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Finding missing markets (and a disturbing epilogue) : evidence from an export crop adoption and marketing intervention in Kenya
Abstract
Summary This study tests the null hypothesis that it is sufficient to interview only the household head to obtain accurate information on household income. Results show that using a husband's estimate of his wife's income does not produce statistically reliable results for poverty analysis. Estimates of the wife's income provided by the husband and wife are in agreement in only 6% of households. While limiting interviews to one person has the advantage of reducing the time and expense of household surveys, this appears detrimental in terms of accuracy, and may lead to incorrect conclusions on the determinants of poverty.
... Omiti et al. (2009) add that poor market access has resulted in consumption of up to 50% of agricultural produce by farmers in rural areas. While Ashraf et al. (2009) blame poor market access by smallholder farmers on inadequate marketing extension services, Karina and Mwaniki (2011) attribute poor export markets access to poor quality assurance. Thus, describing the majority of rural farmers as selling farm produce at 'farm gate', Omiti et al. (2009) advice smallholder farmers to explore opportunities in sale of farm produce in urban and export markets, to organise themselves into marketing groups, and to enter into contract farming and economies of scale arrangements. ...
... Africa is known to export most of its agricultural produce, including cocoa, coffee and tea, in raw form and to import the same crops after agro-processing. Consequently, seemingly two opposing lines of thought have emerged with respect to agricultural enterprise, with one group favouring export of produce to foreign markets in raw form (Ashraf et al., 2009;Karina & Mwaniki, 2011;Omiti et al., 2009) and another group favouring development of agroprocessing industries in Africa and export of agricultural produce after value addition (Muma, 2016). Thus while Ashraf et al. (2009) extol smallholder farmers to export farm produce to lucrative international markets to increase earnings, Muma (2016) Knowledge in produce marketing strategies is considered crucial to commercialisation of agriculture. ...
... Consequently, seemingly two opposing lines of thought have emerged with respect to agricultural enterprise, with one group favouring export of produce to foreign markets in raw form (Ashraf et al., 2009;Karina & Mwaniki, 2011;Omiti et al., 2009) and another group favouring development of agroprocessing industries in Africa and export of agricultural produce after value addition (Muma, 2016). Thus while Ashraf et al. (2009) extol smallholder farmers to export farm produce to lucrative international markets to increase earnings, Muma (2016) Knowledge in produce marketing strategies is considered crucial to commercialisation of agriculture. Stating that the sugar industry has faced increased competition due to global trade liberalisation, Chisanga et al. (2014) as quoted in Mbithi et al. (2015) add that "despite increase in sales by 8.6% from new markets, increase in competition and saturation of markets has made focusing efforts solely on new markets insufficient to improve market performance". ...
Objective: The objective of this study was to investigate influence of farmer marketing strategies and water users associations on performance of smallholder irrigation projects, and was aimed at enhancing smallholder irrigation project outcome success in Migori County, Kenya. Theoretical Framework: The study was anchored on market orientation theory by Kohli and Jaworski (1990) and Narver and Slater (1990). This is because market orientation explains relationship between markets and organisational behaviour (Gotteland et al., 2007). Kohli and Jaworski (1990) explain customer needs, market competition and usefulness of a product as interacting to influence its marketability. Method: Using cross-sectional and correlational research design, the study collected data from 341 farmers out of a target population of 2815 in 15 smallholder irrigation projects in Migori County using a 5-Point Likert Scale questionnaire. The data was analysed using descriptive and inferential statistics. Results and Discussion: The results show that farmer marketing strategies accounts for 64.1% of findings in the model, with group marketing having the most significant influence on performance. The results also show that introduction of water users associations increases coefficient of determination (Δr2) by + 0.121, indicating a positive modest moderating influence on the relationship between predictor and dependent variables. Research Implications: The study confirms that farmer marketing strategies influence performance of smallholder irrigation projects, and that water users associations positively but modestly influence the relationship. Empirically, the study highlights the importance of cooperative societies, agro-processing and irrigation management transfer in smallholder irrigation. Originality/Value: This study adds to empirical data on farmer marketing strategies, water users associations and smallholder irrigation. In highlighting these aspects, the findings have potential to benefit development agencies in smallholder irrigation.
... Smallholder participation in exports is popularized by different contract schemes. Farmers must secure the capital investment and infrastructure such as irrigation, machinery, and postharvest technologies to secure a contract (Ashraf et al., 2009;Dolan & Humphrey, 2000;Gichuki et al., 2020;Tallontire et al., 2014). This acts as an assurance of capacity to meet year-round demand and strict market requirements regarding quality (Rao et al., 2012). ...
... Like export production, urban and supermarket channels are governed by contract schemes and requires capital investment and infrastructure to produce throughout the year. The only difference is that the risk is lower compared to the export markets (Ashraf et al., 2009;Neven et al., 2009). ...
... The transition from subsistence farming to commercialized supermarkets or exports markets depends on the ability of productive assets, quality requirements and securing a contract with the buyers (Ashraf et al., 2009;Fibaek, 2021;Neven et al., 2009). Sometimes farmers exit if they are unable to meet markets requirements or if the returns are low. ...
... In Kenya, contract farming schemes date to the colonial period (Minot and Ngigi 2004). For farmers to participate in such contractual arrangements, they must be organized into special interest groups (Ashraf et al. 2009) commonly referred to as PMOs. Such groups have been particularly important in increasing market share among smallholder horticultural farmers, especially in export markets (Barrett et al. 2012). ...
... Dolan 2001;Swinnen, 2009, 2012). Generally, high rates of failure for contract farming are evident in Kenya (Ashraf et al. 2009;Minot and Ngigi 2004). These studies agree that certain constraints such as lack of capital, credit, information, and lack of access to land, have kept women from cash crop and contract farming. ...
... Indirectly, participation of rural households in product and labor markets provides technology and managerial spill-over effects, investment linkages, and consumption linkages that drive economic growth, inclusive development, and poverty reduction ). However, participation in a high-value market also involves additional transaction costs, such as harvesting and transport costs, group membership fees, and the opportunity cost of time spent attending group meetings 4 (Ashraf et al. 2009). Subsequently, a household will participate in high-value markets if the expected benefits of participation exceed the utility of selling locally to brokers. ...
We used two-wave panel data obtained from avocado growers in Murang’a County in Kenya to examine, through the perspective of gender, the dynamics of farmers’ participation in avocado production and marketing organizations (PMOs), and test whether understanding group dynamics is important for analyzing contract farming. Using a multinomial logit (MNL) model, we identify the characteristics of men and women participating in PMOs categorized as early adopters, dis-adopters, late adopters, and non-adopters. We focus on dis-adopters and late adopters because these categories are most often ignored in the literature. Moreover, without considering the dynamics, we verify the influencing factors of PMOs by estimating a random-effects logit model that controls for unobserved heterogeneity across households. Furthermore, we estimate a sequential-choice model to test whether the process of selection into group membership affects the process of selection into contracting. Our results reveal heterogeneity with regard to household, farm, and resource characteristics across categories of farmers and between gender groups. Besides, the results reveal that group and contracting dynamics are related, and ignoring the former leads to biased estimates of the determinants of contracting dynamics. Policy efforts should focus on supporting women farmers to enhance their participation in PMOs, which ultimately affects contracting. Improving access to high-yielding avocado varieties and building capacity in orchard management would enhance women’s decision-making including group participation, contracting, and marketing. Low-cost agricultural credit may also improve women’s ownership of improved avocado trees and hence their participation in high-value markets.
... A few studies examined contracts involving several commodities (Miyata et al., 2009;Narayanan, 2014;Simmons et al., 2005) or several companies (Ragasa, Lambrecht, & Kufoalor, 2018), yet mostly without explicitly analyzing the effects of varying contract characteristics. Two exceptions are Mishra, Kumar, Joshi, and D'Souza (2016) and Ashraf, Giné, and Karlan (2009). Mishra et al. (2016) investigated effects of contracts on smallholder seed producers in Nepal, suggesting that resource-providing contracts may have larger effects than simple marketing contracts. ...
... However, in their study the number of farmers operating under the different contract types was relatively small. Ashraf et al. (2009) used a randomized controlled trial (RCT) to compare effects of contracts with and without credit in the Kenyan horticultural sector. They found that the provision of credit as part of the contract increased farmers' participation rates but had no additional effect on income. ...
... Indeed, the available literature suggests that the effects of marketing contracts are more diverse and smaller in magnitude than the effects of resource-providing contracts (Otsuka et al., 2016). Findings about positive effects of marketing contracts are often related to the vegetable sector (Andersson et al., 2015;Ashraf et al., 2009;Michelson, 2013;Rao et al., 2012), where investment requirements are low or moderate. In plantation crops -such as tea, cocoa, or oil palm -where the initial establishment costs are higher, simple marketing contracts may have smaller effects than resource-providing contracts, although a comparison under otherwise similar conditions has not been made before. ...
Smallholder farmers in developing countries often suffer from high risk and limited market access. Contract farming may improve the situation under certain conditions. Several studies analyzed effects of contracts on smallholder productivity and income with mixed results. Most existing studies focused on one particular contract scheme. Contract characteristics rarely differ within one scheme, so little is known about how different contract characteristics may influence the benefits for smallholders. Here, we address this research gap using data from oil palm farmers in Ghana who participate in different contract schemes. Some of the farmers have simple marketing contracts, while others have resource-providing contracts where the buyer also offers inputs and technical services on credit. A comparison group cultivates oil palm without any contract. Regression models that control for selection bias show that resource-providing contracts increase farmers’ input use and yield. Resource-providing contracts also incentivize higher levels of specialization and an increase in the scale of production. These effects are especially pronounced for small and medium-sized farms. In contrast, the marketing contracts have no significant effects on input use, productivity, and scale of production. The results suggest that resource-providing contracts alleviate market access constraints, while simple marketing contracts do not in this context.
