Improving Market Access for Farmers: Evidence from East Africa

Project Information

AGRIMKT

Grant agreement ID: 851961

DOI

10.3030/851961

EC signature date 1 June 2020

Start date 1 January 2021

End date 31 August 2026

Funded under

• EXCELLENT SCIENCE - European Research Council (ERC)

Total cost

€ 1 499 913,00

EU contribution

€ 1 499 913,00

Coordinated by

UNIVERSITAT ZURICH
Switzerland

Periodic Reporting for period 3 - AGRIMKT (Improving Market Access for Farmers: Evidence from East Africa)

Reporting period: 2024-01-01 to 2025-06-30

Summary of the context and overall objectives of the project

Agriculture employs the majority of the labor force in many developing countries, particularly in Sub-Saharan Africa. Increasing efficiency of agricultural production is a crucial step to foster economic development. Limited access to both input and output markets is widely considered a major obstacle to technology adoption and, in turn, to agricultural productivity.
In this proposal, I outline a research program that focuses on improving farmers’ market access in East Africa. The research builds on the expertise I have developed on these topics over the last ten years.
The research program consists of three related projects. In Project A, we use a randomized experiment to evaluate the impact of a holistic approach to improve market access: contract farming. We work in partnership with several agribusinesses in East Africa to conduct a randomized evaluation of contract farming, varying contract types at the village level.
In Project B, we study how to increase demand for crop insurance among smallholders. Building on previous successful experimental work, we examine the potential of pay-at-harvest crop insurance to raise insurance adoption and to foster sustained insurance demand over multiple crop seasons.
In Project C, we combine land registry data from East Africa with several other data sources to study the determinants and impact of land market access.
The research program will generate new insights on how to improve access to key markets for agricultural producers. We expect the findings of the study will generate high interest among academics, development practitioners, and policymakers.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Project A aims to evaluate the impact of linking farmers to contract farming arrangements on farmer productivity, income and other welfare indicators. Due to several challenges, including a slowdown of the business activities due to COVID, we had to change implementation partner. Working with Harvest Plus, we have developed a collaboration with three contract-farming companies (two companies in Uganda and one company in Rwanda), with a focus on iron-fortified beans. We have launched a village-level cluster randomized evaluation in the second half of 2022. We conducted a listing exercise in Fall 2022, and a baseline survey in Winter 2022/23. After that, the partner companies offered contracts to farmers in treatment villages. The first crop season ended in June 2023. We will be conducting a first endline survey in Summer 2023, before launching activities for the second crop season (Aug 2023-January 2024)

Project B aims to study whether and why changing the timing of premium payment can increase take up of crop insurance among smallholders. After several months of delay due to the COVID-19 pandemics, we resumed activities for this project in late 2021. In the first half of 2022, we developed a partnership with the Ugandan Agricultural Insurance Consortium (https://aic.ug/) which manages all the crop-insurance related projects in the country. AIC and the researchers have identified several agricultural offtakers who are interested in offering crop insurance to the farmers they are contracting with. As a result of these successful scoping activities, we are planning to launch the full-scale randomized evaluation in the first crop season of 2024.

Project C aims to study the dynamics of land markets development in East Africa. We have made substantial progress on this project. We have developed an official collaboration both with the Kenyan Ministry of Lands and Physical Planning and with the Uganda Ministry of Lands, Housing and Urban Development to get access to their administrative data, either by acquiring already digitized records or by newly digitizing other records. We are also preparing additional datasets, including rainfall data and satellite data on land usage.

Finally, I was invited to write a review piece (coauthored with my long-term collaborator Jack Willis) for a special issue of the Oxford Review of Economic Policy on microfinance. We are writing an article of “Value Chain Microfinance”, which is directly related to the topics of ERC Grant. We are covering, among other issues, contract farming and crop insurance, the subjects of Project A and B of the ERC grant.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The experiment for project A is one of the few examples of randomized evaluations in contract farming and, to the best of our knowledge, the first with multiple stakeholders in different countries. The results of the randomized evaluation will shed light on performance of these contracts, including on farmer technology adoption and agricultural productivity.
Project B will shed light on the potential of pay-at-harvest insurance to address two well-known challenges in financial market access for poor smallholders: take-up of crop insurance and sustained adoption over multiple crop seasons.
Project C leverages administrative land registry data, an important advancement in the study of land markets in Sub-Saharan Africa, which so far has primarily relied on survey data.