small famers and the supermarket revolution
DESCRIPTION
Johan F.M. Swinnen, University of Leuven (KUL) 14th May 2008, Royal museum for Central Africa in Tervuren, BelgiumTRANSCRIPT
S ll FSmall Farmers and theand the
Supermarket Revolution
Johan F.M. Swinnen
University of Leuven (KUL)
IFPRI Tervuren May 2009IFPRI Tervuren May 2009
The Supermarket RevolutionpThe dramatic growth of importance of The dramatic growth of importance of
d ili ( lld ili ( llmodern retailing (more generally modern retailing (more generally modern food industry and agribusinessmodern food industry and agribusiness) ) for emerging & developing countriesfor emerging & developing countriesfor emerging & developing countriesfor emerging & developing countries
Domestic growth (with FDI)Domestic growth (with FDI)F i th (th h t d )F i th (th h t d )Foreign growth (through trade)Foreign growth (through trade)
With it comes : rapid … With it comes : rapid … spread of “high standards” spread of “high standards” p gp gchanges in supply chainschanges in supply chains
The Supermarket RevolutionpFirst observed in South America in the First observed in South America in the 1990s (Reardon & co)1990s (Reardon & co)
Second half of 1990s in Central and Second half of 1990s in Central and Eastern EuropeEastern EuropeEastern Europe Eastern Europe
M tl f th t d thM tl f th t d thMore recently: further east and south More recently: further east and south
2004 Top FDI Destinations of Global Retail Chains
1.1. RussiaRussia2.2. IndiaIndia3.3. ChinaChina
4.4. SloveniaSlovenia5.5. LatviaLatvia6.6. CroatiaCroatia
Central Europe and South America are Central Europe and South America are l d “ t ” k tl d “ t ” k talready “mature” marketsalready “mature” markets
China: The Supermarket Olympics …p y p
60Around 40 %
l th
60000 Around 20% l th
40
50 annual growth between 1998 and 2002
40000
50000annual growth between 1998 and 2002
20
30 30000
10
20
10000
20000
01990 1992 1994 1996 1998 2000 2002
01990 1992 1994 1996 1998 2000 2002
Number of supermarketsSale (US Billions)
Global Supermarkets & Changes i th St t f T din the Structure of Trade
Increased exports from developing Increased exports from developing countriescountries
Increased highIncreased high--value exports from value exports from gg ppdeveloping countriesdeveloping countries
Increasingly destination is global Increasingly destination is global supermarkets in rich countriessupermarkets in rich countriespp
Changing Structure of World TradeWorld Exports Developing
Country Export
1980/81 2000/01 1980/81 2000/011980/81 2000/01 1980/81 2000/01TROPICAL products 22.0 12.7 39.2 18.9
(Cocoa tea coffee sugar )(Cocoa, tea, coffee, sugar, …)
TEMPARATE products 46.3 38.3 28.8 28.1(M t ilk i )(Meat, milk, grains, …)
SEAFOOD, FRUIT & VEGs 19.8 31.0 21.6 41.0
Other PROCESSED 11.9 17.9 10.4 12.1
(tobacco, beverages, …)Total 100.0 100.0 100.0 100.0
Global & Domestic Growth in High-Value Food
D t (G l ti t l)D t (G l ti t l)Due to (Gulati et al):Due to (Gulati et al):
1.1. Rapid income growthRapid income growth22 UrbanizationUrbanization2.2. UrbanizationUrbanization3.3. Trade liberalizationTrade liberalization
F i di t i t t (FDI)F i di t i t t (FDI)4.4. Foreign direct investments (FDI)Foreign direct investments (FDI)
SuperMarkets & Standards
High standards in developing High standards in developing t it icountries countries
T kT k•• To serve markets overseas To serve markets overseas •• To serve highTo serve high--standards domestic marketsstandards domestic markets•• To reduce transaction costs in regional To reduce transaction costs in regional
distributiondistribution•• To harmonize production and processing To harmonize production and processing
standards across subsidiariesstandards across subsidiaries
SuperMarkets & Standards
PUBLIC & PRIVATE t d dPUBLIC & PRIVATE t d d•• PUBLIC & PRIVATE standardsPUBLIC & PRIVATE standards
•• Standards :Standards :
•• size, color, …size, color, …•• SPS, pesticide residue, …SPS, pesticide residue, …•• Child labor, environmental effects, …Child labor, environmental effects, …•• Traceability, …Traceability, …y,y,
Increasing standards & trade conflicts
Figure: Notification of new SPS-measures to the WTO, 1995-2005
Source: Henson, 2006
… and Small Farmers ?
