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

57 Pages Posted: 21 Sep 2020

See all articles by Ruth Vargas Hill

Ruth Vargas Hill

World Bank

Eduardo Maruyama

International Food Policy Research Institute (IFPRI)

Markus Olapade

affiliation not provided to SSRN

Markus Frölich

Universität Mannheim, Chair of Econometrics

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.

Keywords: rural producer organizations, smallholder farmers, cash constraints, asymmetric information, Uganda

JEL Classification: D71, O12, Q13

Suggested Citation

Vargas Hill, Ruth and Maruyama, Eduardo and Olapade, Markus and Frölich, Markus, Strengthening Producer Organizations to Increase Market Access of Smallholder Farmers in Uganda. IZA Discussion Paper No. 13703, Available at SSRN: https://ssrn.com/abstract=3695404 or http://dx.doi.org/10.2139/ssrn.3695404

Ruth Vargas Hill (Contact Author)

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Eduardo Maruyama

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Markus Olapade

affiliation not provided to SSRN

Markus Frölich

Universität Mannheim, Chair of Econometrics ( email )

L7, 3-5
68131 Mannheim
D-Mannheim, 68131
Germany

HOME PAGE: http://froelich.vwl.uni-mannheim.de

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