Are farmers willing to pay for drought tolerant rice? Evidence from Bihar and other policy research priorities for cereal farming systems in South Asia

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Recent efforts to develop rice cultivars with drought-tolerance (DT) traits have resulted in the release of several varieties that demonstrate significant resilience to drought stresses. In this paper, we employ discrete choice experiments to examine farmers’ preferences for DT traits and explore heterogeneity in these preferences using primary data collected in rural Bihar, India. Using different modeling approaches to capture preference heterogeneity, our results show that farmers value the reduction in yield variability offered by DT cultivars, but are willing to pay even more for rice seed that offers yield advantages even under normal conditions. We demonstrate that risk aversion and loss aversion are important components of farmer utility, as these behavioral parameters not only significantly influence choice probabilities but also affect the way farmers value different seed attributes.

At this seminar, IFPRI's Patrick Ward and David Spielman discussed their recent study examining farmers’ willingness to pay for drought tolerant rice in three drought-prone districts in rural Bihar, India. Their findings shed light on how the gains from such technologies might be distributed among farmers, and have implications for future public and private sector R&D investments in drought tolerant technologies.