Eliciting farmer preferences for rice varietal trait improvements using an experimental methodology based on investment games

Abstract

Rice value chains are changing rapidly in Asia, partly due to changing consumption patterns, and also as a result of increasingly stringent quality standards imposed on producers. Rice farmers and other value chain actors must now consider rice varieties that are suitable for unique production environments and processing scenarios. Rice breeders face similar trade-offs, as demand for their products (genetics or new varieties of rice) is derived from farmers’ and other value chain actors’ (including consumers’) demand for rice varieties and traits. Ultimately, breeders need to make informed decisions about where to invest and how to allocate increasingly scarce research and development resources. To facilitate successful adoption, it is important that farmers’ preferences and needs are incorporated in the early phases of breeding research to make sure that rice varieties developed are suitable to local conditions and at the same time respond to market requirements. This thesis utilises an innovative experimental Investment Game Application (IGA), which is a newly developed application for eliciting preferences for rice variety traits. The game is designed to simulate an investment market in which farmers can participate in investment decisions for public rice breeding programs. In the IGA, farmers are asked to identify a replacement variety and the traits of this variety that they want to see improved. Farmers are provided with an endowment fund, which they are asked to use to invest in trait improvements. Therefore, using data from the investment games conducted in February 2016 in Nueva Ecija, Philippines, this thesis analyses farmer preferences for rice varietal trait improvements (VTIs). A total of 122 rice-farming households participated in the experiment, with both the husband and wife taking part in activities. The thesis consists of three core chapters, which specifically analyse the following: (i) farmers’ investment preferences for VTIs and the factors that influence these preferences; (ii) farmers’ heterogeneity in preferences for VTIs using a latent class cluster analysis; and (iii) gender and intrahousehold dynamics in the decision-making process regarding investment in VTIs. The results from the analysis of farmers’ investment preferences suggest that Filipino farmers prioritize investment in stress tolerance traits such as lodging tolerance, and disease and insect resistance. This is perhaps not surprising, because, on average, the replacement variety selected for improvement is already accepted in the market, i.e. it has the grain quality traits that Filipino consumers prefer (long and slender). On the other hand, the factors that influence farmers’ decisions to invest in VTIs are related to the cropping season, variety type, and access to land. Filipino rice farmers have significant heterogeneity in investment preferences; with a latent class cluster analysis identifying four distinct farmer segments each with unique preferences for the VTIs. When gender and intrahousehold dynamics in preferences are accounted for in the analysis, results suggest that the replacement variety selected individually and jointly by the couples is the same for most of the household-respondents. Moreover, the wife has more influence on the household’s choice of VTIs when she works on-farm, and/or when she is considering the impact of VTI investment decisions on the household’s future wellbeing. The results of the study can guide breeders and donors to develop more resource efficient and client-oriented rice-breeding programs. Moreover, the novel approach of the methodology can transform the way farmer preferences for variety traits are elicited and can provide an opportunity for farmers to be truly involved in the agricultural research process through participation in resource allocation and priority-setting activities.