DETERMINANTS OF HOUSEHOLDS’ WILLINGNESS TO PAY FOR SOIL CONSERVATION ON COMMUNAL LANDS IN RAYA KOBO WOREDA, NORTH WOLLO ZONE, ETHIOPIA

Abstract

Currently, soil erosion is one of the most serious environmental problems in Ethiopia which are affecting the livelihood of the rural farmers. In order to combat this critical soil erosion problem, active participation of the local communities through labor-day contribution is vital. Cognizant of this fact, identifying the determinants of farmers’ willingness to pay (WTP) 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 examining the determinants of households’ willingness to pay for soil conservation practice on communal lands and to estimate the aggregate welfare gain of the proposed program in Raya Kobo Woreda. A multistage sampling technique was employed to select the target respondents. Double bounded contingent valuation survey with an open-ended follow up question was conducted on 245 randomly selected rural households’ to elicit their preferences for communal land soil conservation. The collected data were analyzed using descriptive and inferential 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, bivariate probit model was used to identify the determinants of households’ willingness to pay for soil conservation on communal lands and to compute the mean willingness to pay. The results of the bivariate probit model shows that size of total livestock holding, perception of communal land soil erosion problem, credit utilization, frequency of extension contact and farm size near to communal land have a positive and statistically significant effect on households’ willingness to pay for communal land soil conservation, while dependency ratio, migration, participation in off-farm activities and initial starting bid have a negative and significant effect on WTP. Hence, overcoming those negative factors and encouraging the positive factors can enhance farmers’ willingness to pay for communal land soil conservation practice. For instance, the positive significant effect of frequency of extension contact infers the need of intervention to enhance the frequency of farmers contact with development agents. Besides, migration is found to be one of the hindering factors for willingness to pay. The mean willingness to pay result from the double bounded format revealed that the sampled households are willing to contribute a mean of 47.526 labor-days per year. Besides, the aggregate benefit that results for the community of the study area by conserving the communal lands soil was estimated to be 2,262,386 .83 labor days per year which is equivalent to 135,743,209.8 birr per year. The estimated values are indicative of the WTP potent