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

We use a double-bounded format of contingent valuation to assess WTP for potato cold storage among smallholder farmers in Kenya. The results show that seasonal price gaps were higher than the estimated WTP suggesting that potato storage could be economically viable. AbstractStorage 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...
Source: Food and Energy Security - Category: Food Science Authors: Tags: ORIGINAL ARTICLE Source Type: research