Determinants of Farmers’ Willingness to Pay for IoT Adoption in Rice Farming: Evidence from Malaysia

Abstract

Rice farming faces persistent challenges that constrain productivity and sustainability, underscoring the urgent need for digital innovations such as the Internet of Things (IoT). While IoT technologies offer the potential for efficiency and resilience, their adoption depends on farmers’ willingness to pay (WTP), which remains poorly understood in resource-constrained contexts. This study aimed to identify the determinants of WTP for IoT adoption by integrating farmer-related, technological, and institutional factors. A structured survey was conducted among 229 rice farmers in the Integrated Agricultural Development Area, Barat Laut Selangor, Malaysia. The findings revealed that most farmers demonstrated moderate IoT awareness, with the awareness index highlighting gaps in technical knowledge and training. The IoT readiness index recorded relatively high scores for shared infrastructure (71.8) and Internet connectivity (71.6) but lower levels for technical support (60.0) and energy supply (54.4), reflecting uneven preparedness. Logistic regression results indicated that higher-income farmers were significantly more likely to invest, with middle- and high-income groups showing 20.13% and 22.45% higher probabilities, respectively. Secure land tenure increased WTP by 3.18%, while each additional year of age reduced WTP by 0.61%. IoT infrastructural readiness raised WTP by 10.53%, and perceived ease of use increased WTP by 8.27%. However, perceived usefulness exhibited a negative marginal effect, suggesting that recognising IoT’s benefits does not necessarily translate into WTP when financial or institutional barriers persist. The findings indicate that financial support, reliable IoT infrastructure, and practical training are crucial to fostering inclusive IoT adoption and enhancing resilience in rice farming.