Farmers' willingness to pay for hermetic storage bags: The effects of training and free trial

Abstract

Maize is a staple food for smallholder farmers in Africa, but poor postharvest management leads to high grain losses, contributing to food insecurity. Improved on-farm storage such as hermetic storage bags can reduce these losses, yet their adoption remains low. Full one-off subsidies can be an effective development policy to enhance technology adoption. However, policymakers are often opposed to such subsidies, arguing that it lowers willingness to pay (WTP) once the subsidy ends and thereby constrains the future market. Using the Becker-DeGroot-Marschak (BDM) mechanism to investigate WTP and building on a prior randomized control trial among smallholders in Tanzania, this study analyzes how prior free distribution influences long-term WTP for hermetic storage bags (six years later). Additionally, we analyze how offering a deferred payment option influences farmers’ WTP for hermetic storage bags. We find that the prior provision of free hermetic storage bags had decreased WTP. As an alternative intervention, we show that providing the opportunity to pay later increases WTP as compared to immediate payment. The study highlights that free technology provision may reduce future market engagement but a pay later option can be considered as a valuable policy tool for quick technology dissemination.