Smallholder Rice Farmers’ Willingness-to-pay for Private Extension Services in Liberia: a Case Study of Gibi District

Abstract

Agriculture plays a crucial role in the post-conflict developmental agenda of Liberia. Despite the many pro-growth policies and programs implemented in the sector, most farmers still do not have access to agricultural extension services. Due to limited funding, the Government of Liberia is currently promoting a demand-driven extension policy. However, in most rural areas where the majority of resource-poor smallholder farmers live, extension services are primarily offered by non-governmental organizations (NGOs). It is not clear if rural farmers would be able and willing to pay for private extension services that the government is promoting. Against this background, this study was designed to evaluate smallholder rice farmers’ willingness-to-pay (WTP) for agricultural private extension services in Gibi District of Liberia. The specific objectives of the study were to determine the factors influencing rice farmers’ perception of the effectiveness of NGO-provided extension services and to assess the determinants of demand for and intensity of use of those services. Also, the study estimated smallholder rice farmers’ WTP for private extension services and determine the factors influencing that WTP. Multistage sampling technique was used to select 296 smallholder rice farmers in Gibi District of Liberia. Primary data were collected using a semi-structured questionnaire administered by trained enumerators in face-to-face interviews. The contingent valuation method (CVM) was used to elicit respondents’ maximum WTP for private extension services. Descriptive statistics were used to characterize the farmers and the extension delivery system. Probit model was used to assess the factors influencing farmers’ perception of the effectiveness of NGO-provided extension services and heckpoisson model was employed to evaluate the drivers of demand for extension services and the intensity of use. Finally, a double-bounded logit model was used to estimate the farmers’ mean WTP for the extension services and its determinants. The results indicated that 48.6 percent of the farmers received extension services. About 97.9 percent of those services were provided by NGOs. The farmers’ opinions differed concerning the adequacy, usefulness, and quality of follow-up activities offered by NGOs and the majority perceived NGO-offered extension services as moderately effective. The probit model results revealed that gender of the household head, number of training sessions, membership of saving club, extension agent credibility and access to inputs had significant effect on farmers’ perceived effectiveness of NGO-provided extension services in the district. The heckpoisson model results showed that farm income, commercialization of crops and mobile-phone ownership significantly influenced farmers demand for extension services, while gender, cash- xii crop ownership, use of improved seeds, and awareness of extension services significantly influence the intensity of their use. Furthermore, results of double-bounded logit revealed that 78.7 percent of the rice farmers are willing to pay for privatized extension services and on average, a farmer was willing to pay US$11.21 per farm visit. Farmer’s age, years of formal schooling, household size, annual income and distance to extension source had a significant effect on smallholder rice farmers’ WTP for private extension services. The study recommends that policymakers and other stakeholders in Liberia should consider replicating the strategy used by NGOs to encourage smallholder rice farmers to adopt private extension services. In addition, they should formulate policies that foster collaboration between extension service providers and local financial institutions to enhance farmers’ credit access. It is also imperative for policymakers to implement agricultural programs that increase farmers’ income and access to improved rice varieties. Further, private sector should be encouraged to invest in extension services to take advantage of the high farmers’ WTP. This could be achieved through demand-pull approach such as contract farming between farmers and agribusiness entrepreneurs. Finally, the Government of Liberia should design and implement programs that will increase farmers’ income to enhance their capacity to pay for private extension services and services should be tailored according to the farmers’ socio-economic characteristics. Keywords: Agricultural extension services, contingent valuation method, double-bounded model, post-conflict, smallholder farmers, rice, willingness-to-pay, Liberia