... The efforts were to construct a long-term and stable community of shared interests and enhance the overall efficiency of industrial chains, thus enabling farmers, businesses, and other members of supply chains to share value chain benefits [8,9]. Different types of contracts have different influences [10][11][12][13]. Existing studies mostly analyzed the influences of sales contracts and resource-providing contracts separately or comparatively. ...
... (3) Reciprocity and interaction intensities have an indirect impact on contract renewal willingness through trust level, with indirect influence effect values of 0.168 and 0.410, respectively. 13 ...
Contract farming can reduce transaction costs and improve agricultural productivity. With the establishment of stable and effective contractual relationships, not only have agricultural products been provided with a stable market, but the standardization, refinement, and branding transformation of agricultural products can also be realized, thus further promoting the progress of agricultural modernization. The willingness of farmers to renew their contracts is a key factor in maintaining long-term, stable cooperative relationships. This research has empirically verified the impact model of tie strength between companies and farmers in contractual agriculture on the willingness of farmers to renew their contracts and revealed the working mechanism of tie strength on sustainable participation of farmers in contract farming. This study has utilized the survey data from 286 agricultural households in Inner Mongolia, China, and the method of structural equation modeling（SEM）, with the following results:(1)Interaction and reciprocity have a significant positive influence on trust. (2)Trust has a significant positive impact on farmers' willingness to renew their contracts. Also, reciprocity and interaction have an indirect impact on contract renewal willingness through trust .(3)Perception of economic value can significantly increase the contract renewal willingness of farmers and plays a mediating role between trust and contract renewal willingness.Overall, on the basis of tie strength, this research has provided a new perspective for the investigation of the sustainable stability of contract farming and empirical evidence for the sustainable development of the contract farming supply chain.
... Regarding the adoption of genetically modified cultivars, studies show that farmers' decisions are made based on several factors, such as: expected profit, availability of land, and ease of agricultural credit (Feder et al., 1985;Souza Filho et al., 2011), greater propensity to price and production risk (Abdulai & Huffman, 2005;Ashraf et al., 2009;Langyintuo & Mungoma, 2008), perception of lower production costs, reduction of pesticides and increased productivity (Almeida et al., 2015), scale of production (Abdulai et al., 2008), greater education and professional qualification (Feder et al., 1985;Lacky, 1998;Hartog et al., 2009), ability to obtain and process information, and ability to use agricultural techniques and management methods (Baron & Shane, 2008), professional experience in non-agricultural activities and exchange of information on social networks (Doye et al., 2000;Hartog et al., 2009). Studies also include the age factor, since youngers farmers have more knowledge about transgenic cultivars (Todua et al., 2017) and are more easily attracted to novelties (Anosike & Coughenour, 1990;D'Souza et al., 1993). ...
... Based on previous studies (Feder et al., 1985;Lacky, 1998;Abdulai et al., 2008;Ashraf et al., 2009;Hartog et al., 2009;Souza Filho et al., 2011;Almeida et al., 2015;Todua et al., 2017), information was gathered from producers on: age, gender, distance from farm to city, total area of property (in ha), level of education, place of residence, length of experience in the activity (in years), employed labor, property management and accounting, participation in cooperatives, access to assistance, cost control, working in bean technical groups, use of crop finance, bean planting season, planting crops, bean varieties used, area intended for bean planting, selling price of bean bag, sack yield per ha, planting techniques (no-tillage in straw), and soil analysis), types of crops on the property, percentage of income represented by beans, cultivation of other transgenic, insecticide use and whether to plant transgenic beans. ...
Transgenic beans has encountered resistance to its dissemination in the market. This study investigates whether the new cultivar of transgenic beans (BRS FC401 RMD) developed by Embrapa, in Brazil, has the potential for adoption in the producer and consumer markets. We also aim to identify factors that explain this adoption. Through semi-structured interviews, data were collected from non-probabilistic convenience samples of 37 producers and 100 bean consumers in the state of Goiás, Brazil. Data were analyzed using descriptive statistics and logistics regression models. The results indicate that producers are prone to planting the transgenic bean, and the variables that explain this preference are: total area of property (in hectares), time of experience on the activity (in years) and bean bag sale price. It was also identified that consumers are willing to include transgenic beans in their diets, and the variables explaining this decision are: amount of information received, meaning of the symbol (T), product safety and reasons for consumption. This study contributes to discussions on the adoption of transgenic cultivars, especially those related to the new BRS FC401 RMD bean, highlighting aspects that can serve as input to the next stages of development of the cultivar.
... On the other hand, studies also pointed out that the poorest farmers tended to be excluded from participation in farmer organizations due to the lack of educational and managerial skills and financial capacities to meet the quality demands of local supermarkets [10,34,41,42,44]. For example, entry and membership fees were often considered as main barriers, precluding the poors from participating in the marketing groups, and this phenomenon tended to be worse for more profitable markets (see, e.g., [2,25,33]). In addition, free-rider problems challenged collective action when members of farmer groups enjoyed group benefits without participating in all collective activities necessary to keep the group viable [14]. ...
... We chose comparison villages that (i) were close to the project areas and located in the same upazila, and (ii) shared similar residents' livelihoods and village attributes. 2 We randomly chose 50 respondents from each control village. Altogether, we collected 1000 surveys in each project, including 500 surveys from the project villages and 500 surveys from the comparison villages. ...
Background
This study examined the effect of linking small-scale women farmers to markets, referred to as community marketing, and homestead food production extension services in two districts of rural Bangladesh.
Method
We particularly focused on identifying the relationship between treatment and food security, monthly expenditure patterns, and food production and marketing by adopting a doubly robust method that mediated bias from project site selection and potential misspecification of the postulated outcome or treatment model.
Results
The main results showed that establishing community marketing sites along with extension services provided women farmers a secured marketing outlet for food production, plausibly associated with a decreased likelihood of a reduction in monthly expenditures on healthcare (12.7 percentage points), child education (19.4 percentage points), and transportation (51.5 percentage points) during the lean season. However, if farmers did not spend extra income generated from marketing on food purchases, it would be difficult to anticipate an improvement in food security.
Conclusion
Community marketing was devised to link women smallholders to the markets without conflicting with social and cultural norms for which women were responsive, and our research findings supported the claim that they benefited from community marketing participation. Therefore, government, NGO, or other extension providers looking for a culturally appropriate approach to address women farmers’ limited mobility may consider using or modifying community marketing.
... We are aware of three previous studies that evaluated and compared welfare effects of different contract types, namely Arouna et al. (2021) for rice in Benin, Ashraf et al. (2009) for horticultural crops in Kenya and Mishra et al. (2016) for rice seed in Nepal. All three studies find only minor differences between the different contract types. 2 However, rice and horticultural crops are annual crops that require much lower investments than a plantation crop such as oil palm. ...
... Wang et al. (2014) found that 75% of the studies analyzing income effects of contract farming report positive and statistically significant results.2 Arouna et al. (2021) examine three different types of contracts: a marketing contract with a fixed price, a production management contract with extension training and a resource-providing contract.Ashraf et al. (2009) examine a contract that is linked to the credit scheme of a bank and a contract that only arranges the sale of the produce.Mishra et al. (2016) examine three different types of contracts: a contract with output conditions specified, a contract with input conditions specified and a contract with both output and input conditions specified ...
Contract farming has gained in importance in many developing countries. Previous studies analysed effects of contracts on smallholder farmers’ welfare, yet mostly without considering that different types of contractual relationships exist. Here, we examine associations between contract farming and farm household income in the oil palm sector of Ghana, explicitly differentiating between two types of contracts, namely simple marketing contracts and more comprehensive resource-providing contracts. Moreover, we look at different income sources to better understand how both contracts are linked to farmers’ livelihood strategies. We use cross-sectional survey data and regression models. Issues of endogeneity are addressed through measuring farmers' willingness-to-participate in contracts and using this indicator as an additional covariate. Farmers with both types of contracts have significantly higher household incomes than farmers without a contract, yet with notable differences in terms of the income sources. Farmers with a marketing contract allocate more household labour to off-farm activities and thus have higher off-farm income. In contrast, farmers with a resource-providing contract have larger oil palm plantations and thus higher farm incomes. The findings suggest that the two contract types are associated with different livelihood strategies and that disaggregated analysis of different income sources is important to better understand possible underlying mechanisms.
... In Zimbabwe, the liberalisation programs of the 1990s slowed down public spending on agricultural infrastructure, abolished state monopoly in distribution of inputs, credits, purchasing and marketing usually at pan-territorial prices (Alwang et al, 2002;Taylor et. al, 2008). ...
... Improved market access is an indispensible aspect of a rural livelihood strategy that promotes agriculturebased economic growth, rural development, increased rural income and poverty reduction (IFAD, 2003;Dorward et al., 2003;2005). "Without good access to markets, a poor household cannot market its produce, obtain inputs, sell labour, obtain credit, learn about, or adopt new technologies, insure against risks, or obtain consumption goods at low prices" (Taylor et al., 2008:page?). ...
The research used the parametric and non-parametric statistical estimations to determine how the choice of maize marketing channel is related to household characteristics, in the post grain market reform era. Household data was drawn from a survey of 329 farmers drawn from5 districts of Zimbabwe. Given the economic crisis that incapacitated the state-owned GMB market to pay on time, the study noted that grain sector reforms failed to protect the poor. High payment risk of GMB eliminated the poor and restricted them to low return, on-state marketing channels. The research also established that, those who sold through GMB have higher per capita expenditure which is 9 times higher than the lowest expenditure category and annual gross income which is 18 times higher than the lowest income categories. They also have high productive land and asset endowments. The research therefore, recommended that, if inclusive and pro-poor growth is to be achieved through agricultural marketing reforms, such reforms must be accompanied by policy measures that enhance the productive capacity of the farmers.
... Contract farming has been linked favorably to family food security (Bellemare, 2012), the accumulation of household assets (Molla, 2016), and employing skilled personnel on farms (Khan et al., 2019). Furthermore, contract farming and credit are closely intertwined, and the contracting company's provision of credit together with the output contract greatly raises farmers' involvement in contract farming for the exports market (Ashraf et al., 2009). ...
