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

Author

Listed:
  • 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.

Suggested Citation

  • Paul Makdissi & Quentin Wodon, 2008. "Can Risk Averse Competitive Input Providers Serve Farmers Efficiently in Developing Countries," Working Papers 0808E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:0808e
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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