Determinants of Smallholder Rice Farmers’ Willingness-to-Pay for Private Extension Services in Liberia: The Case of Gibi District

Abstract

Globally, many policymakers and extension professionals have advocated for the privatization of extension services in order to reduce the burden of funding faced by the state as well as to adequately respond to the low productivity problem of farmers as they endeavor to tackle productivity problems. This study assessed willingness-to-pay (WTP) for private extension services by farmers and identified the determinants of their WTP using Gibi District of Liberia as a case study. A multistage sampling technique was used in selecting 296 smallholder rice farmers in the district while the double-bounded dichotomous choice contingent valuation method was used to elicit maximum WTP value for farmers. Descriptive statistics were computed and the double-bounded logit model used to analyze the data. The findings revealed that 78.7% of the rice farmers were willing to pay for privatized extension services and on average, a farmer was willing to pay US$11.21 per farm visit, almost twice the average daily wage rate of a skilled worker in Liberia. The results from the model showed that WTP was significantly positively influenced by the household head’s age, years of schooling, household size, annual income, and distance to extension service provider. The study recommends that the Liberian government and its development partners should encourage the private sector to invest more in extension services to take advantage of the relatively high farmers’ WTP and effective demand. In addition, the government should design and implement programs that reduce transaction costs in addition to increasing farmers’ income in order to enhance their capacity to pay for privatized extension services.