Journal of Crop Improvement, 29:131–158, 2015
Copyright © Taylor & Francis Group, LLC
ISSN: 1542-7528 print/1542-7536 online
Farmer Preferences on Seed Purchase Timing:
Some Evidence From Nigeria
HIROYUKI TAKESHIMA1 and LATHA NAGARAJAN2,3 1International Food Policy Research Institute (IFPRI), Washington, DC, USA 2International Fertilizer Development Center (IFDC), Washington, DC, USA 3Rutgers University, New Brunswick, New Jersey, USA
Timely availability of seeds, typically immediately before the planting season, is considered one of the important factors for rapid adoption of quality seeds of improved varieties in Sub-Saharan
African (SSA) countries. Empirical information on whether farmers are willing to pay (WTP) premium for obtaining seeds at their desired timing can help in assessing the feasibility of public sector support for timely delivery of quality seeds of improved varieties.
This study estimates how farmers’ WTP for seed varies depending on the timing of the purchase using both revealed preference (RP) and stated preference (SP) models. The results indicate that WTP varies with the timing. Low-income farmers in Nigeria may prefer to pay premium price for cowpea seeds if those seeds can be made available closer to the planting season, while most high-income farmers may pay the same price regardless of the timing. Implications for future research needs are discussed.
KEYWORDS cowpea, maize, revealed preference, rice, stated preference, willingness to pay
Timely availability of inputs highly determines the agricultural productivity in rural Sub-Saharan Africa (SSA), where production relies heavily on rainfall
Received 7 September 2014; accepted 13 October 2014.
Address correspondence to Hiroyuki Takeshima at International Food Policy Research
Institute (IFPRI), 2033 K Street, NW, Washington, DC 20006, USA. E-mail: H.Takeshima@ cgiar.org
Color versions of one or more of the figures in the article can be found online at www. tandfonline.com/wcim. 131 132 H. Takeshima and L. Nagarajan and traditional technologies. Demand for seeds may be high particularly at planting time. Farmers tend to wait until planting time to select seeds from their own stock (Wright et al. 1994; Lewis and Mulvany 1997; Rice et al. 1998) or to decide whether to buy seed from off-farm sources (Griffiths 1994). If the market does exist, seeds are bought at higher price around the planting time than other times (Tripp and Rohrbach 2001). Market, however, often does not exist for such timely supply of quality seeds of improved varieties in much of rural SSA. The private sector regards it generally unprofitable to deliver seeds in most rural areas even at planting time, whereas public sector seldom has sufficient capacity.
Such missing market for timely availability partly limits the use of quality seeds of improved varieties in countries like Nigeria (Akulumuka et al. 2001;
Okoko et al. 2008). Quality seeds of improved varieties in Nigeria are distributed by both private companies and public institutions (state government,
Agricultural Development Projects, farmer service centers, or cooperatives).
Due mainly to insufficient financial capacity, the institutions responsible for timely delivery of agricultural inputs in Nigeria are ineffective (Manyong et al. 2003). Quality seeds of improved varieties are often made available to farmers too early (Personal communication with National Agricultural Seeds
Council of Nigeria) or too late (Longtau 2003; Saka et al. 2005; Omonona 2006; Odoemenem and Obinne 2010).
Farmers’ WTP for seeds may generally rise near the planting time because of the risk of seed loss during storage. Seed purchased ahead of planting time may be lost during storage because of farmers’ lack of resources for appropriate storage (Scott et al. 2003; Rohrbach and Kiala 2007;
Wambugu et al. 2009) or their vulnerability to theft and civil conflict (Longley et al. 2001).
Such rise in WTP may be particularly common for lower income farmers because they face various additional constraints not relevant for wealthier farmers. While wealthier farmers often have surplus grain in storage, usable as seed at planting time (Almekinders and Louwaars 2002), low-income households tend to lack such surplus and often rely on any seeds accessible at planting time (Almekinders 2001). Wealthier farmers may be able to exploit a rise in seed prices at planting time by purchasing seeds in advance at lower prices, and then reselling some of these at planting time for a higher price. Low-income farmers, however, may find such opportunities impractical, either because it is too difficult for them to acquire surplus seed stocks for resale purpose, or because they may face higher transaction costs because of their poor access to market information. Furthermore, liquidity constraints may be common for low-income farmers and can affect their WTP depending on their need to purchase other goods besides seeds (for example, fertilizer) and uncertainties associated with such needs.
Rise in WTP may also be more common for Nigeria’s major staple crops like cowpea, which is subject to risks of loss during storage through pests
Farmer Preferences on Seed Purchase Timing 133 (Taiwo, 1998; de Boef and Bishaw 2008). Materials like airtight containers and agrochemicals required for storing cowpea seed (Dugje et al. 2009) are often inaccessible to farmers, and significant loss is often unpreventable even with agrochemicals. Other major staple crops in Nigeria like rice or maize, on the other hand, may be less susceptible to risk of such storage loss. Maize seeds in Nigeria, in particular, are effectively preserved during storage by the use of fumigation (Olakojo and Akinlosotu 2004; Adejumo and Raji 2007).
Demand for timely availability of seed may thus vary across farmers with different income levels and crops.
This study analyzes how Nigerian farmers’ willingness to pay (WTP) for cowpea, rice, and maize seeds varies with the purchase timing (number of months before the planting date). Timing of availability is considered one of the attributes of each seed, from which farmers derive utility. We apply both revealed preference (RP) hedonic price model and stated preference (SP) choice experiment model for the estimation of WTP. Both models are appropriate for assessing WTP for the attributes of commodities, for which no direct market exists. Market is simply absent for seed at certain times (for which SP choice experiment model is used) or, while seed market exists, timing is not directly priced (where RP hedonic price model is used). Using the two models adds robustness to the estimated results and their implications.