Abstract:
The common understanding by the research community is that farmers like to adopt highyielding varieties. While this is true in general, we often see that some high-yielding varieties
are not accepted by farmers. The reasons for such can be many. In this study, an attempt is
made to verify whether there are any other traits that farmers seek in a paddy variety. We select
several traits including those related to yield and production aspects as well as ultimate
consumer preferences, and assess their relative importance by way of willingness to pay. This is
achieved by estimating a Hedonic Pricing model. We further hypothesise that there are spatial
relations in the willingness to pay for such traits and incorporate that into the analysis which
resulted in a Spatial Hedonic Pricing Model. Data for the study was collected by using a pretested questionnaire from 148 farmers in Kurunegala and Hambantota districts. The estimated
function confirms that there is a spatial relationship in paddy prices by a significant spatial
correlation coefficient in the order of 0.35. Therefore, the estimated marginal willingness to
pay values is corrected for the spatial correlation. These estimates provide us insights on
characteristics other than yield such as empty seed percentage of seed paddy, disease resistance,
and demand conditions of the ultimate consumer(types of rice), that farmers consider in
choosing paddy varieties.