Concern 1 (exclusion: in or out ?):Concern 1 (exclusion: in or out ?): will will they be able to cope with demands by they be able to cope with demands by y p yy p ysupermarkets ?supermarkets ?
Concern 2:Concern 2: if they are “in” will they if they are “in” will they benefit or will the companies extract allbenefit or will the companies extract allbenefit, or will the companies extract all benefit, or will the companies extract all the rents ?the rents ?
The Exclusion ConcernSmall farmers may be (further) Small farmers may be (further)
i li d bi li d bmarginalized becausemarginalized because : : small farms fail to meet the small farms fail to meet the standard standard requirementsrequirements to sell to these chainsto sell to these chainssmall farms aresmall farms are constrained financiallyconstrained financiallysmall farms are small farms are constrained financiallyconstrained financially(internally and/or externally) for making (internally and/or externally) for making necessary investmentsnecessary investmentsnecessary investments necessary investments fixed component in fixed component in transaction coststransaction costsmakes it more costly to deal with manymakes it more costly to deal with manymakes it more costly to deal with many makes it more costly to deal with many small farmers than with a few large farmssmall farmers than with a few large farms
Evidence ?
Initial studies pointed mostly at problems: Initial studies pointed mostly at problems: growth of estate production and small growth of estate production and small farmer exclusion farmer exclusion
(eg Reardon and Berdegué, 2001; Gibson, 2003; Minot (eg Reardon and Berdegué, 2001; Gibson, 2003; Minot and Ngigi 2004; Reardon and Weatherspon 2003)and Ngigi 2004; Reardon and Weatherspon 2003)and Ngigi, 2004; Reardon and Weatherspon, 2003)and Ngigi, 2004; Reardon and Weatherspon, 2003)
Evidence ?
Initial studies pointed mostly at problems: growth Initial studies pointed mostly at problems: growth of estate production and small farmer exclusionof estate production and small farmer exclusionof estate production and small farmer exclusion of estate production and small farmer exclusion
Growing number of recent studies present a muchGrowing number of recent studies present a muchGrowing number of recent studies present a much Growing number of recent studies present a much moremore diverse picture, often contradicting intuition diverse picture, often contradicting intuition and identifying benefits and opportunitiesand identifying benefits and opportunitiesand identifying benefits and opportunitiesand identifying benefits and opportunities
Importance of attention to :Importance of attention to :Importance of attention to : Importance of attention to : organization of the supply chain, including organization of the supply chain, including vertical coordination and contractingvertical coordination and contractingvertical coordination and contractingvertical coordination and contractinglabor market effectslabor market effects
China : Supermarket Olympicsp y pBooming Supermarkets (with rapid F&V Booming Supermarkets (with rapid F&V
consumption expansion) :consumption expansion) :consumption expansion) :consumption expansion) :Sourcing from 50 million farmersSourcing from 50 million farmersThrough 5 million tradersThrough 5 million tradersMost very small (both traders and farmers)Most very small (both traders and farmers)Increasingly poor and marginal farmers are Increasingly poor and marginal farmers are pulled into the horticultural chain aspulled into the horticultural chain aspulled into the horticultural chain as pulled into the horticultural chain as production area expands into poorer areas production area expands into poorer areas further away from consumption centrafurther away from consumption centra
Process (so far) is very much proProcess (so far) is very much pro--poor and poor and propro--smallsmallpropro smallsmall
Worst Case Scenario
Poverty level at national level (poverty line at Poverty level at national level (poverty line at y (p yy (p y0.42$/capita): 70%; rural areas: 77% 0.42$/capita): 70%; rural areas: 77% 50% of population unable to read and write50% of population unable to read and write45% of children under three growth retarded45% of children under three growth retardedRanked last in index of competitiveness in Ranked last in index of competitiveness in pp2000 2000 -- Disadvantage in locationDisadvantage in locationProcessor / trader of FFV is a monopolyProcessor / trader of FFV is a monopoly
Worst Case Scenario: Madagascar F & VMadagascar F & V
10,000 smallholders 10,000 smallholders ,,produce highproduce high--standard vegetables standard vegetables for EU Supermarketsfor EU Supermarketsfor EU Supermarkets for EU Supermarkets under contract with monopoly exporterunder contract with monopoly exporter
