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Impact of Third-Party Contract Enforcement in Agricultural Markets - A Field Experiment in Vietnam

Asymmetry of information is a fundamental problem in agricultural markets. Production contracts remain incomplete if product quality attributes measured by the buying company remain unobservable for the selling farmer. Opportunistic buyers would report lower than actual output quality, negatively affecting farmers’ compensation given it is directly linked to quality. When farmers factor in the buyer’s opportunistic behavior, underinvestment may occur, negatively affecting farm productivity.

Value Chain Financing: Evidence from Zambia on Smallholder Access to Finance for Mechanization

Smallholder farmers in Zambia comprise 85 per cent of the farmers’ population. Such farmers are regarded as not creditworthy and furthermore their agricultural productivity could be improved. The aim of this paper is to present recent evidence on value chain financing (VCF) as a framework to increase access to agricultural finance for Zambian smallholder farmers. Such financing will act as an enabler to mechanize and, in turn, might improve productivity. Qualitative data collection techniques were followed to provide the results as presented in three illustrative case studies.

LINK methodology: A Participatory Guide to Business Models that Link Smallholders to Markets

Helps actors understand the current functioning of the market chain and key business models, design innovations that empower producer groups to engage more effectively and buyers to act in ways more amenable to smallholder farmers.

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