Contract farming is considered the most effective income-generating strategy for smallholder farmers and a significant source of foreign currency in Ethiopia. Avocado farmers in the study area made a contract agreement with the Savando avocado oil processing company, which is part of the Yirgalem agro-processing industry. The main aim of this research was to look at the factors influencing avocado producers’ decision to participate in contract farming and how it would affect their income, using data collected from 413 avocado producers in Dale district, Sidama region, Ethiopia. The cross-sectional research design and multi-stage sampling procedure were used to choose the study’s representative sample. The data were analyzed using descriptive statistics, inferential statistics, and propensity score matching model. The findings of this study indicated that the age of the household head, sex of the household head, education level of the household head, family size, and proportion of the farmland allocated for avocado production influenced the avocado producers’ participation in contract farming under the agro-processing industry. Average treatment effect on treated (ATT) estimation showed that participation in contract framing had a substantial impact on avocado producer households’ income. The study suggests that local government should offer adult education to improve smallholders’ knowledge and attitudes towards the benefits of participation in contract farming schemes in the study area. Moreover, the district office of agriculture needs to work with farmers to allocate more land for avocado production.
... Several strategies for preventing this aflatoxin menace have been proposed in the county, but the implementation uptake among the farmers is very low. Principal prerequisite for entry into the food markets globally and even access to the high-value local markets in the growing nations currently is food safety (Ashraf et al., 2009). ...
Aflatoxins are naturally occurring harmful toxins produced by the fungi Aspergillus flavus and Aspergillus parasiticus. Aflatoxin contamination is a cross-boundary and multifaceted problem that requires participation and involvement of both private and public stakeholders. Agriculture is the main economic activity of Tharaka-Nithi County, yet it is among the hot spots of aflatoxin in Kenya. The county is extremely vulnerable to climate-related risks; however, there is lack of local data on aflatoxin contamination to inform interventions chiefly due to lack of local research, testing facilities, and qualified personnel. The main purpose of this study was to analyze cereals used as staple foods for aflatoxin contamination and to evaluate households' awareness on the overall management of aflatoxin, and identify factors contributing to aflatoxin contamination. Eighty one samples were collected and laboratory analysis conducted using ELISA Kit. Aflatoxin levels in 25.8% of samples was above the Kenyan standards of 10ppb with 17.2% exceeding 20ppb. Aflatoxin levels in 44.4% of market samples exceeded 10ppb. The level of aflatoxin contamination was associated with the type of cereals and grains (p<0.05). There was no difference in mean level of aflatoxin in cereals from the study areas (p>0.05). Furthermore, there was no difference in mean level of aflatoxin in the cereals and grains collected from the markets and households (p>0.05). Majority of the farmers (84.7%) were aware of aflatoxin. However, detailed information on its management was scanty and inconsistent. Awareness creation on aflatoxin contamination to all stakeholders in the cereals value chains is needed for their concerted efforts in its control. Recognition of these barriers together with the opportunities for aflatoxin containment, the researcher hoped to improve the knowledge on aflatoxin management, health, and economic well-being of households and by extension the national food security.
... Binswanger's procedure was also applied in other artefactual field experiments, with the non-standard subject pool comprising not farmers but village households (Barr et al., 2012). The procedure was also used in studies with subjects from developing countries, with decisions being hypothetical and, hence, without monetary incentives (Ashraf et al., 2009;Bryan, 2019;Giné & Yang, 2009). ...
This paper investigates risk preferences using an artefactual field experiment conducted with a non-standard subject pool of farmers in Ghana. I introduce an alternative methodology for studying preferences following replication of a seminal risk elicitation procedure by Binswanger (Am J Agric Econ 62(3):395407, 1980). An important feature of both approaches is that they are easy to understand and, hence, are particularly suitable for eliciting preferences among subjects with low levels of formal education. I successfully replicate Binswanger’s study, documenting how his original result of the moderate level of risk aversion for an average farmer can be generalized to a different country. However, using my alternative approach, whereby lotteries are presented in the loss domain, I find that half of my experimental subjects violated expected utility theory. This approach is of relevance to the current literature on studying risk preferences among subjects with poor literacy skills.
... But while smallholders are often aware of the productivity benefits of high-quality seeds of improved varieties, their demand for these technologies remain surprisingly low (Bold et al., 2017(Bold et al., , 2022Sheahan and Barrett, 2017). This may partly reflect the low or variable returns to the technologies, or the costs in obtaining them from markets (Bold et al., 2022;Ashraf et al., 2009). Another potential explanation is the smallholder's inability to accurately assess the technology's quality due to weak market regulation and extension systems or, more generally, from market failures arising from asymmetric information Bold et al., 2022;Bai, 2021;Ashour et al., 2019;Jack, 2011). ...
This paper measures the effect of seed quality misperceptions on bidding behavior and demand for high-quality seed using an information-provision experiment within an incentive-compatible Vickery Second Price (SPA) auction mechanism that mimics seed purchasing decisions in the presence of seed market frictions. We find that most individuals are prone to quality misperception and revise their bids upwards (downwards) in response to positive (negative) quality signals. In addition, by exploiting random variation in the timing of cash grants, we show that imperfect information influences farmer seed valuation, even in the presence of potentially binding liquidity constraints. We also demonstrate that the provision of quality information does not fully resolve quality misperceptions. We then show that unresolved or persistent misperception is severe enough to distort bidding behavior, and ignoring it could lead to biased willingness-to-pay estimates. Our findings have important implications both for improving inference related to the identification and estimation of willingness to pay for quality seed in the presence of market frictions, and for the design of seed sector polices in developing countries.
... Several explanations for the low uptake of agricultural technology among smallscale, resource-poor farmers in low-and middle-income countries have been explored and tested with increasing depth and rigor in recent years. These include access to information about existence, use, and benets of the technology (Ashraf, Giné, and Karlan, 2009;Van Campenhout, 2021), procrastination and time-inconsistent preferences (Duo, Kremer, and Robinson, 2011), heterogeneity in the net benets derived from the technology (Suri, 2011), missing markets for risk and credit Karlan et al. (2014), and challenges related to learning about new technologies (Hanna, Mullainathan, and Schwartzstein, 2014). ...
Recently, issues related to the (perceived) quality of inputs and technologies have been proposed as an important constraint to their adoption by smallholder farmers in low income countries. Taking maize seed embodying genetic gain as a case, we train random agro-dealers to test whether under-adoption by farmers is caused by low quality due to sellers' lack of knowledge about proper storage and handling. In a second hypothesis, we randomly introduce an information clearinghouse similar to popular crowd-sourced review platforms such as yelp.com or trustpilot.com to test whether information asymmetries crowd out quality seed. We find that the information clearinghouse treatment improves outcomes for both agro-dealers and farmers, with agro-dealers receiving more customers and reporting higher revenues from maize seed sales, and farmers reporting signicantly higher use of improved maize seed varieties obtained from agro-dealers, leading to higher maize productivity after two seasons. The primary mechanisms behind this impact appear to be an increased effort to signal quality by agro-dealers and a general restoration of trust in the market for improved seed. The agro-dealer training does not have a clear impact on agro-dealers, nor on farmers in associated catchment areas. However, we do find that the information clearinghouse increases agro-dealer knowledge about proper seed storage and handling. Upon exploring interaction effects between the training and the clearinghouse treatment, we also find that the training becomes effective for agro-dealers that are also in the clearinghouse treatment group. This underscores the importance of incentives to make supply side interventions such as trainings effective.
... Several key constraints to agricultural technology adoption have been tested in recent years. These include poor access to information (Ashraf, Giné, and Karlan, 2009), procrastination and time-inconsistent preferences (Duflo, Kremer, and Robinson, 2011), heterogeneity in the net benefits derived from the technology due to differences in infrastructure and transaction costs (Suri, 2011), missing markets for risk and credit (Karlan et al., 2014), and challenges related to learning about new technologies (Hanna, Mullainathan, and Schwartzstein, 2014). ...
... Further, Ashraf et al. (2009) disclose that in Kenya, farmers dedicated greater portions of their land to growing cash crops than food crops. Whereas there has been the intensification of the production of cash crops, yields have decreased. ...
... Further, Ashraf et al. (2009) disclose that in Kenya, farmers dedicated greater portions of their land to growing cash crops that food crops. Whereas there has been the intensification of the production of cash crops, yields have decreased. ...
This book aims to shed light on land grabbing, which corrupt politicians disguisedly call land leasing that many African countries are now involved in under the guise of investment. The major argument I make in this volume is that rich countries and companies are now committing a sacrilegious crime against poor Africans, which is likely to backfire soon than later after its adverse ramifications surface. To put it in context, such a crime is not only detrimental but self-inflicted wounds if not a suicidal act for Africa whose greedy and myopic rulers give a good name of investment. This sort of investment is not a panacea for Africa’s problem. Instead, it is a catalyst of land colonisation, which soon will exacerbate the problem. There are ways of solving Africa’s economic tanking.
The book poses a few simple questions: Instead of leasing out the land, why can’t such countries enter agreements with those they are leasing land to and produce food or whatever produce and supply them? Does Africa have any plan B in case things go skewwhiff in this agricultural geopolitics and land grabbing? Where did Africa study the entire project to assess its performance before swallowing it hook, line, and sinker for its peril. Also, the book considers landlessness in many African countries as a ticking bomb, especially when victims evidence how the land they call theirs is decadently and recklessly dished out by corrupt and irresponsible rulers or official in their countries while they are not only landless but also starving simply because those they wrongly trust have openly betrayed and sold them. Africa has always suffered from food insecurity. Land grabbing soon will become a food and national security issue.
