Is access to tractor service a binding constraint for Nepali Terai farmers?

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Is access to tractor service a binding constraint for Nepali Terai farmers? by : Takeshima, Hiroyuki

Download or read book Is access to tractor service a binding constraint for Nepali Terai farmers? written by Takeshima, Hiroyuki and published by Intl Food Policy Res Inst. This book was released on 2016-02-12 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using results from the three rounds of Nepal Living Standard Surveys (conducted in 1995, 2003, and 2010), this study empirically assesses whether access to rented tractors or custom hiring services is a binding constraint on the income growth of farm households in Nepal. Because four-wheel tractors of medium horsepower are still the primary suppliers of these tractor services, access to these services can be restricted. First, we investigated the determinants of the adoption of hired tractors as well as the intensity of their use (measured by real annual expenditures on renting tractors). Results suggest that the adoption and the intensity patterns are generally consistent with the conventional theory of the demand for agricultural mechanization, indicating that the supply of these services may be relatively efficient in meeting the demand. However, adoption is still affected by the presence of tractor owners within the same village district committee, indicating that the proximity to tractor service providers may still partly determine accessibility. This second point was more formally tested using matching estimators within the Terai region of Nepal. It was found that, on average, the supply of tractor services might have evolved to a relatively efficient level in the Terai so that those who benefited from renting in tractors generally had access to such services. However, for at least certain segments of farm households in the Terai, insufficient access to tractor services was still a binding constraint on the growth of farm household incomes. The policy implications of these findings are briefly discussed in the last section.

Agricultural Transformation in Nepal

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Author :
Publisher : Springer Nature
ISBN 13 : 9813296488
Total Pages : 652 pages
Book Rating : 4.8/5 (132 download)

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Book Synopsis Agricultural Transformation in Nepal by : Ganesh Thapa

Download or read book Agricultural Transformation in Nepal written by Ganesh Thapa and published by Springer Nature. This book was released on 2019-11-25 with total page 652 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book addresses some key strategic questions related to agriculture in the context of major contemporary developments and emerging challenges in Nepal such as the changing role of agriculture with economic growth, structural transformation in reducing poverty, improving nutritional outcomes, and addressing the challenges of climate change. The book also suggests policy measures to improve the delivery of critical inputs and services and ensure the participation of marginal and smallholders in high-value chains. Further, it discusses how the new federal system and governance structure will affect the delivery of agricultural technology and services. The book is divided into five parts. Part I discusses macro-issues in the agriculture sector, while Part II focuses on agricultural productivity growth and its main drivers. The third part explores diversification in the agricultural and non-agricultural sectors by farmers and other rural people for livelihood improvement, while the fourth part deals with agricultural trade and marketing issues, highlighting policy implications and recommendations in the areas of immediate focus and further research. Lastly, Part V addresses institutions and governance issues, which are vital for agricultural development. In the final chapter, the editors summarize and synthesize the book’s main findings and develop a policy agenda for addressing the many challenges faced by the agriculture sector in Nepal, so as to make it more productive, competitive, sustainable, and inclusive. The book offers a rich source of analytical information on various aspects of agricultural development in Nepal and will be of immense value to policymakers, development partners, civil society, students, and those interested in the economic and agricultural development of not only Nepal, but also other developing countries.

Overview of the evolution of agricultural mechanization in Nepal: A focus on tractors and combine harvesters

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Author :
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4./5 ( download)

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Book Synopsis Overview of the evolution of agricultural mechanization in Nepal: A focus on tractors and combine harvesters by : Takeshima, Hiroyuki

Download or read book Overview of the evolution of agricultural mechanization in Nepal: A focus on tractors and combine harvesters written by Takeshima, Hiroyuki and published by Intl Food Policy Res Inst. This book was released on 2017-07-21 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study was conducted to understand the evolution of agricultural mechanization in Nepal, specifically its determinants on both the demand and supply sides, as well as impacts on agricultural production and associations with broader economic transformation processes, in order to draw lessons that can be conveyed to other less mechanized countries. Mechanization levels in Nepal, a largely agricultural country, were relatively low until a few decades ago. However, significant mechanization growth, including the adoption of tractors, has occurred since the 1990s, against a backdrop of rising rural wages, particularly for plowing, combined with growing emigration and growth in key staple crop yields and overall broad agricultural production growth, as well as improved market access and participation. This growth in mechanization has taken place despite the general absence of direct government support or promotion. The growth of tractor use in the plains of the Terai zone has transformed agricultural production rather than inducing labor movement out of agriculture, raising overall returns to scale in intensification and enabling the cultivation of greater areas by medium smallholders than by resource-poor smallholders. Tractors have also facilitated the intensification of crop production per unit of land among very small farmers, enabling mechanization growth despite the continued decline in farm size, although these farmers may not have benefited as much as medium smallholders. Potential future research areas with policy relevance include mitigating accessibility constraints to tractor custom hiring services, identifying appropriate regulatory policies for mechanization, and providing complementary support to some smallholders who may not fully benefit from tractor adoption alone.

