Smallholder Farmers' Willingness To Pay For EzyAgric Services In Uganda

Abstract

This study examined smallholder farmers' willingness to pay (WTP) for EzyAgric's digital agricultural services in Iganga District. The research had three specific objectives i.e., to assess smallholder farmers’ WTP for selected digital agricultural services on the EzyAgric App, to assess the factors influencing smallholder farmers’ WTP for digital agricultural services on the EzyAgric App and to compare EzyAgric's current commercialization models (Agrishop, Ka-Ezy, and Ezy Credit) against farmers' actual WTP. Data were collected from 76 smallholder farmers and analysed using a double-bounded contingent valuation method alongside a binary logit model estimated in Stata. Overall, 69.74% of respondents were willing to pay for at least one digital service while 30.26% were not willing to pay for any. The full-service bundle recorded the highest mean WTP (UGX 4,474.49) and the highest bid acceptance rate (60.53%), followed by crop advisory (UGX 2,144.07, 38.16%). Weather alerts and market price information attracted lower amounts (UGX 836.80 and UGX 1,247.62 respectively). The logit results identified three significant predictors of WTP. Cooperative membership had the strongest effect: members were 25.9 percentage points more likely to be willing to pay than non-members. Marital status had a negative effect, with married farmers 28.3 percentage points less likely to be willing to pay than unmarried farmers, likely reflecting competing household expenses. Prior platform use raised WTP by 22.4 percentage points suggesting that direct experience builds trust in the service's value. The comparison of EzyAgric's commercialization models against derived WTP revealed a consistent pricing value gap for its currently monetized services. Agrishop's commission structure (5-10% margin) far exceeds farmers' mean WTP of 1.54%, corresponding to a low 21.62% acceptance rate. Ezy Credit's 3% monthly interest rate is roughly 24% above farmers' mean WTP of 2.42% yielding a 24.32% acceptance rate. Ka-Ezy's flat UGX 5,000 monthly fee performed better, close to farmers' derived WTP of UGX 4,474.49, with 60.53% acceptance. In terms of payment structure, pay-per-use was the most preferred model overall (89.47%), reflecting farmers' irregular, harvest-linked cash flows. These findings suggest that EzyAgric's pricing for Agrishop and Ezy Credit is currently set above what most farmers are willing to pay likely limiting uptake despite genuine underlying demand. Meanwhile, crop advisory, market price information and weather alerts which are currently unmonetized show strong potential as new revenue streams. The study recommends that EzyAgric revisit its pricing structures, prioritize pay-per-use and bundled pricing models and target cooperative members as an entry point for scaling adoption.