Determinants of farmers’ willingness to pay for irrigation improvements in Northcentral Ethiopia

Abstract

Investing in agricultural water management by improving irrigation schemes helps to establish climate-resilient and sustainable agri-food systems, thus contributing to sustainable poverty reduction. The purpose of this study was to identify the determinants of farmers’ willingness to pay (WTP) for irrigation water improvements in Northcentral Ethiopia. Primary data collected from a random sample of 132 households were analyzed using the double-bounded contingent valuation method and binary logit regression model to identify what determines farmers’ WTP for irrigation improvement. The findings show that farmers’ mean WTP for irrigation water improvements is 141.60 Birr/ha/year (2.50 USD/ha/year). The results of bivariate Probit model revealed that crop type, education, relative location to the irrigation scheme, irrigated plot size, and perceived drought risk statistically and positively determine farmers’ WTP for irrigation water improvement. These findings offer valuable policy implications on how best to guide practical agricaltural water management. Policy interventions aimed at enhancing farmers' behavior, awareness, and perception of drought-related issues, while also promoting cash crop production, are likely to drive more farmers towards a positive WTP for irrigation water improvement.