Factors Influencing Farmers’ Willingness to Pay for NPK Fertilizer in Specialty Coffee: Insights from Pagar Alam, Indonesia

Robusta coffee cultivation in Pagar Alam City has not been carried out optimally because most farmers do not practice precision farming patterns in the use of production inputs to increase coffee plant productivity, including the use of unsubsidised coffee-specific fertilisers. In order to be accepted by farmers, fertiliser companies must pay attention to the willingness to pay of farmers for these fertilisers. For this reason, the study aims to: (1) determine farmer perceptions of nutrient content, ease of use and quality of fertiliser, (2) determine the value of farmers’ willingness to pay for unsubsidised NPK fertiliser for coffee in Pagar Alam City, and (3) determine the effect of nutrient content, ease of use and quality of fertiliser and other factors on farmers' WTP in Pagar Alam City. The research location was determined purposively with the consideration that Pagar Alam City is one of the highest coffee producing areas in Indonesia. A total of 100 coffee farmers were used as samples and interviewed using a prepared questionnaire. Data on farmers' willingness to pay was obtained by using the contingent valuation method (CVM). Descriptive analysis was used to determine the level of farmers' perception of nutrient content, ease of use and quality of fertiliser. Multiple linear regression methods was used to analyze the effect of nutrient content, ease of use and fertiliser quality and other factors on farmers' WTP. The results showed that the average value of farmers' WTP for unsubsidised NPK fertiliser for coffee was IDR 11,160 per kg which is lower than the price of unsubsidised NPK fertiliser commonly paid by coffee farmers. The study found that fertiliser quality, ease of fertiliser uses and fertiliser nutrient content, farm income level, land size, age, farming experience, household size and farmer membership status in farmer groups significantly affect the farmers’ WTP.