... The negative externality on NPK use, which is indicative of a shortage of either fertilizer or credit at the village level, suggest that the most important input in the training was not easily accessible by the farmers. Existing studies set in Kenya have shown that intervention packages targeting multiple constraints (e.g. by combining training with financial support, input supply, and marketing assistance) can be effective at increasing adoption of new crops (Ashraf et al. 2009) or fertilizer and improved practices, ultimately increasing yield and profits (Deutschmann et al. 2019). Promising avenues for future research include asking how these multiple constraints interact with information frictions and the complexities of social learning. ...
... Opportunistic behavior due to an incomplete contract enforcement environment, such as policy change, is a risk in many economic transactions leading to unfulfilled contracts (De Janvry and Elisabeth, 2007). Scholars have identified sources of moral hazard and free-riding behaviors in farmers/cooperative and private investors relationships including asymmetric information and idiosyncratic (Arouna et al., 2021;Bonroy et al., 2018;Merel et al., 2015;Castriota and Delmastro, 2015;Fares and Orozco, 2014;Ashraf et al., 2009;Fares, 2009;Cinyabuguma et al., 2004). To our knowledge, little is known about the extent to which changes in the regulatory framework promote moral hazards among farmers. ...
The private sector is essential for improving the coffee sector by supporting farmers through cooperatives and groups. The study objective is to assess the impact of policy changes on moral hazard and private-farmers investment synergy. The present study used data collected from coffee farmers and cooperatives in Mbeya, Songwe and Ruvuma in Tanzania. Analyses were achieved by using descriptive statistics and difference-in-difference (DiD) at both the farm level and cooperative level. The results indicate that the 2017/2018 government policy changes ameliorated moral hazard and free-riding behaviors among farmers, owing to repay loans. Cooperatives with contractual arrangements with private investors suffered from moral hazards attributable to policy changes whereby the decline in the coffee collection was 33,040 kg (with an average treatment effect on the treated (ATT)) of coffee parchment, whereas, at the farmers’ level, farmers reduced the collection of coffee with an ATT of 24.6 kg. In addition, because of these changes, some central pulse units were found to be non-functional, while others were under-utilized. In this regard, such moral hazard behavior among coffee farmers destabilized cooperatives, as well as the existing synergy between private investors and cooperatives. It is recommended that before policy or any institutional change, it is important to consider strategies and paths to reduce the moral hazard and free-riding behaviors of any stakeholder to improve market efficiency. For the coffee sector, this would include farmers collecting coffee from member cooperatives only. The government must consider having an effective institutional/policy change mechanism, in particular having a preparatory stage for policy change, to ensure that all contracts that have to be affected by such changes are reinforced properly to reduce unnecessary losses for any actor in the value chain. The government can facilitate or mediate disputes related to investments in agriculture, provide administrative support, and help negotiate compensation.
... For instance, (Karlan and Valdivia, 2011) employed rigorous research approaches, including randomised controlled trials, to assess the impact of microfinance. Similar high-quality impact assessment studies are found within the literature which compare the impact of having a loan or savings account with not having either (Adjei and Arun, 2009;Ashraf et al., 2008;Barnes et al., 2001). This non-uniform evidence calls for a rigorous systematic review of the evidence on the impact of microfinance on the poor. ...
This study reviews the qualitative and quantitative research on the impact of microfinance (especially micro-credit) on the poor in Kenya to enable practitioners, donors and policy-makers understand the nature of the evidence available. Despite a large body of impact studies on the effectiveness of microfinance on the poor in Kenya, no systematic review has been conducted that brings together all these studies and evaluates the nature of the evidence of microfinance's impact on the poor in Kenya. In general, this study discovers that microcredit positively impacts the poor; however, the results are not uniform. The proposition of microfinance as the panacea for poverty and women's empowerment might be flawed. On the other hand, microcredit could cause more harm than good if the amount is spent on consumptive activities rather than investing in the future or if the businesses fail to generate enough profit. The study recommends consideration of both the potential good and the potential harm whilst making policy decisions on microfinance in Kenya. Microfinance impact assessment studies should develop a standardised methodological framework to produce consistent results. Similarly, microfinance should not be considered the only way of rescuing the poor from the chains of poverty; in fact, other structural solutions should be sought for solving structural problems such as poverty.
... Contract farming has also been shown to have a positive association with household food security [31], household asset accumulation [32], and employment of skilled labor on farms [29]. Ashraf et al. [33], relates contract farming with credit and observes that the contracting firm's offer of credit alongside the output contract significantly increases farmers' participation in contract farming for the exports market. ...
Background
It is believed that in Ethiopia barley has been cultivated before 3000BC. Among the cereals, it is ranked in fifth place and the most important crop next to teff, sorghum, and wheat in the country. Different works of literature highlight that engagement in contract farming is one of the innovations promoted to tackle technology constraints of the smallholder farmers, as a possible solution to raising productivity and linking smallholders in the emerging modern marketing chains. Associated with the rapid rate of urbanization in the country, there is a high demand for malt barley which is resulting high expansion of beer factories. Consequently, in the study area, many farmers got into a contract agreement with Assela malt barley factories. Recent studies conducted on malt barley in Ethiopia gave much emphasis to the value chain aspect of malt barley. Therefore, the main motive behind this study was to fill the empirical literature gap in the field by giving much emphasis on the impact assessment of malt barley contract arrangement on income and food items dietary diversity of the respondent households.
Methodology
To attain the study objectives, both primary and secondary data were collected and used. Randomly selected 312 households comprising 127 households engaged in malt barley contract farming arrangements and 185 non-contract households were the source of primary data for this study. Secondary data were collected from a review of different works of literature. Both descriptive and econometric models were used to analyze the primary data using Stata software version 14. The propensity score matching model was applied to examine the impact of malt barley contract farming engagement on the income and dietary diversity of the respondents.
Result
It was found that family size, credit use, livestock holding, malt barley production experience, frequency of extension contact, and land allotted for malt barley production positively determine the probability of participation in malt barley contract farming arrangement. Contrary to this, distance to the malt barley collection centers negatively determine the probability of participation in malt barley contract farming. The ATT estimation of the PSM indicated that participation in malt barley contract farming has a positive impact on the income and dietary diversity of the respondent households.
Conclusion
Participation in contract farming had a positive and significant impact on the annual income and dietary diversity of the smallholder households. The sensitivity analysis result showed that the impact results estimated by this study are insensitive to unobserved selection bias and the result obtained shows the true impact of contract farming on the income of the households. Therefore, concerned bodies working on malt barley production aspects as a development intervention should work to encourage non-contract farmers to engage in this activity.
... Secondly, our paper contributes to the literature on financial access, in which it is the first empirical study-to our knowledge-that focuses explicitly on the role of contextual aspects of business environments in explaining the entrepreneurial outcomes of microfinance clients. The study that perhaps has the closest intuition is Ashraf et al. (2009), who focus on the role of improved contextual opportunities through improved value-chain linkages to new markets. In this literature strand, there are also a number of studies analyzing the effects of large-scale bank expansion on financial inclusion and development (Burgess & Pande (2005); Bruhn & Love (2014)). ...
We study how the quality of local business environments helps explain growth outcomes of micro- and small enterprise microfinance clients by drawing on long-term nationwide administrative data and a policy shock in Cambodia. The staggered launch of special economic zones, which we link to positive shocks to the business environment on both the demand and supply side, leads to significantly increased employment in micro- and small enterprises (MSEs) located in these special economic zones (SEZs), compared to enterprises in contextually similar districts that are unexposed to an SEZ. Key channels explaining the improved growth outcomes include expanded access to external markets for the enterprises’ goods and services, more dynamic labor environments, and improved credit terms and conditions. To broaden the relevance of our findings, we combine data from prominent empirical studies on microfinance and demonstrate how related business conditions identified in the enterprise growth literature help explain differences in client business outcomes found in their results. Policy implications are that a smaller but influential segment of microfinance borrowers significantly benefit from opportunities provided by improved local business environments and that governments and lenders can play active roles in facilitating the necessary improvements for such MSEs.
... Farmers who are unable to meet compliance costs may therefore lose market access. For instance, Ashraf, Giné, & Karlan (2009) look at a marketing information intervention in Kenya intended to increase farmers' participation in export markets. Although the intervention was successful, a year afterwards the farmers were excluded from export markets due to an inability to comply with the emerging GlobalGAP standard. ...
... For fi rms engaging with aggregators and FPOs would be benefi cial in terms of better contract terms and access to farm produce and lower transaction costs and supply uncertainty (Bachke 2010;Viinikainen and Caro 2018). Empi rical studies have found that farmer groups and cooperatives can play a positive role in encouraging smallholder participation in CF (Ashraf et al 2009). Over 80% of the stakeholders surveyed in this study were of the view that collectivisation of farmers, including through the FPO route, would help S&M farmers to enter into CF system and perform better under it. ...
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 is an important legislative landmark in the context of Indian agricultural policy. The major concerns relating to the adoption of the contract farming system in the Indian context are proposed to be resolved through the enabling legislative measures proposed in the act. This paper critically examines the various provisions contained in the act to assess its potential in mitigating the key concerns of adopting the CF practice in India
... Several reasons have been attributed to the low adoption rates, including lack of information (Ashraf, Gin e, & Karlan, 2009), high transaction cost due to bad road network (Suri, 2011), lack of access to formal credit and insurance (Karlan, Osei, Osei-Akoto, & Udry, 2014), procrastination and inconsistencies in the use of inorganic fertilisers (Duflo, Kremer, & Robinson, 2011), lack of access to inputs (Emerick & Dar, 2021), and differences in agroecological conditions (Bouwman, Andersson, & Giller, 2021;Giller et al., 2011). Nevertheless, the dissemination methods used to spur farmers into adopting new agricultural technologies have received less attention in the adoption literature (Emerick & Dar, 2021). ...
