Agriculture Reference
In-Depth Information
Table 2.3 Probit model of explanatory variables of farmers' WTP for
compost in Kumasi
t-statistics
1
Independent variables
Regression coeff.
Standard error
7.3
Perception
0.566
0.077
Location
0.062
0.051
1.2
Gender
0.043
0.044
0.98
2.1
Education
0.178
0.067
2.0
Age
0.043
0.022
2.2
Income
0.000
0.000
Household dependency
0.078
0.043
1.8
Compost experience
0.119
0.105
1.1
2.9
Soil inputs
0.127
0.043
1
Coe
cient is significant at 5 per cent (
) and 1 per cent (
).
perceptions as related to compost, household income, level of education and
age were all significant variables that influenced WTP (Table 2.3).
As expected, a positive perception of compost implied a higher
probability of WTP for the compost. Similarly, farmers with higher income
were willing to pay more than poorer farmers. Farmers who could read and
write have a higher probability of paying for compost than those who could
not read or write. This was most likely because more educated farmers were
better informed about innovations and better understood the advantages and
disadvantages of compost. Older farmers had a lower WTP than younger
farmers, possibly due to older farmers not valuing the need to invest in the
land they were using, whereas younger farmers were more motivated to
invest in their land to realize long-term benefits. The present soil input the
farmer was using had a significant impact on his or her WTP for compost.
This was primarily because farmers used inexpensive soil fertility
improvement inputs which were familiar to them. The farmers who were not
interested in applying compost to their crops had less security on the plots
they farmed and long-term investment in soil quality was not a priority to
them.
Demand for compost in Kumasi
Demand for compost in Kumasi was estimated through WTP bids by farmers
for both the subsidized and unsubsidized compost plants. Compost produced
from Kumasi was valued at US$5 per 50 kg bag and its demand was
940 tonnes per year. Peri-urban farmers were willing to pay US$4 per 50 kg
bag, which created a difference of US$2 with the prevailing market prices.
This meant that, by sustaining demand for compost at this higher price, the
government would have to subsidize the prices by US$2, which would lead to
an explosion in demand estimated at 11,000 tonnes per year.
Although the compost plant is centrally located with respect to the urban
farming areas of Kumasi, the distances between it and the farms are still
