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Strengthening Producer Organizations to Increase Market Access of Smallholder Farmers in Uganda

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  • Vargas Hill, Ruth

    (World Bank)

  • Maruyama, Eduardo

    (IFPRI, International Food Policy Research Institute)

  • Olapade, Markus

    (Center for Evaluation and Development (C4ED))

  • Frölich, Markus

    (University of Mannheim)

Abstract

Smallholder agriculture in Sub-Saharan Africa is largely exposed to pervasive market failures, translating into missed opportunities and sub-optimal economic behavior. These failures can partly be traced to the importance of economies of scale in procuring inputs and marketing produce, where smallholders face disproportionately high transaction costs. Producer organizations could help to lessen transaction costs, however, only few farmers in Uganda sell through them. We introduce two interventions aimed at promoting marketing via producer organizations: Cash-on-Delivery (CoD) and Information-on-Sales (IoS), and analyze their impacts in an RCT design: We find that providing cash-on-delivery increases the probability that a member chooses to sell through the group, and hence the volumes bulked by each group. This increase in volumes appears to have enabled groups to secure higher prices for their produce. No significant effect could be found for the Information on Sales intervention, though.

Suggested Citation

  • Vargas Hill, Ruth & Maruyama, Eduardo & Olapade, Markus & Frölich, Markus, 2020. "Strengthening Producer Organizations to Increase Market Access of Smallholder Farmers in Uganda," IZA Discussion Papers 13703, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13703
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    References listed on IDEAS

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    More about this item

    Keywords

    rural producer organizations; smallholder farmers; cash constraints; asymmetric information; Uganda;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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