Potential Economic Impact and Willingness to Pay for Postharvest Technologies of Mangoes and Their Value-added Products Among Producers and Consumers in Kenya

Abstract

Postharvest loss reduction is increasingly recognized as a promising strategy for ensuring food and nutrition security. Historically, horticultural research has focused on increasing production with little emphasis on minimization of postharvest losses (PHLs). In Kenya there is need to reduce PHLs estimated at up to 50% in mangoes. Low adoption of postharvest loss reduction technologies (PHLRTs) and poor access to remunerative markets are considered as key drivers of the postharvest losses. Reduction of PHLs require adoption of cost effective and acceptable PHL reduction technologies. It is against this background that the Rockefeller Foundation is supporting a postharvest project started by the University of Nairobi (UoN) to create awareness and provide applicable PHLRTs to smallholder farmers. Some of these technologies are tunnel solar dryers, charcoal and brick coolers. Charcoal coolers and zero energy brick coolers are off-grid evaporative cooling technologies which are appropriate for smallholder farmers without access to electricity. Further, they are constructed from locally available materials making them accessible to resource-poor smallholder farmers. Solar dryers reduce PHLs through drying of fruits and vegetables into more shelf stable products such as mango leather and mango crisps which fetch higher prices than the equivalent quantities of fresh mango fruits. Though they are so important in this respect, their potential economic impact on smallholders has not been well studied. Globally, these technologies are not new but their adoption in Kenya is limited, and factors affecting their utilization and consumption of their valueadded products are not well understood. Therefore, the purpose of this study was to estimate the expected return on investment in PHLRTs and willingness to pay (WTP) for the PHLRTs and their value-added products among producers and consumers in Kenya. Specifically, the study sought to: (1) Estimate

the potential economic impact of PHLRTs among smallholder mango farmers in Embu County; (2) Analyze smallholder mango farmers’ WTP for PHLRTs and its influencing factors; and (3) Assess consumer awareness and WTP for solar-dried mangoes that are naturally preserved in Nairobi County, Kenya. Theoretically, this study is anchored on welfare economics and the random utility maximization theory. The potential benefits of investing in PHLRTs were estimated using the economic surplus model. The WTP was estimated using a double hurdle model. Consumer awareness and WTP for naturally preserved solar dried mangoes (NPSDM) were analysed descriptively, while a tobit model was employed to assess the determinants of WTP. Multistage sampling procedure was adopted in this study. Embu and Machakos Counties were purposively selected. Farmers in these Counties had previously been trained on proper agronomic practices to reduce preharvest losses. These Counties also contribute significantly to the total mango production in the country. The proportionate to size sampling was used to determine the sample size in Masii and Karurumo Locations of Machakos and Embu Counties, respectively. Systematic random sampling was used to select 320 mango farmers in Masii and Karurumo Locations. Rising incomes in urban centres is associated with increased expenditure on healthy food choices, particularly fruits and vegetables. Nairobi county was chosen for the consumer survey since it is the main consumption area of the dried fruit products. Accidental sampling procedure was employed in selecting 414 buyers (consumers) from Zucchini, Carrefour, Chandarana and Tuskys supermarkets in Nairobi. Quantitative and qualitative research designs were used in this study. Both primary and secondary data were collected using semi-structured questionnaires, literature review and key informants. A cost–benefit analysis (CBA) of the postharvest project revealed that investment in the proposed PHLRTs is viable. This profitability heavily depends on uptake of the

technologies and the cost of capital. It was found that the farmers’ likelihood of paying for PHLRTs and WTP amount were positively influenced by price, agricultural group membership and income from mangoes. Another significant factor was gender, which negatively and positively influenced the probability to pay in Embu and Machakos, respectively. However, age, experience, land tenure, market access and credit access significantly influenced WTP amount negatively. Results revealed that the WTP amounts for the PHLRTs were lower than the market prices. Only 16% of the consumers were aware of solar dried mangoes. However, consumers were willing to pay 29% more for NPSDM, with most of them interested in taste. This WTP was found to be positively influenced by access to mass media for information on food, purchase of mango products in retail stores and having tasted naturally preserved mangoes. Therefore, promoting the product through the media and within the retail stores is necessary to increase awareness and demand. These findings are vital in developing niche markets for NPSDM. The study concludes that investment in PHLRTs is viable and consumers are willing to pay a premium for NPSDM. Further, viability of the technologies is expected to be higher at higher adoption rates. However, the producers’ WTP amount was lower than the market rate. Thus, the government should spur demand through enhanced extension programmes and short-term price subsidies. Promotion of products resulting from the tunnel solar dryer should also be undertaken to trigger demand among consumers.