Selling at the farmgate? Role of liquidity constraints and implications for agricultural productivity

Ateka, Josiah; Onono-Okelo, Perez Ayieko; Etyang, Martin N.

doi:10.1080/03031853.2021.1980409

Cited by 5 publications

(7 citation statements)

References 37 publications

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“…The high number of households opting to contribute labour could be attributed to the high level of liquidity constraints facing rural households in developing countries (Gibson et al. , 2016; Ateka et al ., 2021). Consistent with our findings, Casiwan-Launio et al.…”

Section: Resultsmentioning

confidence: 99%

“…WTP reflects the maximum contribution (cash or in-kind) that an individual is willing to pay to obtain an improvement in the quality of a good or service. WTP therefore, presents a better framing for studying the involvement of communities in conservation (which typically represents an improvement in forest conditions) compared to WTA which implies the minimum amount that individuals are willing to accept to cope with a deterioration in environmental quality (Carson, 2000; Florio and Giffoni, 2020; Ateka et al ., 2021).…”

Section: Methodsmentioning

confidence: 99%

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Understanding the nexus between forest dependence and willingness to pay for forest conservation: case of forest dependent households in Kenya

Waruingi

Ateka

Mbeche

et al. 2022

FER

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PurposeForests support human livelihoods and mitigate against climate change, yet they are at a risk of irreversible loss due to high degradation rates. The success of forest conservation mechanisms depends on involvement and support by forest dependent communities. In this paper, the authors assess forest dependent household's willingness to pay (WTP) labour or cash for a conservation programme seeking to restore degraded forestland in Mount Elgon Forest, Kenya.Design/methodology/approachData were collected from 919 households in Mt Elgon forest reserve, Kenya. A double bounded contingent valuation approach was used to examine households' WTP and an ordered probit model to estimate the determinants of WTP.FindingsThe findings of the study show a higher WTP for conservation through labour days (12 days/month, equivalent to 1800 KES/month) compared to cash (KES 450/month). Forest dependence has a significant influence on households' willingness to support conservation activities. A higher WTP was observed amongst households with higher vulnerability (high shocks value, low asset value and those in the poorest wealth categories) implying that they are more willing to contribute for forest conservation.Originality/valueWhile emerging literature on WTP for forest conservation is growing, few studies have paid attention on the influence of forest dependence on WTP for forest conservation. There are limited studies on use of in-kind contribution as a payment vehicle for WTP. The study's findings show a high WTP in form of labour suggesting the importance of embracing in-kind contribution as a mechanism of supporting forest conservation in contexts of developing countries.

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Section: Resultsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Understanding the nexus between forest dependence and willingness to pay for forest conservation: case of forest dependent households in Kenya

Waruingi

Ateka

Mbeche

et al. 2022

FER

Self Cite

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“…This indicates that supporting the uptake of varieties with longer shelf live would complement initiatives seeking to scale up cold storage infrastructure and in the long‐term enhance smallholder access to markets. Second, Bomet is further away from the main potato market in Nairobi, meaning that the demand for the produce is lower compared with Nyandarua (see also Ateka, Onono‐Okelo, & Etyang, 2021; Chamberlin & Jayne, 2013; van der Lee et al, 2020). This could explain the behavior of farmers to store potato as they wait for market opportunities.…”

Section: Resultsmentioning

confidence: 99%

“…This may be because they are able to appreciate the need for storage as a mechanism for arbitrage. Education enhances the ability of farmers to acquire, synthesize, and respond to information, thereby increasing the probability of adoption of an innovation (Ateka, Onono‐Okelo, & Etyang, 2021). The results also show that the intention to store declines with age of the household head.…”

Section: Resultsmentioning

confidence: 99%

To sell or store? Assessing smallholder farmers' willingness to pay for potato cold storage in Kenya

Ateka

Mbeche

2022

Food and Energy Security

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Storage of food commodities for some time after harvest can play an important role in alleviating the downside of price fluctuations in developing countries.While storage can offer smallholder farmers substantial inter-temporal arbitrage opportunities, existing evidence shows that many farmers in developing countries store little of their harvest. Using a cross sectional survey of 502 households in Nyandarua and Bomet Counties of Kenya, this paper assessed smallholder farmers' willingness to pay (WTP) for cold storage and compares their WTP with the arbitrage opportunities. Our results reveal that the storage of potato was generally limited with only 26% storing in the season preceding the study. Using a hypothetical scenario with double-bounded contingent valuation formats, our findings show that a considerable proportion of households (70.7%) were willing to rent cold storage facilities. The WTP for storing a 90 kg bag of Shangi, a common variety with a short shelf life (1 month) was Kenya shillings (KES) 104 (1.16/ kg/month) compared KES 96.4 (1.07/kg/month) for the Unica variety (slightly longer shelf life). The probit model results show that gender (being female), and transaction costs associated with access to markets (e.g., geographical location and distance to the road) were positively associated with WTP. Furthermore, household endowment, reflected in household expenditure, income and level of potato commercialization had a positive influence on WTP to store. In addition, institutional characteristics of collective action, previous experience with storage and use of certified seed (often associated with extension) enhanced households WTP for potato storage. The results on potato prices over a 5-year period (2014)(2015)(2016)(2017)(2018)(2019) show that seasonal price gaps were higher than the estimated WTP, suggesting that potato storage could be economically viable. These findings have significant policy implications not only for commodities whose harvest is perishable and season bound (e.g., vegetables, fruits) where arbitrage may offer price stabilization.

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“…The results also reveal that the formal marketing systems (led by KTDA) dominate, accounting for 63.6% of the tea sales among the farmers. The rest of the tea sales (36%) are organised through alternative channels (ATMCs), which are largely dominated by middlemen who buy the tea harvests at farm gate or roadside spot markets (Ateka et al 2018(Ateka et al , 2021. A county dummy is included in the analysis to account for spatial heterogeneity not captured in the regressors.…”

Section: Descriptive Summariesmentioning

confidence: 99%

Is change worth it? The effects of adopting modern agricultural inputs on household welfare in Rwanda

Nsabimana¹

2021

AFJARE

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The inverse farm size and productivity relationship (IR) is a recurring theme in the literature. However, most previous studies were undertaken within a setting of mixed cropping systems. In this article, we investigate the effect of farm size on productivity within the context of a perennial monocropping system, acute competition for farmland, frequent subdivision of farms and declining yields. We apply household survey data of smallholder tea farms in western Kenya and consider both technical efficiency (TE) and the yield per hectare as indicators of productivity. The findings show that the effect of farm size on productivity is nonlinear, with TE initially declining and then rising with farm size. The findings also demonstrate that the farm size and productivity relationship is important for perennial monocrops and that the use of robust measures of productivity is important for the IR. The findings have important implications for agricultural policy in developing countries.

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Selling at the farmgate? Role of liquidity constraints and implications for agricultural productivity

Cited by 5 publications

References 37 publications

Understanding the nexus between forest dependence and willingness to pay for forest conservation: case of forest dependent households in Kenya

Understanding the nexus between forest dependence and willingness to pay for forest conservation: case of forest dependent households in Kenya

To sell or store? Assessing smallholder farmers' willingness to pay for potato cold storage in Kenya

Is change worth it? The effects of adopting modern agricultural inputs on household welfare in Rwanda

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