As part of the dissemination of sustainable intensification (SI) of agricultural practices in northern Ghana, farmers were conditionally induced with inputs to adopt the SI practices. We study the effects of the conditional inducement on maize yield and net income of farmers under a quasi-randomised phase-out design. We examine the effects of the inducement by comparing continuous induced farmers with past induced and non-induced farmers. Our results indicate that the conditional inducement led to an increase in the maize yield and the net income of continuously induced farmers, on average. Estimates also suggest that the continuously induced farmers would have had their maize yields and net incomes decreased by about 64 per cent and 54 per cent, respectively if the inducement had been discontinued. Distributional analysis reveals that the inducement effects are heterogeneous and that past inducement impacted more on the maize yield and the net income of farmers at the lower quantiles. We conclude that appropriate conditional inducement can stimulate farmers’ adoption. Besides, the duration of intervention matters and must not be overlooked in interventions that necessitate gaining experience and learning.
... By adopting the standards, the farmers may signal that they comply with food safety regulations and thus be able to access export markets. This market access has mostly been shown to have a positive income effect for adopting farmers (Kariuki, Loy, & Herzfeld, 2012;Holzapfel & Wollni, 2014;Roy & Thorat, 2008), although some evidence exists to the contrary for non-adopting farmers (Ashraf, Giné, & Karlan, 2009). However, while some farmers are unable to adopt the standards, other research shows that the adoption of private standards impacts nonadopting smallholders' income through the labour market. ...
The objective of this report is to provide an overview of economic literature on marketing standards in the food supply chain by (i) providing analyses on economic concepts and impact of marking standards and (ii) by narrowing the focus on their impact on sustainability. The first part of the literature review focuses on the harmonisation, minimum quality standards and transparent consumer information and trust (protected terms, consumer information and labels). The second part of the literature review aims to identify avenues of standard improvements that may promote sustainability by focusing in more details on standard alterations that may contribute to (i) food loss and waste reduction, (ii) accommodate food chain innovation, and (iii) address climate change.
... Prior research on value-chain interventions-the improvement of access to inputs, information, and services by small-holders and SMEs (Humphrey and Navas-Aleman, 2010;Stoian et al., 2012) 5 -provides mixed results regarding the efficacy of organizational interventions (Akram-Lodhi, 2009;Ebata and Huettel, 2019;Vicol et al., 2018). For example, positive effects may only last until funders cease investments (Ashraf et al., 2009), and long-term benefits, such as more income for farmers, may be limited Poole, 2013, 2014;Rutherford et al., 2016). Factors such as short-term funding for research projects have led to a lack of longitudinal data, and we know little about how interventions can be sustained over time (Ebata and Huettel, 2019). ...
Previous research has shown that networks are vital for scaling the impact of social enterprises. However, at present, insight into how and why social enterprises successfully orchestrate networks over time as they scale, particularly in the Sub-Saharan African emerging economy context, is scant. Theoretically sensitized by social network theory, our inductive study of six Kenyan social enterprises analyzed their phase-contingent network orchestration. Our findings show how and why entrepreneurial contextual bridging and circumventing social liability are important for initial scaling, whereas aligned capacity building as well as aligning incentives with political actors become necessary to develop and navigate social business ecosystems. In sum, we contribute a deeper understanding of how and why agentic network actions help social entrepreneurs achieve success as they scale in an emerging economy context.
... The literature on technology adoption has identified lack of information (Ashraf, Giné and Karlan, 2009), poor road network (Karlan et al., 2014), inadequate use of inorganic fertilizer (Duflo, Kremer and Robinson, 2011), lack of access to new inputs (Emerick and Dar, 2021), and differences in farming systems (Giller et al., 2009;Giller et al., 2011) as some of the causes for the poor adoption of agricultural technologies and practices. Bedi et al. ...
The effects of agricultural technology adoption on farm performance have been studied extensively but with limited information on who should be targeted during scaling-up. We adopt the newly defined marginal treatment effect approach in examining how farmers' resource endowment and unobserved factors influence the marginal benefits of adopting sustainable intensification (SI) practices. We estimate both the marginal and average benefits of adopting SI practices and predict which marginal farm household entrants will benefit the most at scale. Findings indicate that farmers' resource endowment and unobserved factors affect the marginal benefits of adopting SI practices , which also influence maize yield and net returns among adopters. Finally, results imply that scaling up SI practices will favour farm household entrants associated with the lowest probability of adoption based on observed socioeconomic characteristics.
... It is possible that loss of motivation, lack of trust and frustration with intermittent payments may produce more grazing over time and potentially negatively impact other conservation behaviours. Moreover, we note the need to understand the socioeconomic impacts of payment loss as well as the potential implications of loss of trust for future conservation initiatives 48 . Finally, given the nature of the uncertainty in the PES programme, we cannot rule out that participants refrained from grazing, in part, due to hopes that the programme would resume payments in full so long as they continued with contract conditions. ...
Payment for ecosystem services (PES) programmes seek to promote conservation via payments for desired resource-use behaviours. While PES has been found to produce some ecological and livelihood benefits, an understudied concern is what happens when payments stop. We assess how households’ land-use behaviours changed in response to a temporary gap in payments and subsequent payment uncertainty in a programme in Ecuador, which paid communities to reduce their grazing on their communal lands. In 2015, after six years in operation, the programme lost funds and stopped payments. These resumed in 2017, but participants were only partially repaid retroactively, and future payments remained uncertain due to funding instability. Using a difference-in-difference modelling approach, we compare household grazing behaviour between communities in the programme and a set of control communities over ten years before PES payments, during PES payments and after the gap in payments in a period where participants were still owed at least one past payment and future payments were uncertain (n = 871 households). We find that grazing was significantly reduced by almost 20% over the ten-year period and that households continued to refrain from grazing even after experiencing payment loss. Our results demonstrate the importance of aligning programme objectives with community conservation and livelihood goals. Our discussion suggests how these conditions may interact with PES to prompt sustained behavioural change.
... 26 The questions are: (1) What are the days of the plant before they are moving from seedbed to soil? (principle 1); (2) how many seedlings should you plant together in the same hill? (principle 2); (3) what is the distance between plant to plant in cm? (principle 3); (4) what type of fertilizer should you use more in SRI fields? (principle 5) (principle 5); (5) after transplanting and before flowering, should the surface of the field be allowed to dry out at any time? ...
... Prior research on value-chain interventions-the improvement of access to inputs, information, and services by small-holders and SMEs (Humphrey and Navas-Aleman, 2010;Stoian et al., 2012) 5 -provides mixed results regarding the efficacy of organizational interventions (Akram-Lodhi, 2009;Ebata and Huettel, 2019;Vicol et al., 2018). For example, positive effects may only last until funders cease investments (Ashraf et al., 2009), and long-term benefits, such as more income for farmers, may be limited Poole, 2013, 2014;Rutherford et al., 2016). Factors such as short-term funding for research projects have led to a lack of longitudinal data, and we know little about how interventions can be sustained over time (Ebata and Huettel, 2019). ...
Previous research has shown that networks are vital for scaling the impact of social enterprises. However, at present, insight into how and why social enterprises successfully orchestrate networks over time as they scale, particularly in the Sub-Saharan African emerging economy context, is scant. Theoretically sensitized by social network theory, our inductive study of six Kenyan social enterprises analyzed their phase-contingent network orchestration. Our findings show how and why entrepreneurial contextual bridging and circumventing social liability are important for initial scaling, whereas aligned capacity building as well as aligning incentives with political actors become necessary to develop and navigate social business ecosystems. In sum, we contribute a deeper understanding of how and why agentic network actions help social entrepreneurs achieve success as they scale in an emerging economy context.
... Existing studies relied on both objective and subjective measures of poverty. Objective measures such as income (Barnes et al. 2001;Ashraf, Gine, and Karlan 2008;Nanor 2008;Swamy 2014;Samer et al. 2015), expenditure (Khandker 2005;Chowdhury et al. 2005;Nanor 2008;Swamy 2014;Banerjee et al. 2015), assets accumulation (Adjei, Arun, and Hossain 2009) and poverty index (Imai, Arun, and Annim 2010) were used as proxies. In the case of subjective poverty measures, Chowdhury et al. (2005) is among the few studies that asked respondents to indicate whether they were poor or not. ...
We investigate the impact of Baobab Microfinance Company (BMC) loans on poverty and economic empowerment of female clients using a mixed methods approach. Using a sample of 411 BMC clients, we find in some cases, relative lower poverty and higher economic empowerment for clients with a higher frequency of loans compared to those with a lower frequency of loans. An implication is that the marginal impact of loans across different loan cycles is U-shaped rather than linear and has a short-term impact on clients. Furthermore, our qualitative results suggest that loans help women lower poverty and become economically empowered.
... Four good-quality studies explored the effect of microfinance on economic empowerment (Ashraf et al. 2008;Barnes et al. 2001;Dupas and Robinson 2008;Nanor 2008) and showed that microfinance has both positive and negative effects. Household incomes were significantly higher in microfinance recipients than non-recipients in two of four districts examined, but significantly lower in the other two. ...
Despite the widespread use of microfinance programs since the early 1990s, there is little empirical research on the effects of microfinance on recipients’ livelihoods in rural areas. We therefore compared the effects of governmental and non-governmental microfinance on livelihood and empowerment in rural Bangladesh. Data were collected in two phases from the same 300 microfinance beneficiaries and 200 control respondents using face-to-face interviews. Both descriptive and inferential statistics (propensity score matching, Rosenbaum bounds, and ordinary least squares) were used for analysis. Fixed effects instrumental variable estimates were also designed to minimize spillover effects. Microfinance significantly contributed to different livelihood and empowerment dimensions to ultimately improve livelihoods, with the greatest improvements seen in non-governmental rather than governmental microfinance recipients.
... Model 2 shows that this finding is robust to the inclusion of regional effects. Ashraf, Giné, and Karlan (2009) provide an illustration of how credit constraints are categorically different from access to credit. Based on a randomized control trial in Kenya, they find that the provision of credit increased participation in an export market access program but was not related to increased incomes. ...
