Poster Topical Area: Community and Public Health Nutrition
Poster Board Number: 70
This study estimates willingness to pay (WTP) for hermetic grain storage bags in a sample of 116 very low-income farmers, about half of whom had attended bag-use demonstrations designed to demonstrate how these bags prevent damage from mold and insects.
WTP was measured using Becker-DeGroot-Marschak (BDM) auctions, accompanied by a survey regarding respondents' education, household wealth and knowledge about aflatoxins that are released when mold is allowed to grow on the grain.
We found a mean WTP of 311 Kwacha ($0.42) for one bag, well below the market price around 750 Kwacha, and no significant association between a respondent's WTP and their attendance at bag-use demonstrations, aflatoxin knowledge or education and wealth. Only 4 of 116 auction participants would now purchase a bag at its current market price, and their mean willingness to pay is less than half of that price (about $0.42). At current market prices, we found no evidence that these bags would be commercially marketable in these communities, even after bag-use demonstrations. We find suggestive evidence that farmers who had observed at least one of the bag-use demonstrations had a higher demand for bags, as revealed by greater participation rates and higher bids in the auction, but these differences were not statistically significant.
We conclude that commercial sales of hermetic bags in this population are unlikely to succeed without large subsidies unless there is a large shift in demand. Subsidized distribution remains the primary channel by which this innovation can reach the poorest farmers in Malawi. A systematic review of the literature suggests that commercial sales of hermetic bags may be possible for buyers in areas of less extreme poverty, where households are more able to make such investments in pursuit of longer-term payoffs in food safety and storage.
This report was made possible by the generous support of the American people through the support of the Office of Food for Peace, Bureau for Democracy, Conflict and Humanitarian Assistance, United States Agency for International Development (USAID) under terms of Cooperative Agreements No. AID-FFP-A-14-00006 and AID-OAA-A-15-00019, through the United in Building and Advancing Life Expectations Project (UBALE), managed by Catholic Relief Services (CRS).