Economic Analysis of Farmers’ Preferences for Crop Variety Traits Using a Choice Experiment Approach: Lessons for on-Farm Conservation and Technology Adoption in Ethiopia
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2008-01
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Addis Ababa University
Abstract
Societies depend on agricultural innovation processes for food security on local, regional and global scales. Crop genetic resources, embodied in the seed planted by farmers, are integral components of these processes. Ethiopia has immense wealth of crop genetic resources, which is part of its rich biological diversity. The country’s genetic resources are, however, subject to serious erosion and irreversible losses due to policy, institutional, and market failures. It is, thus, both a challenge and an opportunity for Ethiopia to design conservation policies that enable its agriculture-based economy to make the best use of its crop diversity. The purpose of this study is to contribute to a better understanding of the challenges by providing an insight into Ethiopian farmers’ crop variety attribute preferences and by identifying the most important farm household contextual factors that condition their variety attribute preferences. The study argues that farmers are maximizing their household utility by consuming their preferred crop variety attributes not by directly consuming the varieties that embed those preferred attributes. Undertaking on-farm conservation ventures, therefore, requires understanding farmers’ variety attribute preferences and this study contributes to that effect. The current study also underscores the importance of eliciting farmers’ variety attribute preferences in the areas of crop breeding priority setting and targeted adoption of improved varieties. The study applies the choice experiment (CE) method to estimate the private utility farmers derive from four traits of sorghum and teff varieties (the two major crops in the country) including sale price (marketability of the variety), productivity, environmental adaptability (resistance to drought and frost occurrences), and yield stability of the variety despite occurrences of disease and pest problems. Our empirical analysis of farmers’ preferences for these attributes is based on primary data collected from 131 teff and sorghum growing farmers in North Wollo zone. The CE approach employed in this study involved asking farmers to make a hypothetical choice between different crop varieties offered in a choice set and differentiated by the levels the above attributes take.
Findings demonstrate variation in the private values farmers attach to crop varieties and their attributes across farmers and the two crops considered in this study. Farm households attach the highest private value to environmental adaptability trait of both sorghum and teff crops; this is followed by yield stability and productivity attributes of the same crops. The results of the empirical analysis also demonstrate that farmers are slightly more risk averse towards a non-adaptable variety of teff than towards a sorghum variety with a similar trait. The results reveal that differences between farm households, in terms of household characteristics, their endowments and constraints, and the level of development integration (in the areas of basic infrastructure and agricultural extension) affect farmers’ private valuation of crop variety traits. Teff and sorghum varieties that are resistant to drought and frost occurrences are valued most highly by larger and poorer farm households residing far away from basic infrastructures and less so by medium sized, and moderately experienced farm households. Our results also show that the demand for yield stability trait in sorghum varieties is most noticeable in richer households living in easily accessible areas, whereas larger and poorer households derivethe highest positive utility from stable yielding teff varieties. Relatively richer farm households who have been participating in the agricultural extension package and who have at least one member working off-farm derive the highest positive utility from more productive sorghum varieties. On the other hand, poorer farm households who do not participate in the extension package and reside in less accessible areas derive the highest positive utility from more productive teff varieties. Marketable sorghum varieties i.e., those that fetch the highest price for the farm family, are valued most highly by male headed farm households. Farm households with accumulated wealth in the form of higher total livestock value derive the highest private utility from marketable teff varieties. The above empirical results have implications not only for on-farm conservation but also for improved variety adoption and breeding priority setting in Ethiopia. For farming systems operated by relatively rich farm households, and for those found in easily accessible areas, conservation should be target to environmentally adaptable varieties of both teff and sorghum crops. To target and address variety demand for income shock vulnerable and segmented farmers, the priority variety attributes are environmental adaptability, yield stability, and to a lesser extent the productivity traits of teff and sorghum varieties. Breeding should also target to satisfy demands of different farm household types classified by their resource endowments, preferences and constraints. The research priority setting should, therefore, also ask ‘breeding for whom?’ not just only ‘breeding for which environment?’, as it is mostly the case.
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Economic Analysis of Farmers’ Preferences