sophisticated EU standards with sophisticated EU standards with assistance of large number of privateassistance of large number of privateassistance of large number of privateassistance of large number of private--sector trained extension agentssector trained extension agents
=> pro=> pro--poor and propoor and pro--small farmerssmall farmers
Impact on welfare of smallholders i M din Madagascar
Length ofLength of lean periodslean periods (months):(months):Length of Length of lean periodslean periods (months):(months):-- For farmers with contract: 1.7For farmers with contract: 1.7-- For farmers before they had contract: 3.7For farmers before they had contract: 3.7For farmers before they had contract: 3.7For farmers before they had contract: 3.7-- For similar farmers without contract: 4.3For similar farmers without contract: 4.3
Contract Contract incomeincome: about 50% of their total : about 50% of their total monetary income monetary income Contract Contract priceprice is higher than the market priceis higher than the market price
Staple crop (rice) Staple crop (rice) productivityproductivity increase (+66%)increase (+66%)
Household participation in High Value Vegetable Exports from SenegalVegetable Exports from Senegal
45%
30%35%40%
ehol
ds
15%20%25%
re o
f hou
se
0%5%
10%15%
Shar
0%1990 1992 1994 1996 1998 2000 2002 2004
Year
contract-farming wage employment total
Supply Chains & Poverty F&V in Senegal (2004)F&V in Senegal (2004)
7,000)
4,000
5,000
6,00010
00 F
CFA)
1,000
2,000
3,000
inco
me
(,1
0hh withoutcontrant &
without agro-
hh with agro-industrial
employment
hh with contract hh with contractand agro-industrialwithout agro
industrialemployment
employment industrialemployment
Total income Agriculture Wage employmentTotal income Agriculture Wage employmentSelf-employment Other sources
Important FactorsImportant Factors
Labor MarketsLabor Markets
Vertical CoordinationVertical Coordination
Supermarket/Processor Motivation for Vertical Coordinationfor Vertical Coordination
Problem:Problem: processors/traders/retailers face lack ofprocessors/traders/retailers face lack ofProblem:Problem: processors/traders/retailers face lack of processors/traders/retailers face lack of supplies, because farms are not able to supply supplies, because farms are not able to supply the type/quality of products required the type/quality of products required Reason:Reason: factor(*) market constraints (inputs, factor(*) market constraints (inputs, credit, technology, …)credit, technology, …)SolutionSolution requires some form of contracting :requires some form of contracting :
Price/qualityPrice/qualitySupplier assistance : inputs, technology, Supplier assistance : inputs, technology, extension services, management, …extension services, management, …
–– (*) output market with agribusiness(*) output market with agribusiness
Farmers’ motivations for VC
Sub Sahara AfricaR f t ti Madagasc SenegalReasons for contracting (%)
Madagasc. Senegal 2004 2005
Stable prices 19 45Stable prices 19 45Higher income 17 15Higher prices 11g pGuaranteed sales 66Access to inputs & credit 60 63Access new technologies 55 17Stable income 66 30
Source: Maertens et al., 2006; Minten et al., 2006
Income during lean period 72 37
“69% of 35 billion $ credit in the Brazilian “69% of 35 billion $ credit in the Brazilian agriagri food system is supplyfood system is supply chain credit”chain credit”agriagri--food system is supplyfood system is supply--chain credit”chain credit”
Banco do Brasil (2004)Banco do Brasil (2004)
“Private agricultural marketing companies“Private agricultural marketing companiesPrivate agricultural marketing companies Private agricultural marketing companies have become dominant providers of have become dominant providers of
smallholder input credit in Subsmallholder input credit in Sub--SaharanSaharansmallholder input credit in Subsmallholder input credit in Sub Saharan Saharan Africa. In various countries of the region, Africa. In various countries of the region,
they are today in practice the solethey are today in practice the solethey are today in practice the sole they are today in practice the sole providers of seasonal input advances to providers of seasonal input advances to
the smallthe small--scale farming community.”scale farming community.”the smallthe small scale farming community.scale farming community.IFAD (2003, p.5)IFAD (2003, p.5)
Vertical coordination in modern l h isupply chains …
COMMERCIAL BROILERCOMMERCIAL BROILER production production Thailand : 100%Thailand : 100%Philippines : 80%Philippines : 80%
DAIRYDAIRY d tid tiDAIRYDAIRY productionproductionTransition countries : growing rapidly Transition countries : growing rapidly India (modern commercial): growing rapidlyIndia (modern commercial): growing rapidly
