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Can Risk Averse Competitive Input Providers Serve Farmers Efficiently in Developing Countries

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  • Paul Makdissi

    ()
    (Department of Economics, University of Ottawa)

  • Quentin Wodon

    ()
    (AFTPM, The World Bank)

Abstract

Under price ceilings and quality floors for agricultural inputs in cash crop sectors in developing countries where credit markets are weak, imperfect information on the ability of farmers to pay for their inputs at the end of the cropping season may lead the decentralized production of those inputs by risk averse private input providers to be inefficient. A coordinating agency and/or subsidies for new farmers could help to produce and distribute more agricultural inputs, thereby increasing the profits for input providers while also enabling more farmers to produce the crops that are key to their livelihood.

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Bibliographic Info

Paper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0808E.

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Length: 12 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:ott:wpaper:0808e

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Keywords: Farm inputs; Risk Aversion; Price Control; Public Good;

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  1. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  2. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
  3. Poulton, Colin & Gibbon, Peter & Hanyani-Mlambo, Benjamine & Kydd, Jonathan & Maro, Wilbald & Larsen, Marianne Nylandsted & Osorio, Afonso & Tschirley, David & Zulu, Ballard, 2004. "Competition and Coordination in Liberalized African Cotton Market Systems," World Development, Elsevier, vol. 32(3), pages 519-536, March.
  4. Akiyama, Takamasa & Baffes, John & Larson, Donald F. & Varangis, Panos, 2003. "Commodity market reform in Africa : some recent experience," Policy Research Working Paper Series 2995, The World Bank.
  5. Wodon, Quentin & Velez, Eduardo, 2001. "Poverty and Inequality," MPRA Paper 12307, University Library of Munich, Germany.
  6. Badiane, Ousmane & Ghura, Dhaneshwar & Goreux, Louis & Masson, Paul, 2002. "Cotton sector strategies in West and Central Africa," Policy Research Working Paper Series 2867, The World Bank.
  7. Stephen R. Boucher & Michael R. Carter & Catherine Guirkinger, 2008. "Risk Rationing and Wealth Effects in Credit Markets: Theory and Implications for Agricultural Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 409-423.
  8. Paul Makdissi & Cyril Téjédo, 2004. "Un effet externe positif à l'embauche. L'amélioration de la connaissance de la qualité des travailleurs," Revue économique, Presses de Sciences-Po, vol. 55(1), pages 93-102.
  9. McCall, Brian P., 1991. "A dynamic model of occupational choice," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 387-408, April.
  10. Makdissi Paul & Wodon Quentin, 2005. "The Impact on Farmers of Privatizing Parastatal Agricultural Monopsonies," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(2), pages 1-11, September.
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