Estimating the demand for municipal waste compost via farmersÕ willingness-to-pay in Ghana G. Danso a, * , P. Drechsel a , S. Fialor b,1 , M. Giordano c,2 a International Water Management Institute, PMB CT 112, Accra, Ghana b Department of Agricultural Economics and Farm Management, Faculty of Agriculture, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana c International Water Management Institute, P.O. Box 2075, Colombo, Sri Lanka Accepted 27 September 2005 Available online 13 December 2005 Abstract This paper has its primary focus on the analysis of perceptions and willingness-to-pay (WTP) for composted municipal solid and fae- cal waste among urban and peri-urban farmers and other potential compost users in Ghana. Participatory rural appraisal and contingent valuation methods (CVM) were used for the demand analysis. Most respondents were clear and firm in their responses to the principal question about WTP for compost, as well as in giving their views and perceptions about issues involved in demand for compost. The probit analysis proved valuable in highlighting variables, which explain variations in the WTP. The WTP analysis allowed the quanti- fication of the compost demand under different scenarios of subsidized and non-subsidized compost production, with due allowance for a local reference price to cover compost station operating costs. The analysis revealed that the effective demand for compost for agricul- tural purposes is marginal and limited by farmersÕ transport costs. Only through the additional consideration of the demand of the con- struction sector can about 25% of the organic waste produced in GhanaÕs capital, Accra, be transformed and utilized. Public subsidies appear necessary and could be generated through savings in transport and disposal. Without subsidies, the challenge for an increased agricultural use is how to produce a low-cost but nutrient-rich compost, which can compete with abundant and cheap poultry manure and still achieve the price to maintain a compost station. The experience in Ghana shows that this is hardly possible except through pri- vate–public partnerships. Ó 2005 Elsevier Ltd. All rights reserved. 1. Background In developing countries, especially in Sub-Saharan Africa, rapid urbanization is outpacing the provision of food, shelter and sanitation. In a country like Ghana, the sanitation challenge can best be described by the fact that in all major cities, 50–75% of the municipal budget is used to tackle the persistently increasing waste generation while related revenues cannot pay for the cost incurred in waste management (Danso et al., 2004). The idea of reducing the volume of waste through composting for the benefit of both the municipality and farmers is not new (Drechsel and Kunze, 2001), but African success stories are limited to small and often short-lived initiatives without any major impact on the municipal waste management (Furedy, 2002). Based on a material flow analysis carried out in Kumasi by Leitzinger (2001), it was recommended that options for organic waste composting should be explored at the municipal level. The International Water Manage- ment Institute (IWMI) 3 in collaboration with several local 0956-053X/$ - see front matter Ó 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.wasman.2005.09.021 * Corresponding author. Tel.: +233 21 784 753; fax: +233 21 784 752. E-mail addresses: g.danso@cgiar.org (G. Danso), p.drechsel@cgiar. org (P. Drechsel), sfialor@hotmail.com (S. Fialor), mark.giordano@ cgiar.org (M. Giordano). 1 Tel.: +233 20 8168438. 2 Tel.: +94 11278740/2784080; fax: +94 12786854. 3 Originally, the International Board for Soil Research and Management (IBSRAM) started the project in 2000. IBSRAM projects were incorpo- rated into IWMI in 2001. www.elsevier.com/locate/wasman Waste Management 26 (2006) 1400–1409