Finding Missing Markets (and a Disturbing Epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya
AbstractIn much of the developing world, many farmers grow crops for local or personal consumption despite export options which appear to be more profitable. Thus many conjecture that one or several markets are missing. We report here on a randomized controlled trial conducted by DrumNet in Kenya that attempts to help farmers adopt and market export crops. DrumNet provides smallholder farmers with information about how to switch to export crops, makes in-kind loans for the purchase of the agricultural inputs, and provides marketing services by facilitating the transaction with exporters. The experimental evaluation design randomly assigns pre-existing farmer self-help groups to one of three groups: (1) a treatment group that receives all DrumNet services, (2) a treatment group that receives all DrumNet services except credit, or (3) a control group. After one year, DrumNet services led to an increase in production of export oriented crops and lower marketing costs; this translated into household income gains for new adopters. However, one year after the study ended, the exporter refused to continue buying the cash crops from the farmers because the conditions of the farms did not satisfy European export requirements. DrumNet collapsed in this region as farmers were forced to sell to middlemen and defaulted on their loans. The risk of such events may explain, at least partly, why many seemingly more profitable export crops are not adopted.
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Bibliographic InfoPaper provided by Yale University, Department of Economics in its series Working Papers with number 56.
Date of creation: Dec 2008
Date of revision:
Other versions of this item:
- Nava Ashraf & Xavier Giné & Dean Karlan, 2009. "Finding Missing Markets (and a Disturbing Epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 973-990.
- Ashraf, Nava & Gine, Xavier & Karlan, Dean, 2008. "Finding missing markets (and a disturbing epilogue) : evidence from an export crop adoption and marketing intervention in Kenya," Policy Research Working Paper Series 4477, The World Bank.
- Ashraf, Nava & Giné, Xavier & Karlan, Dean S., 2009. "Finding Missing Markets (and a disturbing epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya," CEPR Discussion Papers 7133, C.E.P.R. Discussion Papers.
- Nava Ashraf & Xavier Giné & Dean Karlan, 2008. "Finding Missing Markets (and a disturbing epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya," Working Papers 967, Economic Growth Center, Yale University.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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