Smallholder Farmer’s Determinant Factor for Use and Adoption Climate Information Services in Albania: A Case Study of Wheat Production in the South and East Regions of Albania

Access to an Early Warning System (EWS) is crucial for mitigating farmers' risks associated with climate shocks. Early warning system sustainability is contingent upon users' needs and their willingness to pay for climate information. This study examines the demand and willingness to pay for climate information among market-oriented farmers, along with the factors influencing it. Data were collected via a structured survey involving 200 farmers. Contingent dichotomous choice dual boundary estimation measures willingness to pay (WTP), while double-bounded regression identifies the primary determinants of the stated WTP. The research indicated that 46.7% of participants expressed a willingness to pay for climate information services (CIS), including decadal climate information (10-DCI) at 44.6%, and seasonal climate forecasts (SCF) at 45% for daily climate information (1-DCI). The findings indicate that the average willingness to pay (WTP) was 22,521.43 Lek (22.5 Euro) for SCF, 21,338.78 Lek (21.3 Euro) for 10-DCI, and 24,142.46 Lek (24.1 Euro) for 1-DCI when using socioeconomic predictors. In contrast, the WTP was 21,608.06 Lek (21.6 Euro) for SCF, 23,632.19 Lek (23.6 Euro) for 10-DCI, and 22,596.27 Lek (22.6 Euro) for 1-DCI when utilizing farm characteristics predictors. The primary determinants of willingness to pay (WTP) include age, literacy level of the farm head, farm size, income from grain production, and experience with climate shocks. The findings contribute to the establishment of a viable early warning system and inform the design of its services based on the characteristics, needs, capacities, and preferences of the identified potential users.