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Flexible contracting and quality upgrading under market volatility: Experimental evidence from Senegal

Author

Listed:
  • Joshua Deutschmann

    (University of Chicago)

  • Tanguy Bernard

    (BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Ouambi Yameogo

    (Islamic Development Bank)

Abstract

We conduct a randomized experiment with groundnut producers and cooperatives in Senegal to address barriers to managing food safety and complying with international quality standards. We offer producers a bundled contract combining credit, extension, and a price premium guarantee to encourage use of a new food safety technology. The contract is flexible regarding sales of output: while cooperatives offering the contract seek to aggregate members' output, farmers can seize higher price opportunities when available. We find that producers randomly offered the contract are significantly more likely to purchase the technology, sell more output via cooperatives, and are more likely to comply with international food safety standards in areas where quality would otherwise be lower due to agro-climatic conditions. Two years after our experiment, the cooperatives scaled a similar contract to all members but without a price premium and with an indirect communications strategy. Demand for the technology fell relative to the experiment, but remained persistently higher among previously-treated farmers.

Suggested Citation

  • Joshua Deutschmann & Tanguy Bernard & Ouambi Yameogo, 2026. "Flexible contracting and quality upgrading under market volatility: Experimental evidence from Senegal," Post-Print hal-05528443, HAL.
    • Handle: RePEc:hal:journl:hal-05528443
    DOI: 10.1016/j.jdeveco.2026.103752
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