Effectiveness of Auctions in Securing Price Support for Farmers: The Case of a Grain Market in India

This paper reviews rice procurement operations of Government of India from the standpoints of cost of procurement as well as effectiveness in supporting farmers’ incomes. The two channels in use for procuring rice till 2015, were custom milling of rice and levy. In the first, the government bought paddy directly from farmers at the minimum support price (MSP) and got it milled from private millers; while in the second, it purchased rice from private millers at a pre-announced levy price thus providing indirect price support to farmers. Secondary data reveal that levy, despite implying lower cost of procurement was discriminated against till about a decade back and eventually abolished in 2015 in favor of custom milling, better trusted to provide minimum price support. We analyze data from auctions of paddy from a year when levy was still important to investigate its impact on farmers’ revenues. We use semi-nonparametric estimates of millers’ values to simulate farmers’ expected revenues and find these to be rather close to the MSP; a closer analysis shows that bidder competition is critical to this result. Finally, we use our estimates to quantify the impact of change in levy price on farmers’ revenues and use this to discuss ways to revive the levy channel.

Japanese Consumers’ Willingness to Pay for Environmentally Friendly Farming Produce Based on Consumer Trustfulness

In the past decade, the market share of environmentally friendly farming (EFF) produce in Japan has witnessed relatively rapid growth. However, consumer awareness and purchasing experience of this agricultural produce are still lagging. To study how awareness of EFF produce influences consumer psychology and purchase decisions, we use ordered logistic regression and choice experiments to analyze 600 survey responses collected through online questionnaires. The results show that information from friends and family can have a positive influence on Japanese consumers’ trust in EFF produce. Consumers also show a significant preference for EFF produce in the short term after receiving information about it. By setting up a control group for comparison, we find that, in addition to information, consumer education and income also positively and significantly affect the decision to purchase EFF produce. This study presents a unique perspective between information and consumer decision-making and provides targeted solutions for the promotional and marketing strategy problems faced by EFF produce sellers in Japan. We argue that strengthening regional publicity methods such as community events can enhance EFF producers’ marketing strategies.

Enabling the Environment for Private Sector Investment: Impact on Food Security and Poverty

Millions of people worldwide live in extreme poverty, which has an adverse effect on global food security. Research shows that growth in the agricultural labor sector has twice the impact on poverty compared to growth in other labor sectors. To that end, we examine some of the enabling factors of private sector investment to increase food security and reduce poverty: innovative output, intellectual property rights innovation, gender-sensitive land tenure, creation of new businesses, openness to trade, government institutional flexibility, access to credit, inclusion of new sectors, income diversification, public-private partnerships, infrastructure improvements, payments for eco-system services, and climate-smart innovation. Developing policies that improve food security will help to reduce poverty.

Does the Contract Type Matter? Impact of Marketing and Production Contracts on Cashew Farmers’ Farm Performance in Ghana

Many studies show that participation in contract farming has positive impacts on farm productivity and incomes. Most of the literature, however, does not take into account that contracts vary in their specifications, making empirical evidence scarce on the diverse impacts of different types of contracts. In this study, we investigate the driving forces of participation in marketing and production contracts, relative to spot markets. We also study the extent to which different contract types add additional benefits to smallholder farmers, using recent survey data of 389 cashew farmers in Ghana. To account for selection bias arising from observed and unobserved factors, we apply a multinomial endogenous switching regression method and implement a counterfactual analysis. The empirical results demonstrate that farmers who participate in production contracts obtain significantly higher cashew yields, cashew net revenues, and are more food secure compared to spot market farmers. We also find substantial heterogeneity in the impact of marketing and production contracts across scale of operation. Small sized farms that participate in production contracts tend to benefit the most. Marketing contracts, however, do not appear to benefit cashew farmers.

Land Policy and Food Prices: Evidence from a Land Consolidation Program in Rwanda

Rwanda’s “Crop Intensification Program (CIP)” is primarily a land consolidation program aimed at improving agricultural productivity and food security. The program, which began in 2007, focuses on monocropping and commercialization of six priority crops: maize, wheat, rice, white potato, beans, and cassava. CIP has facilitated easy access to improved seed stocks, fertilizer, extension services, and postharvest handling and storage services. Although studies have documented the impact of CIP on changes in farm yield, incomes, and productivity, less is known about its impact on food prices. In this study, we examine the crop-food price differences in intensive monocropped CIP and non-intensive monocropped CIP zones in Rwanda. Specifically, the study evaluates price variations of beans and maize along with complementary food crops in intensive and non-intensive monocropped zones before and after the introduction of the CIP policy. We find that the CIP policy is not associated with differences in CIP crop prices between the intensive and non-intensive monocropped zones. Over time, prices increased for CIP crops but generally, the crop prices in the two zones were cointegrated. Prices for non-CIP crops in the two different zones did show price differentials prior to the implementation of CIP, with the prices in intensive monocropped zones being greater than in the non-intensive monocropped zones. Moreover, the prices in intensive areas are cointegrated with prices in non-intensive areas for maize and beans and these prices are converging. This indicates that farmers who intensively produced one CIP crop were able to go to the market and purchase other food crops and that price differences between zones have decreased over time, potentially making the CIP intensive farmers better off.

Rwanda’s Commercialization of Smallholder Agriculture: Implications for Rural Food Production and Household Food Choices

Rwanda has experienced exceptional economic growth since 2000 despite more than 60% of the predominately-agrarian population living on less than $1.25 a day. Approximately 76% of the country’s working population are engaged in agricultural production, which makes up about one-third of the national economy. Agriculture is also an important source of foreign exchange, making up about 63% of the value of Rwanda’s exports. An important component of household diets – food produced on subsistence agriculture parcels averaging 0.6 ha – faces the challenge by government and private sector development to replace subsistence farming with a value-creating market-oriented food sector. A complex set of relationships across public incentives and programs encourages participation in markets. Designed to promote wealth, the Crop Intensification Program (CIP) has increased access to land, inputs, extension services, markets, supply chains, etc. Wealth and access to land are the dominant predictors of the ability to participate in markets and the extent of participation. For example, smallholders producing a diversity of crops are more likely to sell in markets. Within the confluence of competing policy objectives and market forces, further research is necessary to understand the household-level tradeoffs of both producers and consumers along the food value chain.

Building Public Will for Climate-Smart Agriculture in Uganda: Prescriptions for Industry and Policy

The global policy community has largely converged on climate-smart agriculture as a solution to various problems driven by climate change, but mass adoption of the crucial innovations presents challenges – particularly in the developing world. Widespread, meaningful, and rapid adoption of climate-smart agriculture will require an appropriate enabling environment. This study uses the political will and public will approach to identify the obstacles and opportunities for upscaling of climate-smart agriculture innovations. In 2015 and 2018, two rounds of semi-structured stakeholder and expert interviews conducted by researchers in Uganda identified four relevant obstacle categories: agricultural extension; communication infrastructure; basic and agricultural infrastructure; and other incentives and disincentives. These categories are related to the five definitional components of public will to reveal pathways for enabling social change. Importantly, both infrastructure and appropriate incentives are necessary for diffusion and then continued use of climate-smart agriculture innovations, often in interrelated ways. The study concludes with a detailed discussion of the implications for industry, government, and donors.