Agricultural technologies have long been promoted by governments and development organizations as effective ways to increase farm productivity and reduce poverty. However, adoption of many seemingly beneficial technologies remains low. Empirical adoption studies attempt to identify the motivation for adoption based on differences in characteristics between adopters and non-adopters. This study investigates variables that regularly explain adoption across technologies and contexts using a meta-analysis of 367 regression models from the published literature. We find that, on average, farmer education, household size, land size, access to credit, land tenure, access to extension services, and organization membership positively correlate with the adoption of many agricultural technologies. Technologies in the categories of improved varieties and chemical inputs are adopted more readily on larger farms, which casts doubt on the scale-neutrality of these technologies. Agricultural credit can positively influence adoption, but researchers should measure whether farmers are credit constrained, rather than simply whether or not they have access to credit. While extension services may substitute for education in the case of improved varieties, the two variables appear to be complementary for natural resource management technologies. Land tenure can encourage adoption of natural resource management techniques, and we find it to be most influential in the adoption of technologies with long planning horizons, such as erosion control methods. Unsurprisingly, although some patterns are identified when results are averaged, most adoption determinants vary widely by technology, cultural context, and geography. Based on these observations, we provide some recommendations for adoption researchers and policy makers, but, given the variability of the results, conclude that efforts to promote agricultural technologies in the developing world must be adapted to suit local agricultural and cultural contexts.
... Disregarding some notable exceptions, such as Francesconi and Wouterse (2015) and Arcand and Wagner (2016), there has been little research on the inner workings of farmer groups. Even among studies that use randomized controlled trials to evaluate the effects of projects employing a farmer group model, examination of the farmer group formation, composition, and functioning is left in the background (Burke, 2017, Ashraf, Giné, & Karlan, 2009. ...
Farmer groups are the cornerstone of many agricultural projects in low income countries. The success of such projects crucially depends on the ability of group members to cooperate. We conducted a series of public goods experiments to study within-group cooperation in Malawian farmer groups. We combine results from these experiments with survey data and qualitative interviews. Our results shed light on the heterogeneous capacity of groups to cooperate. We find that democratically run groups, in particular those with close social ties, are more cooperative compared to groups with leader-driven decision-making. Focus groups indicate that this democracy is deliberative in nature, characterized by open discussion that aggregates preferences, increases common knowledge, and creates goodwill. A second set of experiments in which we experimentally vary the decision-making processes yields quantitatively similar results in arbitrary groupings of farmers and null results in pre-existing groups with established decision-making procedures, demonstrating the stickiness of institutional rules. Our results imply that group formation and functioning needs to be included in the design phase of agricultural projects in low income countries.
... Among those discussed, the studies examine contracts for insurance, credit, or tenure, and not contracts for farm production. Ashraf et al. (2009) might be a potential candidate for the first field experiment on contract farming. However, the authors randomize "services offered" by an NGO that helps farmers export crops, not with the processing and export firm itself. ...
Contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. Yet, there is a lack of consensus on its ability to spur structural transformation in rural economies. We present results from a field experiment on contract farming in a developing country. While all contracts have positive effects on welfare and productivity measures, we find that the simplest contract has impacts nearly as large as contracts with additional attributes. This suggests that once price risk is resolved through the offer of a fixed-price contract, farmers are able to address other constraints on their own.
... Many studies analyzed the effects of contracts on agricultural productivity and income in the small-farm sector (e.g., Ashraf, Giné, & Karlan, 2009;Barrett et al., 2012;Khan, Nakano, & Kurosaki, 2019;Mishra, Kumar, Joshi, & D'Souza, 2016;Ragasa, Lambrecht, & Kufoalor, 2018;Rao, Brümmer, & Qaim, 2012;Ruml & Qaim, 2020). Possible effects of contracts on agricultural labor use received much less attention in the empirical literature. ...
Contractual agreements between smallholder farmers and agribusiness companies have gained in importance in many developing countries. While productivity and income effects of contracting in the small farm sector were analyzed in many previous studies, labor market and employment effects are not yet well understood. This is an important research gap, especially against the background of continued population growth and structural transformation. Here, we investigate the effects of two types of contractual agreements between large international processing companies and smallholder farmers on agricultural labor use, household labor allocation, and hired labor demand in Ghana's palm oil sector. We use cross-sectional survey data and a willingness-to-pay approach to control for unobserved heterogeneity between farmers with and without contracts. We find that agricultural labor intensity is substantially reduced through the contracts, because contracting in Ghana is associated with the adoption of labor-saving procedures and technologies. Simple marketing contracts lead to reallocation of the saved household labor to off-farm employment, whereas resource-providing contracts lead to a stronger reallocation of labor within the farming enterprise. Household labor is more affected by labor savings than hired labor.
... Further, a review by Clark, Harris, Biscaye, Gugerty, and Anderson (2015) of seven RCTs on impacts of credit interventions in various African countries produced mixed results. The RCT by Ashraf, Giné, and Karlan (2009) in Kenya produced positive significant impact of credit on production, but no significant impact on income/wealth; the RCT by Beaman, Karlan, Thuysbaert, and Udryet (2014) in Mali showed a positive significant impact on production; another RCT in Kenya by Burke (2014) showed no significant impact of credit on income/wealth and consumption/food security; the RCT by Fink, Jack, and Masiye (2014) in Zambia revealed positive impacts on income/wealth and resilience and mixed impacts on consumption/food security; the RCT in Morocco by Crépon, Devoto, Duflo, and Pariente (2014) produced mixed impacts on income/wealth and nonsignificant impacts on consumption/food security; the RCT by Kim et al. (2009) in South Africa found mixed impacts on consumption/food security; and the RCT by Tarozzi et al. (2015) in Ethiopia showed no significant impacts on income/wealth and a negative impact on consumption/food security. ...
... A second strand of literature, mostly using quantitative research methods, provides evidence on positive effects of contract farming on production and household welfare. From an economics perspective, farmers with a contract typically benefit through higher yields (Brambilla & Porto, 2011;Champika & Abeywickrama, 2014;Hernández, Reardon, & Berdegué, 2007), higher revenues (Bolwig, Gibbon, & Jones, 2009;Cai, Ung, Setboonsarng, & Leung, 2008;Jones & Gibbon, 2011;Kalamkar, 2012;Tripathi, Kumar, Roy, & Joshi, 2018;Tripathi, Singh, & Singh, 2005), higher profits (Islam, Roy, Kumar, Tripathi, & Joshi, 2019;Kumar & Kumar, 2008;Kumar, Roy, Joshi, Tripathi, & Adhikari, 2019;Mishra, Kumar, Joshi, & D'Souza, 2016;Narayanan, 2014), and higher incomes (Andersson, Chege, Rao, & Qaim, 2015;Ashraf, Giné, & Karlan, 2009;Bellemare, 2012;Cahyadi & Waibel, 2016;Ito, Bao, & Su, 2012;Khan, Nakano, & Kurosaki, 2019;Maertens & Swinnen, 2009;Maertens & Vande Velde, 2017;Miyata, Minot, & Hu, 2009;Rao & Qaim, 2011). A recent review of the existing empirical results showed that positive productivity effects were found in 92%, and positive income effects in 75 % of the cases (Wang et al., 2014). ...
Contract farming is typically seen as a useful mechanism to help smallholders in overcoming market access constraints. However, in spite of economic benefits, high smallholder dropout rates from contract schemes are commonplace. We use quantitative and qualitative data from Ghana to show that smallholder farmers benefit from a resource-providing contract in terms of higher yields and incomes, but that most of them still regret their decision to participate in the contract scheme and would prefer to exit if they could. The analysis underlines that research focusing on narrowly defined economic indicators alone cannot explain farmers' satisfaction with contracts and their dropout behaviour. The main problem in the contract scheme is insufficient information provided by the company. Farmers do not understand all the contract details, which leads to substantial mistrust. Farmers believe that the company behaves opportunistically, for instance during the output weighing procedure, and these beliefs are significantly correlated with the farmers' wish to exit. We conclude that issues of mistrust and lack of transparency can contribute to breakdowns of smallholder contract schemes and that such issues should receive more attention in future research on contract farming.
... GVC specifies 4 governance structure based on the types of so called 'lead actors' whose actions govern transactions in value chains and leverage points where the activities of smallholders can be improved to promote their participation in HVMs (see Lee et al., 2012). Farm NGOs function as traders who connect retailers to smallholders, with the economic successes of their projects hinging on continued transactions between smallholders and retailers (see Ashraf et al., 2009). ...
Connecting smallholder farmers to modern agricultural value chains (henceforth high-value markets [HVMs]) represents a credible pathway to improving the welfare of farmers in developing countries. Smallholder exit rates from HVMs remains high, raising concerns about their sustained participation of smallholders in HVMs. We conduct a Best-Worst Scaling choice experiment with horticultural farmers in Kenya to understand their perceptions and preferences for market attributes that could promote sustained participation in HVMs. A unique feature of our study examines smallholders' best or worst choice consistency as means to further understand their thought process. Our results reveal that smallholders mostly expressed preference for a flexible incentive-based pricing option and long-term formal relationships with their buyers. Delayed payments and high investment requirements were the worst market attributes chosen by smallholders. Preference heterogeneity was driven by the farming experience, gender, income and location of the farmers. We find that smallholders are well aware of conditions that might motivate exit from HVMs relative to conditions that facilitate participation in HVMs. Our findings demonstrate the relevance of various key market attributes central to participation in HVMs, while teasing out the various coordination roles cooperatives, non-governmental organisations can play in facilitating sustained smallholder participation in HVMs.
... Despite their proven benefits, adoption of many welfare enhancing products and technologies remains puzzlingly low across the developing world (Duflo et al., 2008(Duflo et al., , 2011Ashraf et al., 2009;Cohen and Dupas, 2010;Mobarak and Rosenzweig, 2013). This could be, for example, because producers do not have enough information to assess benefits associated with product use, because of liquidity constraints and the consequential high opportunity costs for money, lack of access (Simtowe et al., 2019), or downside risk associated with the investment (Emerick et al., 2016). ...