COTTONCOTTON production production Central Asia : very extensiveCentral Asia : very extensive
(71% of all small farms in Kazakhstan)(71% of all small farms in Kazakhstan)(71% of all small farms in Kazakhstan)(71% of all small farms in Kazakhstan)Africa : very extensiveAfrica : very extensive
HIGH VALUE VEGETABLESHIGH VALUE VEGETABLES exports in Africaexports in AfricappMadagascar : 100% on contract Madagascar : 100% on contract Senegal : 100% on contractSenegal : 100% on contract
Profits & Contracts in Asia Broiler farmers ($/kg 2002)
Smallholder <10,000
Independent Contract
Phili i 0 03 0 08Philipines 0.03 0.08
Thailand 0.02 0.03
Source: Gulati et al., 2005
Farm assistance with VC Examples :
Input supply programsInput supply programsInput supply programsInput supply programsTrade creditTrade creditInvestment assistance programInvestment assistance programBank loan guarantee programsBank loan guarantee programsExtension services (technology and Extension services (technology and management)management)..........Variations reflect market Variations reflect market imperfections, investment security, …imperfections, investment security, …
Rent Distribution & Welfare
The The shortage of quality suppliesshortage of quality supplies & & problems of problems of contract enforcementcontract enforcement strengthen bargaining strengthen bargaining position of (small) farmsposition of (small) farms
> EFFICIENCY PREMIA> EFFICIENCY PREMIA=> EFFICIENCY PREMIA => EFFICIENCY PREMIA (Swinnen & Vandeplas, 2007)(Swinnen & Vandeplas, 2007)
Should take into account Should take into account LABOR marketLABOR market effects effects of shift to large farms !of shift to large farms !of shift to large farms ! of shift to large farms ! => Important potential equity effects …=> Important potential equity effects …
Importance of Importance of COMPETITIONCOMPETITION ! !
Supermarkets modern supplySupermarkets, modern supply chains & competition
They are likely to They are likely to increaseincrease competition competition for farm supplies in developingfor farm supplies in developingfor farm supplies in developing for farm supplies in developing countries ….countries ….
Pay a Pay a higherhigher price than competition (= price than competition (= efficiency premium)efficiency premium)
““Uttar Pradesh closed 10 new Reliance Uttar Pradesh closed 10 new Reliance supermarkets last week after protests fromsupermarkets last week after protests fromsupermarkets last week after protests from supermarkets last week after protests from small traders …. small traders …. Hundreds of Indian farmers gathered today byHundreds of Indian farmers gathered today byHundreds of Indian farmers gathered today by Hundreds of Indian farmers gathered today by an agricultural collection depot run by a top an agricultural collection depot run by a top national retailer to call for Uttar Pradesh to national retailer to call for Uttar Pradesh to ffreopen Westernreopen Western--style supermarkets closed last style supermarkets closed last week. …week. …In a demonstration in favour of the new In a demonstration in favour of the new supermarkets, the farmers shouted “Reopen supermarkets, the farmers shouted “Reopen R l ”‘ d “L l f ”R l ”‘ d “L l f ”Reliance”‘ and “Long live farmers unity”. … Reliance”‘ and “Long live farmers unity”. …
Reuters, 28 August 2007Reuters, 28 August 2007
“[T]his abrupt decision … is certainly not in “[T]his abrupt decision … is certainly not in the interest of farmers ” said farm leaderthe interest of farmers ” said farm leaderthe interest of farmers, said farm leader the interest of farmers, said farm leader Ram Chandra Verma. The Reliance centre Ram Chandra Verma. The Reliance centre buys up farm produce from local farmersbuys up farm produce from local farmersbuys up farm produce from local farmers. buys up farm produce from local farmers. For many farmers it saves them money For many farmers it saves them money because they no longer have to go throughbecause they no longer have to go throughbecause they no longer have to go through because they no longer have to go through traditional middlemen to sell their goods.”traditional middlemen to sell their goods.”
Reuters, 28 August 2007Reuters, 28 August 2007
Implications for Public Policy1.1. Realizing the importance of modern Realizing the importance of modern
supply chainssupply chainssupply chains supply chains
E bli & ti l ti i t tE bli & ti l ti i t t2.2. Enabling & stimulating investmentsEnabling & stimulating investments
3.3. Improving efficiency, transparency, and Improving efficiency, transparency, and equity in supply chainequity in supply chainq y pp yq y pp y
44 Rethinking the role of the governmentRethinking the role of the government4.4. Rethinking the role of the government Rethinking the role of the government and policyand policy--making ?making ?
