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Global fertilizer crisis and willingness to pay for chemical fertilizers: empirical evidence from Nepal

Ganesh Thapa (Wisconsin Department of Natural Resources, Bureau of Environmental Analysis and Sustainability, Madison, Wisconsin, USA)
Yam Kanta Gaihre (International Fertilizer Development Center, Muscle Shoals, Alabama, USA)
Dyutiman Choudhary (CIMMYT, Kathmandu, Nepal)

Journal of Agribusiness in Developing and Emerging Economies

ISSN: 2044-0839

Article publication date: 16 February 2024

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Abstract

Purpose

The purpose of the study is to estimate the willingness to pay (WTP) for major chemical fertilizers and revisit the fertilizer subsidy policy in Nepal.

Design/methodology/approach

We surveyed 619 households from six districts and assessed farmers’ WTP for urea, diammonium phosphate (DAP) and muriate of potash (MOP) during the fertilizer crisis. Our study elicited the WTP for fertilizers when fertilizers were not available on the market. A modified payment card approach was used to elicit farmers’ WTP.

Findings

The study found that farmers who buy fertilizer from agrodealers, buy from gray markets, have bank accounts, are willing to take a risk, have strong or medium economic conditions and incur higher travel costs have a higher WTP for fertilizers. Farmers in sampled areas, on average, are willing to pay 31 percent more for urea, 13 percent more for DAP and 19 percent more for MOP than the government recommended fertilizer price.

Research limitations/implications

The design of the payment card and the estimation techniques used to fit the valuation function are likely to influence WTP.

Originality/value

Overall, literature on households’ WTP for fertilizers in developing countries is scarce. Our study contributes to the knowledge of WTP for fertilizers.

Keywords

Acknowledgements

The authors acknowledge USA Agency for International Development (USAID) for funding this research through ‘Feed the Future Nepal Seed and Fertilizer Project (No: AID-367-IO-16–00001). The authors thank Dr. Ashok Mishra--the editor of the journal for all his helpful comments and suggestions. The opinions expressed are those of the authors and not those of the USAID or the Government of Nepal or Wisconsin Department of Natural Resources.

This research was conducted when Ganesh Thapa was affiliated with CIMMYT, Kathmandu, Nepal.

Citation

Thapa, G., Gaihre, Y.K. and Choudhary, D. (2024), "Global fertilizer crisis and willingness to pay for chemical fertilizers: empirical evidence from Nepal", Journal of Agribusiness in Developing and Emerging Economies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JADEE-11-2023-0278

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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