Vol. 41, No. 4, 165- Stiglitz, Joseph and Rothschild, Michael. (1976), “Equilibrium in Competitive
Insurance Markets”, Quarterly Journal of Economics 93, pp.541-562. Wiggins, Steve and Brooks, Jonathan. (2010), The Use of Input Subsidies in
Developing Countries. Agricultural Policy and Markets. Paper first Presented to the Working Party on