Factors affecting farmers' adoption of and willingness to pay for biodegradable mulch films in China

Abstract

Biodegradable mulch films (BDMs) technology is an environmentally-friendly substitute to traditional plastic mulch films in agricultural production. Given the high price and it is new to the market, it is not easy for farmers to accept and adopt it. This paper aims to explore the key factors affecting farmers’ adoption of and willingness to pay for BDMs to understand the complex process of farmers’ decision-making. This paper employs a double hurdle model to explore the multi-stage decision-making process in the adoption of BDMs using the sample of 1247 observations from Yunnan province China, where two mechanisms of decision-making (i.e., direct rejection of technology and lack of resources) were used to capture zero willingness to pay (WTP) for BDMs. The results indicate the two-stage decision-making process, where the role of technology-specific characteristics is more important than adopter-specific characteristics in the adoption of BDMs in China – training for understanding and using the technology has a positive effect on both the adoption and willingness to pay. The paper is the first attempt that empirically analyses the determinants of farmers’ WTP for BDMs. It contributes to the literature on adoption analysis by 1) considering farmers’ adoption choices as a two-step process by using a hurdle model and 2) addressing the importance of technology-specific characteristics on farmers’ WTP for BDMs. Understanding the role of factors on different stages of farmers’ decision-making could assist policymakers in designing programs, specifically tackling difficulties confronting farmers at different stages of decision-making.