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The Enforcement of Traditional Vegetable Marketing Contracts in the Eastern and Central Parts of Ethiopia

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  • Jema Haji

Abstract

This study investigates the enforcement of traditional vegetable marketing contracts between producers and traders in Ethiopia using the general conceptual framework of contract enforcement extended to capture the payment at risk. Empirical results show that despite its imperfections, compliance with contractual obligations is mainly due to mutual trust and brokers' mediation. Moreover, results demonstrate the necessity of contractual arrangements that guarantee flexibility without exposing trading partners to the risks of opportunism. A separate analysis of contract enforceability through brokers reveals that farmer's age, whether a buyer is a trader, information access and trader-specific investment have a significant positive impact while family size, frequency of transactions, dependency on the trader, duration of the relationship and distance to the trader have a significant negative impact on contract enforceability through brokers. Furthermore, pooled multinomial Logit regression analysis show that traders' non-compliance to contractual obligations are mainly due to the risks related to perishability, seasonality, illiteracy and his type. An effective enforcement of vegetable marketing contracts in the study areas may be achieved through governmental and/or private institutions interventions that target market information access, development of cooperatives and associated support programmes. Copyright 2010 The author 2010. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Jema Haji, 2010. "The Enforcement of Traditional Vegetable Marketing Contracts in the Eastern and Central Parts of Ethiopia," Journal of African Economies, Centre for the Study of African Economies, vol. 19(5), pages 768-792, November.
    • Handle: RePEc:oup:jafrec:v:19:y:2010:i:5:p:768-792
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    File URL: http://hdl.handle.net/10.1093/jae/ejq012
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    Cited by:

    1. Mao, Hui & Zhou, Li & Ifft, Jennifer & Ying, RuiYao, 2019. "Risk preferences, production contracts and technology adoption by broiler farmers in China," China Economic Review, Elsevier, vol. 54(C), pages 147-159.
    2. Enthoven, Laura & Van den Broeck, Goedele, 2023. "How to boost the local trade of participatory guarantee system (PGS)-certified produce? A value chain perspective in Huánuco, Peru," Ecological Economics, Elsevier, vol. 212(C).
    3. Hou, Jing & Chen, Feiyu, 2020. "Private Enforcement Mechanisms and Contract Stability in Agri-food Supply Chain: An Empirical Evidence from China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304586, Agricultural and Applied Economics Association.
    4. Mao, Hui & Zhou, Li & Ifft, Jennifer, 2017. "Risk Preferences, Contracts and Technology Adoption by Broiler Farmers in China," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 257248, Agricultural and Applied Economics Association.
    5. ALI, Murad & HAJI, Jema & LEGESSE, Belaineh & DEMISSE, Tinsae, 2021. "Factors Determining The Trust Of Vegetable Farmers For Intermediaries In Eastern Ethiopia," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 24(1), March.
    6. Ferto, Imre, 2012. "Contract enforcement in Hungarian agri-food chain: the case of small and medium enterprises," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134956, Agricultural Economics Society.
    7. Jing Hou & Linhai Wu & Bo Hou, 2020. "Risk Attitude, Contract Arrangements and Enforcement in Food Safety Governance: A China’s Agri-Food Supply Chain Scenario," IJERPH, MDPI, vol. 17(8), pages 1-16, April.

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