Implications I: Enabling and stimulating investments
Create the right conditions forCreate the right conditions forCreate the right conditions for Create the right conditions for stimulating investment. stimulating investment.
Ensure macroEnsure macro--economic stability. economic stability.
Implications II: Improving efficiency, transparency and equity in supply chainstransparency, and equity in supply chains
R dR d t ti tt ti tReduce Reduce transaction coststransaction costs
Enforce Enforce competitioncompetition
Invest in higherInvest in higher qualityquality
EmpowerEmpower farmers farmers
Implications III : Rethinking the role of the government and policy-makinggovernment and policy-making
Policy analysis and information gatheringPolicy analysis and information gatheringPolicy analysis and information gathering. Policy analysis and information gathering.
Rethinking traditional public investments. Rethinking traditional public investments.
PublicPublic––private partnerships: consider private VC private partnerships: consider private VC as part of the solution not the problemas part of the solution not the problemas part of the solution, not the problem. as part of the solution, not the problem.
Innovative finance instruments.Innovative finance instruments.Innovative finance instruments. Innovative finance instruments.
SupplySupply--chain development as part of a wider chain development as part of a wider l d l t t tl d l t t trural development strategy. rural development strategy.
h dThe end
Why work with small suppliers ?y ppIn some cases processors have In some cases processors have no choiceno choice
P fP f ii f li t df li t d i ki kProcessors prefer Processors prefer mixmix of suppliers to spread of suppliers to spread riskrisk
EnforcementEnforcement costs may be lowercosts may be lower
“processing companies stressed that “processing companies stressed that willingness willingness to learnto learn, take on board advise, and a professional , take on board advise, and a professional attitude were more important than size inattitude were more important than size inattitude were more important than size in attitude were more important than size in establishing fruitful farmestablishing fruitful farm--processor relationship” processor relationship” (CIS study)(CIS study)
CostCost advantages (eg labor intensive products)advantages (eg labor intensive products)Access to Access to landland (differs between countries)(differs between countries)E diff iE diff i iiExogenous differences in Exogenous differences in company strategiescompany strategies
Competition is ImportantCompetition is Important
Induces horizontal spillovers and the Induces horizontal spillovers and the spread of farm assistance packagesspread of farm assistance packagesspread of farm assistance packages spread of farm assistance packages
C t i ( t ti l) t t ti iC t i ( t ti l) t t ti iConstrains (potential) rent extraction in Constrains (potential) rent extraction in chain chain
Competition effect of supermarkets may Competition effect of supermarkets may p p yp p ybe quite counterbe quite counter--intuitiveintuitive
Implications III : Rethinking the role of the government and policy-makinggovernment and policy-making
Innovative finance instrumentsInnovative finance instrumentsInnovative finance instruments.Innovative finance instruments.SupplySupply--chain development as part of chain development as part of
id l d lid l d la wider rural development strategy.a wider rural development strategy.
Cotton Central AsiaAnnual Growth Rate (%)Annual Growth Rate (%)
K kh K U b k T jikKazakh Kyrgyz Uzbek Tajik
Harvested Area (Ha)Harvested Area (Ha)1993 – 1998 12.3 6.0 -1.7 3.71993 2003 5 8 7 6 1 7 0 11993 - 2003 5.8 7.6 -1.7 -0.1
Baled Cotton Production (1000 MTs)1993 1998 12 6 20 4 2 7 0 41993 – 1998 12.6 20.4 -2.7 0.41993 - 2003 5.4 25.9 -2.6 -3.5
Cotton Price $550 $450 $200 $165
VC farm assistance : Dairy companies in CEE (Bulgaria Slovakia Poland)in CEE (Bulgaria, Slovakia, Poland) Credit Inputs Extension Vet. Bank Totalp