We examine smallholder farmers’ willingness to pay for agricultural technology and whether information is a constraint to adoption of certified maize seed in Northern Uganda. The uptake of improved maize varieties by smallholder farmers in Uganda remains persistently low, despite the higher yield potential compared to traditional varieties. A recently growing body of literature identifies information constraints as a potential barrier to adoption of agricultural technologies. We used incentive compatible Becker‐DeGroot‐Marschak auctions to elicit willingness to pay for quality assured improved maize seed by 1,009 smallholder farmers, and conducted a randomised evaluation to test the effect of an information intervention on farmers’ knowledge of seed certification. Our results show that the randomised information treatment enhanced farmers’ knowledge of certified seed. However, using the information treatment as an instrumental variable for knowledge, we find no evidence of a causal effect of knowledge on willingness to pay, suggesting that even though farmers are information constrained, this constraint does not affect adoption of certified seed directly. Nevertheless, only 14% of sampled farmers were willing to pay the market price, which corresponds closely with actual observed demand for certified seed in the previous season. This suggests that there are other barriers to adoption than information and awareness.
... To date, there have only been a handful of randomized controlled trials (RCTs) that induce exogenous variation in the terms of farm contracts. Ashraf et al. (2009) randomize access to marketing contracts among French bean farmers in Kenya in order to evaluate the effectiveness of a nongovernmental organization's services. Saenger et al. (2014) randomize access to third-party verification of product quality among dairy farmers in Vietnam to determine the effects of asymmetric information on investment. ...
We appraise the current status of relational contract theory, along with associated empirical studies, with the goal of providing an orientation to the field to economists who may not have expertise in contract theory. We begin with a theoretical discussion focusing mainly on intuition and the usefulness of the theory for conceptualizing applied agricultural contracting problems. We also discuss current theoretical challenges and the current state of empirical research on relational contracts. We conclude by discussing potentially fruitful areas for future research.
Expected final online publication date for the Annual Review of Resource Economics, Volume 12 is October 5, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
The Global Coalition for Evaluative Evidence for the SDGs (“the Coalition”) partnered with American Institutes for Research (AIR) to design and implement an evidence synthesis to understand what works, why, and in what context in improving SDG-17 or the Partnership Pillar of the SDGs, the first SDG for which the Coalition has commissioned an evidence synthesis (with others to follow on the
Peace, Prosperity, and Planet Pillars of the SDGs). The intended users of the synthesis include UN agencies, UN Member States from high-income, middle-income, and low-income countries, researchers and evaluators, and other stakeholders focused on achieving the SDG-17 objectives. This report presents the protocol for this evidence synthesis.
A rapid assessment of evidence (RAE) or rapid review is a type of policy research in the tradition of evidence-based approach in which a policy decision is made on the basis of robust research evidence. The procedure helps to collate the evidence of effectiveness of interventions under review. The method, however, doesn't cover the entire effect available in the repository of knowledge and considers only sources that provide only high effect that is easily accessible. That is chiefly the reason the process is termed as rapid assessment of evidence which is helpful in gaining a quick policy opinion. The current paper follows rapid evidence assessment and synthesizes the evidence of successful agricultural interventions that have been run by NGOs or private sector organizations. This is a two tiered activity in which evidence from India and evidence from world were accessed and processed separately. The study identifies most effective and efficacious interventions through critical appraisal. The study also analyses as to which identified interventions are feasible to be replicated in the context of India and particularly in the state of Uttar Pradesh (a province of India). In this way, the outcomes of this study could help policy stakeholders of agricultural development in Uttar Pradesh to identify most suitable interventions with high likelihood of success.
Adoption of improved seed varieties has the potential to lead to substantial productivity increases in agriculture. However, only 36 percent of the farmers that grow an improved maize variety report doing so in Ethiopia. This paper provides the first causal evidence of the impact of misperception in improved maize varieties on farm-ers' production decisions, productivity and profitability. We employ an Instrumental Variable approach that takes advantage of the roll-out of a governmental program that increases transparency in the seed sector. We find that farmers who correctly classify the improved maize variety grown experience large increases in inputs usage (urea, NPS, labor) and yields, but no statistically significant changes in other agricultural practices or profits. Using machine learning techniques, we develop a model of interpolation to predict objectively measured varietal identification from farmers' self-reported data which provides proof-of-concept towards scalable approaches to obtain reliable measures of crop varieties and allows us to extend the analysis to the nationally representative sample.
Background
The adoption of improved technologies is generally associated with better economic performance and development. Despite its desirable effects, the process of technology adoption can be quite slow and market failures and other frictions may impede adoption. Interventions in market processes may be necessary to promote the adoption of beneficial technologies. This review systematically identifies and summarizes the evidence on the effects of interventions that shape the incentives of firms to adopt new technologies. Following Foster and Rosenzweig, technology is defined as “the relationship between inputs and outputs,” and technology adoption as “the use of new mappings between input and outputs and the corresponding allocations of inputs that exploit the new mappings.” The review focuses on studies that include direct evidence on technology adoption, broadly defined, as an outcome. The term intervention refers broadly to sources of exogenous variation that shape firms' incentives to adopt new technologies, including public policies, interventions carried out by private institutions (such as NGOs), experimental manipulations implemented by academic researchers trying to understand technology adoption, and natural experiments.
Objective
The objective of this review is to answer the following research questions: 1. To what extent do interventions affect technology adoption in firms?
2. To what extent does technology adoption affect profits, employment, productivity, and yields?
3. Are these effects heterogeneous across sectors, firm size, countries, workers' skill level, or workers' gender?
Selection Criteria
To be included, papers had to meet the inclusion criteria described in detail in Section 3.1 which is grouped into four categories: (1) Participants, (2) Interventions, (3) Methodology, and (4) Outcomes.
Regarding participants, our focus was on firms, and we omitted studies at the country or region level. In terms of interventions, we included studies that analyzed a source of exogenous variation in incentives for firms to adopt new technologies and estimated their effects. Thus, we left out studies that only looked at correlates of technology adoption, without a credible strategy to establish causality, and only included studies that used experimental or quasi‐experimental methods. Regarding outcomes, papers were included only if they estimated effects of interventions (broadly defined) on technology adoption, although we also considered other firm outcomes as secondary outcomes in studies that reported them.
Search Methods
The first step in selecting the studies to be included in the systematic review was to identify a set of candidate papers. This set included both published and unpublished studies. To look for candidate papers, we implemented an electronic search and, in a subsequent step, a manual search.
The electronic search involved running a keyword search on the most commonly used databases for published and unpublished academic studies in the broad topic area. The words and their Boolean combinations were carefully chosen (more details in Section 3.2). The selected papers were initially screened on title and abstract. If papers passed this screen, they were screened on full text. Those studies that met the stated criteria were then selected for analysis.
The manual search component involved asking for references from experts and searching references cited by papers selected through the electronic search. These additional papers were screened based on title and abstract and the remaining were screened on full text. If they met the criteria they were added to the list of selected studies.
Data Collection and Analysis
For the selected studies, the relevant estimates of effects and their associated standard errors (SEs) were entered into an Excel spreadsheet along with other related information such as sample size, variable type, and duration for flow variables. Other information such as authors, year of publication, and country and/or region where the study was implemented was also included in the spreadsheet.
Once the data were entered for each of the selected studies, the information on sample size, effect size and SE of the effect size was used to compute the standardized effect size for each study to make the results comparable across studies. For those studies for which relevant data were not reported, we contacted the authors by email and incorporated the information they provided. Forest plots were then generated and within‐study pooled average treatment effects were computed by outcome variable.
In addition, an assessment of reporting on potential biases was conducted including (1) reporting on key aspects of selection bias and confounding, (2) reporting on spillovers of interventions to comparison groups, (3) reporting of SEs, and (4) reporting on Hawthorne effects and the collection of retrospective data.
Results
The electronic and manual searches resulted in 42,462 candidate papers. Of these, 80 studies were ultimately selected for the review after screenings to apply the selection criteria. Relevant data were extracted for analysis from these 80 studies. Overall, 1108 regression coefficients across various interventions and outcomes were included in the analysis, representing a total of 4,762,755 firms. Even though the search methods included both high‐income and developing countries, only 1 of the 80 studies included in the analysis was in a high‐income country, while the remaining 79 were in developing countries.
We discuss the results in two parts, looking at firms in manufacturing and services separately from firms (i.e., farms) in agriculture. In each case, we consider both technology adoption and other firm outcomes.
Authors' Conclusions
Overall, our results suggest that some interventions led to positive impacts on technology adoption among firms across manufacturing, services, and agriculture sectors, but given the wide variation in the time periods, contexts, and study methodologies, the results are hard to generalize. The effects of these interventions on other firm performance measures such as farm yields, firm profits, productivity, and employment were mixed.
Policy‐makers must be careful in interpreting these results as a given intervention may not work equally well across contexts and may need to be adjusted to each specific regional context. There is great need for more research on the barriers to technology adoption by firms in developing countries and interventions that may help alleviate these obstacles. One major implication for researchers from our review is that there is a need to carefully measure technology adoption.
Many researchers consider microfinance as a tool for poverty reduction. Even more, especially in post-conflict African countries, micro-financial institutions are seen as an opportunity of reconciliation. Lending from microfinance institutions to that from traditional banks and examine their respective effects upon economic growth has been practiced in some sub-Saharan countries. Considerable progress in research has been found that microfinance loans raise growth comparatively to that of traditional banks. A lot of number of researches carried out in sub-Saharan countries even in other developing countries outside of Africa did not find strong evidence that bank loans raise growth. There is, however, some evidence that bank loans do increase investment, whereas microfinance loans do not appear to do so. Differently, other researchers highlighted clearly that microfinance can provide its contribution on poverty reduction and better access to finance needed for startup micro-entrepreneurs along the world. These results suggest that microfinance loans are not primarily invested as physical capital in developing countries, but could still augment total factor productivity, whereas banks may have been financing non-productive investments. Herein, we highlighted the impact of microfinance banks on developing countries economic growth. We also indicate how microfinances system incorporated in rural areas boosted the lifestyle of poor people in Sub-Saharan Africa.
