Farmers’ Willingness To Pay For Soil And Water Conservation Practice In Debre Libanos District, Oromia National Regional State Of Ethiopia: A Contingent Valuation Approach

Abstract

At present, soil and water erosion are the most serious environmental problems in Ethiopia which are affecting the livelihood of the rural farmers and the economy of the country at all. In order to fight this dangerous soil and water erosion problems, active participation of the local communities through labor-day contribution is very important. Chary of this fact, identifying the determinants of farmers’ willingness to pay is an important issue for policymakers in order to have an effective and sustainable conservation programs. Therefore, this study was initiated with the objective of accessing the determinants of households’ willingness to pay for soil and water conservation practice and to estimate the aggregate Benefit gain from the proposed program in DebreLibanos woreda. By using double bounded contingent valuation survey with an open-ended follow up question was conducted on 335 randomly selected rural households’ from three Kebeles to elicit their preferences for soil and water conservation. The collected data were analyzed using descriptive statistics and econometric model. Inferential statistics such as t-test and chi-square test were used to see the significant mean/percentage difference between willing and non-willing households in terms of the hypothesized continuous and dummy variables, respectively. In the econometric part, biprobit model was used to identify the determinants of households’ willingness to pay for soil and water conservation and to compute the mean willingness to pay. The results of the biprobit model shows that Sex of households, total livestock holding, Income of households, credit utilization and frequency of extension contact have a positive and statistically significant effect on households’ willingness to pay for soil and water conservation, while dependency ratio, off-farm participation and initial starting bid have a negative and significant effect on WTP. Hence, to overcoming those negative factors and encouraging the positive factors can enhance farmers’ willingness to pay for soil and water conservation practice. The study also show that the mean willingness to pay estimated from the Double Bounded Dichotomous Choice and open ended formats was 99.51 and 60.062 Labor days per annum, respectively. The respective total aggregate value of soil and water conservation in the study area varies from 1,120,829.822 person days per annum (79,353,938.44 ETB) and 736,840.9117 person days per annum (47,894,659.26 ETB), from double bound Contingent Valuation Method. Therefore, policy and program intervention designed to address soil and water erosion problems in the study area have needed to take in to account these characteristic