PL 50 67 50 0 50 43 PL 50 67 50 0 50 431994 SK 0 0 83 17 17 23 BG 9 18 9 0 0 7 PL 83 100 83 17 83 731998 SK 17 17 83 17 33 33
BG 45 64 18 18 18 33 BG 45 64 18 18 18 33 PL 83 100 83 17 83 732002 SK 100 33 83 17 50 572002 SK 100 33 83 17 50 57 BG 82 91 73 18 36 60
Reforms and Vertical CoordinationReforms and Vertical Coordination(% farm assistance programs in dairy)
708090
view
ed
R2 = 0.9309
405060
e (%
inte
rvm
pani
es)
102030
assi
stan
ce com
02 2.5 3 3.5 4
reformprogress(EBRD)
a
reform progress (EBRD)
Farm assistance by food companies in CIScompanies in CIS
(Armenia, Georgia, Moldova, Russia, & Ukraine)
% of firms% of firms % of farms% of farmsCreditCredit 4343 5151Prompt paymentsPrompt payments 4242 8787
Physical inputsPhysical inputs 3636 5353Physical inputsPhysical inputs 3636 5353
Quality controlQuality control 3434 7878
Agronomic SupportAgronomic Support 2121 8181
Farm loan guaranteesFarm loan guarantees 2121 1515Farm loan guaranteesFarm loan guarantees 2121 1515
Investment loansInvestment loans 66 00
Farm assistance by cotton gins in K kh t (2003)Kazakhstan (2003)
% of FARMERS% of FARMERS% of FARMERS% of FARMERSCreditCredit 8989WaterWater 7373Water Water 7373
SeedsSeeds 6565
FertilizerFertilizer 4040
Agronomic SupportAgronomic Support 44Agronomic SupportAgronomic Support 44
Farm loan guaranteesFarm loan guarantees 00
Investment loansInvestment loans 00
Efficiency EffectsEfficiency EffectsImportant Important DirectDirect Effects :Effects :
Enhanced QUALITY (& higher PRICES)Enhanced QUALITY (& higher PRICES)Increased PRODUCTIVITYIncreased PRODUCTIVITYIncreased INVESTMENTSIncreased INVESTMENTS
Important Important IndirectIndirect Effects: Effects: SpilloversSpilloversContract replication by other companiesContract replication by other companiesContract replication by other companiesContract replication by other companiesFarm assistance replicationFarm assistance replicationH h ld l l illH h ld l l illHousehold level spilloversHousehold level spillovers
Change in Qualityg Q yDairy in Poland 1996-2001
8090
100
otal
(%)
Mlekpol
506070
s Milk
in T
o p
Mleczarnia
Kurpie
M
203040
Extr
a C
lass Mazowsze
ICC Paslek
Warmia Dairy
010
1996 1998 2001Shar
e of
ES
Effect on Investment :Farm cooling equipment in
Poland 1995-2003Poland 1995 2003
90
100
60
70
80
h ow
n c.
t. (%
)
Mlekpol
40
50
60
supp
liers
with
MlekpolLowiczeMazowszeKurpie
10
20
30
Shar
e of
s
01995 1998 2001 2003
Contracting and Costs in INDIA (Rs/ton)
CONTRACT farming NON CONTRACT f i
Commodityfarming
Produc-tion cost
Transac-tion cost
TOTAL COST
Produc-tion cost
Transac-tion cost
TOTAL COST
Milk 5,586 100 5,686 5,728 1,442 7,170
Broiler 808 38 846 27,322 90 27,412
Vegetable 1,485 35 1,520 1,630 437 2,067
Source: Birthal et al., 2005
Profits & Contracts in Asia Broiler farmers ($/kg 2002)
Smallholder <10,000
Independent Contract
Phili i 0 03 0 08Philipines 0.03 0.08
Thailand 0.02 0.03
Source: Gulati et al., 2005
Household Spillover EffectsReduced Reduced RISKRISK (guaranteed price for (guaranteed price for contracted crop) in absence of insurance contracted crop) in absence of insurance p)p)marketsmarketsImproved Improved ACCESS TO CREDITACCESS TO CREDIT (cash for (cash for pp ((contracted crop) with imperfect capital contracted crop) with imperfect capital marketsmarketsIncreased productivity of nonIncreased productivity of non--contracted contracted activities, through improved activities, through improved MANAGEMENT & INPUT USEMANAGEMENT & INPUT USEMANAGEMENT & INPUT USEMANAGEMENT & INPUT USE
=> Positive effects found in several studies=> Positive effects found in several studies
Impact on small farms –pPoland dairy
404550
%)
253035
of fa
rms
(%
19952000
5101520
Shar
e o 2000
05
1-4 5-10 10-15 15-20 20-25
Herd size
Quality Control and Rents in Kazak Cotton
Q45: Do you trust the quality assessment as fair and honest?honest?
Yes, always8,0%
Never33,3%
Yes, alwaysNot alwaysNever
Not always58,7%