Most developing-country farms are small and engage in cooperative agriculture. Prior literature has argued that mechanisms aimed at facilitating smallholder coordination such as cooperatives are central to stimulating market participation. At the same time, cooperatives have not always been able to engage in collective action. In this paper, we conduct neutrally framed coordination games and a natural field experiment to test the effect of cheap talk among members of groundnut-producing cooperatives in Senegal. In both experiments, we ask farmers how much they intend to contribute to the group prior to them actually doing so and then, confidentially reveal aggregate intentions to other cooperative members. Based on survey and administrative data, we find that (1) revealing farmers’ intentions improves collective commercialization and this effect increases with group size and (2) learning in the lab transfers to behavior in the day-to-day environment. Implications for policy and future work are discussed.
Household-level panel data from a nationally representative sample of rural Indian households describing the adoption and profitability of high-yielding seed varieties (HYVs) associated with the Green Revolution are used to test the implications of a model incorporating learning by doing and learning spillovers. The estimates indicate that imperfect knowledge about the management of the new seeds was a significant barrier to adoption; this barrier diminished as farmer experience with the new technologies increased; own experience and neighbors' experience with HYVs significantly increased HYV profitability; and farmers do not fully incorporate the village returns to learning in making adoption decisions. Copyright 1995 by University of Chicago Press.
First, most adoption research has thus far viewed the adoption decision in dichotomous terms (adoption or nonadoption). But for many types of innovations, the interesting question may be related to the intensity of use. Second, empirical research should recognize that in many cases several innovations which have various degrees of complementarity are introduced simultaneously. It follows that adoption decisions for various innovations are interrelated. Third, many adoption models consider a rather simple economic model where the industry is a price taker in perfect competition with homogeneous inputs. However, price support schemes, food taxes and subsidies, and input and output quotas affect technological choices and diffusion processes. Fourth, the conflicting conclusions sometimes indicated by studies from different regions or countries may in many cases be the result of differing social, cultural, and institutional environments. Finally, differential adoption rates of Green Revolution technology by different socioeconomic groups are often found to disappear once the process is sufficiently advanced. But the early adopters can accumulate more wealth and use the differential in the subjective value of land to acquire more land from the laggards. The acquisition of new wealth enables further adoption and thus affects the dynamic pattern of aggregate adoption. Thus, special attention to changes in landholding patterns and wealth accumulation (as well as tenancy arrangements) is warranted. -from Authors
The authors analyze the considerations that lead policymakers to undertake extension investments as a key public responsibility, as well as the complex set of factors and intra-agency incentives that explain why different extension systems'performance vary. The authors provide a conceptual framework outlining farmers'demand for information, the welfare economic characterizations of extension services, and the organizational and political attributes that govern the performance of extension systems. They use the conceptual framework to examine several extension modalities and to analyze their likely and actual effectiveness. Specifically, the modalities reviewed include"training and visit"extension, decentralized systems,"fee-for-service"and privatized extension, and farmer-field-schools. The authors also discuss methodological issues pertaining to the assessment of extension outcomes and review the empirical literature on extension impact. They emphasize the efficiency gains that can come from locally decentralized delivery systems with incentive structures based largely on private provision that in most poorer countries is still publicly-funded. In wealthier countries, and for particular higher income farmer groups, extension systems will likely evolve into fee-for-service organizations.
Summary This study tests the null hypothesis that it is sufficient to interview only the household head to obtain accurate information on household income. Results show that using a husband's estimate of his wife's income does not produce statistically reliable results for poverty analysis. Estimates of the wife's income provided by the husband and wife are in agreement in only 6% of households. While limiting interviews to one person has the advantage of reducing the time and expense of household surveys, this appears detrimental in terms of accuracy, and may lead to incorrect conclusions on the determinants of poverty.
This paper investigates the role of social learning in the diffusion of a new agricultural technology in Ghana. We use unique data on farmers' communication patterns to define each individual's information neighborhood, the set of others from whom he might learn. Our empirical strategy is to test whether farmers adjust their inputs to align with those of their information neighbors who were surprisingly successful in previous periods. We present evidence that farmers adopt surprisingly successful neighbors' practices, conditional on many potentially confounding factors including common growing conditions, credit arrangements, clan membership, and religion. The relationship of these input adjustments to experience further supports their interpretation as resulting from social learning. In addition, we apply our methods to input choices for another crop with known technology and they correctly indicate an absence of social learning effects.
Information flows are weaker in a heterogeneous population when the performance of a new technology is sensitive to unobserved individual characteristics, preventing individuals from learning from neighbors' experiences. This characterization of social learning is tested with wheat and rice data from the Indian Green Revolution. The rice-growing regions display greater heterogeneity in growing conditions and the new rice varieties were also sensitive to unobserved farm characteristics. Wheat growers respond strongly to neighbors' experiences, as expected, while rice growers do not. Rice growers also appear to experiment more on their own land to compensate for their lack of social information.
We present evidence on how farmers' decisions to adopt a new crop relate to the adoption choices of their network of family and friends. We find the relationship to be inverse-U shaped, suggesting social effects are positive when there are few adopters in the network, and negative when there are many. We also find the adoption decisions of farmers who have better information about the new crop are less sensitive to the adoption choices of others. Finally, we find that adoption decisions are more correlated within family and friends than religion-based networks, and uncorrelated among individuals of different religions.
While worldwide investment in agricultural extension is quite substantial, there has been a relatively small body of thorough economic research of extension impact until fairly recently. Section I discusses methodological problems of measuring extension impact. Section II summarizes studies that measured the relationship between extension programs and knowledge, and adoption of particular technologies. Section III reviews studies that have sought to estimate the relationship between extension programs, farm productivity, input demand, and farm profits. Section IV summarizes the computed returns to extension reported in the studies reviewed earlier, and the final section presents conclusions. While there is convincing evidence that extension efforts can have a significant effect on output, there is limited evidence regarding the profitability of investment in extension from a social welfare perspective. -from Authors
When information is limited or costly, agents are unable to engage in optimal arbitrage. Excess price dispersion across markets
can arise, and goods may not be allocated efficiently. In this setting, information technologies may improve market performance
and increase welfare. Between 1997 and 2001, mobile phone service was introduced throughout Kerala, a state in India with
a large fishing industry. Using microlevel survey data, we show that the adoption of mobile phones by fishermen and wholesalers
was associated with a dramatic reduction in price dispersion, the complete elimination of waste, and near-perfect adherence
to the Law of One Price. Both consumer and producer welfare increased.
Production of fresh vegetables for export has grown rapidly in a number of countries in sub-Saharan Africa over the last decade. This trade brings producers and exporters based in Africa together with importers and retailers in Europe. Large retailers in Europe play a decisive role in structuring the production and processing of fresh vegetables exported from Africa. The requirements they specify for cost, quality, delivery, product variety, innovation, food safety and quality systems help top determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out. The control over the fresh vegetables trade exercised by UK supermarkets has clear consequences for inclusion and exclusion of producers and exporters of differing types, and for the long-term prospects for the fresh vegetables industry in the two major exporting countries studied, Kenya and Zimbabwe.
Contract farming is characterized by a contract between a farmer and a firm that will process and/or market the farmer's crop. It is a growing phenomenon in Africa; it has been a component of some of the most successful income generating projects for smallholder farmers; it has been a component of various schemes involving parastatal processing firms and the terms of the contracts between smallholders and parastatals have major consequences for the financial viability of the parastatals and, hence, for the macro balance picture in African economies.
This paper reviews the role of contract farming. First, we provide background information on its nature and scope. Second, we use the New Institutional Economics to discuss ways in which contracting overcomes market failures common in African agriculture. We outline the conditions that make contracting the preferred form of market organization, as well as conditions under which it should not be encouraged. Third, we discuss Kenyan experience in light of the theories presented in the previous section. Finally, we discuss the policy implications. The paper draws on secondary sources to discuss contracting in Africa generally, and on a recent survey of contracted farmers in Kenya, where the most attention is focused.
European food safety standards have increased the fixed and transactions costs of Kenyan green bean farmers while requiring
more stringent quality monitoring by exporting firms. This paired case study finds that large farms use owner equity to invest
in improved facilities. Small farms attain scale economies by joining a marketing group that spreads facility investment costs
and reduces the transaction cost to buyers of monitoring small farm performance. Green bean buyers meet the asymmetric information
problem by close monitoring, the threat of contract termination, and variable product pricing to induce compliance with the
standards.
Summary This study tests the null hypothesis that it is sufficient to interview only the household head to obtain accurate information on household income. Results show that using a husband's estimate of his wife's income does not produce statistically reliable results for poverty analysis. Estimates of the wife's income provided by the husband and wife are in agreement in only 6% of households. While limiting interviews to one person has the advantage of reducing the time and expense of household surveys, this appears detrimental in terms of accuracy, and may lead to incorrect conclusions on the determinants of poverty.
Commercialization of smallholder irrigation: The case of horticultural crops in semi-arid areas of eastern Kenya" in Private Irrigation in sub-Saharan Africa
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Cheaper to talk (than to Trust): Network Formation in Rural Kenya
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Investment in EU Private Food-safety Standards Compliance: Does it Pay Off for Small-scale Producers in Sub-Saharan Africa?
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Contract Farming in the Shadow of Competitive Markets: The Experience of Kenyan Horticulture
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Kenya's experience in promoting smallholder vegetables for European markets
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Preferential trading arrangements between Kenya and the EU: a case study of the environmental effects of the horticulture sector
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EU Safety Rules Could Destroy Horticulture: The Protocol on Good Agricultural Practices Will Have a Profound Impact on Both Large and Small-Scale Farmers, although the Biggest Impact Will Be on the Latter" Daily Nation
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