An evolving paradigm of agricultural mechanization development: How much can Africa learn from Asia?

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Publisher : Intl Food Policy Res Inst
ISBN 13 : 0896293807
Total Pages : 548 pages
Book Rating : 4.8/5 (962 download)

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Book Synopsis An evolving paradigm of agricultural mechanization development: How much can Africa learn from Asia? by : Diao, Xinshen, ed.

Download or read book An evolving paradigm of agricultural mechanization development: How much can Africa learn from Asia? written by Diao, Xinshen, ed. and published by Intl Food Policy Res Inst. This book was released on 2020-12-07 with total page 548 pages. Available in PDF, EPUB and Kindle. Book excerpt: Agricultural mechanization in Africa south of the Sahara — especially for small farms and businesses — requires a new paradigm to meet the needs of the continent’s evolving farming systems. Can Asia, with its recent success in adopting mechanization, offer a model for Africa? An Evolving Paradigm of Agricultural Mechanization Development analyzes the experiences of eight Asian and five African countries. The authors explore crucial government roles in boosting and supporting mechanization, from import policies to promotion policies to public good policies. Potential approaches presented to facilitating mechanization in Africa include prioritizing market-led hiring services, eliminating distortions, and developing appropriate technologies for the African context. The role of agricultural mechanization within overall agricultural and rural transformation strategies in Africa is also discussed. The book’s recommendations and insights should be useful to national policymakers and the development community, who can adapt this knowledge to local contexts and use it as a foundation for further research.

Agriculture-nutrition linkages and child health in the presence of conflict in Nepal

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Author :
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4./5 ( download)

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Book Synopsis Agriculture-nutrition linkages and child health in the presence of conflict in Nepal by : Bageant, Elizabeth

Download or read book Agriculture-nutrition linkages and child health in the presence of conflict in Nepal written by Bageant, Elizabeth and published by Intl Food Policy Res Inst. This book was released on 2016-03-18 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Much policy and research attention has focused on the relationship between agriculture and nutrition. We extend this analysis to the context of Nepal’s decade-long civil conflict. Understanding how conflict or similar stress mitigates the agriculture-nutrition linkage is essential to developing impactful agriculture and nutrition policy in potential conflict zones. To our knowledge, there is no prior empirical work on the link between agriculture and nutrition in the context of conflict. We find a robust relationship between milk consumption and anthropometric outcomes. We also show a positive link between milk production and milk consumption at the household level. We find significant negative relationships between conflict and milk consumption for households owning few livestock while such relationships do not exist for larger holders. We attribute these heterogeneous effects to conflict-related productivity declines and milk price increases, both of which disproportionately affect households with fewer livestock and lower milk-production capacity. Among rural households in Nepal, milk production could serve as a nutritional buffer in times of conflict or other stress, and thus, policies that promote households’ livestock production could be effective measures in improving resilience of the rural poor against shocks that negatively affect child health outcomes.

Can contract farming increase farmers’ income and enhance adoption of food safety practices?

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Author :
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Can contract farming increase farmers’ income and enhance adoption of food safety practices? by : Kumar, Anjani

Download or read book Can contract farming increase farmers’ income and enhance adoption of food safety practices? written by Kumar, Anjani and published by Intl Food Policy Res Inst. This book was released on 2016-04-20 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Growing inequality has become an important concern in many countries. One of the ways that inequality is perpetuated is through differential market access across regions. This research deals with one of the primary determinants of regional inequality manifested in terms of market access. Nepal is one country where hierarchical geography leads to regional inequality. Differential market access can cause as well as accentuate inequality among farmers. Coordination arrangements such as contract farming can improve outcomes for the farmers and integrators on the one hand, but on the other hand it can accentuate inequality if only some regions benefit from it. With this background, in this paper we study the case of contract farming for exports with farmers in remote hilly areas of Nepal. The prospect for contract farming in such areas with accessibility issues owing to underdeveloped markets and lack of amenities is ambiguous. On the one hand, contractors in these areas find it difficult to build links, particularly when final consumers have quality and safety requirements. On the other hand, remoteness can make the contracts more sustainable if the agroecology offers product-specific quality advantages and, more important, if there is a lack of side-selling opportunities. At the same time, concerns remain about buyers’ monopsonistic powers when remotely located small farmers do not have outside options. This study hence quantifies the benefits of contract farming on remotely located farmers’ income and compliance with food safety measures. Results show that contract farming is significantly more profitable (offering a 58 percent greater net income) than independent production, the main pathway being higher price realization, along with training on practices and provision of quality seeds.

Structural transformation and intertemporal evolution of real wages, machine use, and farm size–productivity relationships in Vietnam

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 24 pages
Book Rating : 4./5 ( download)

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Book Synopsis Structural transformation and intertemporal evolution of real wages, machine use, and farm size–productivity relationships in Vietnam by : Liu, Yanyan

Download or read book Structural transformation and intertemporal evolution of real wages, machine use, and farm size–productivity relationships in Vietnam written by Liu, Yanyan and published by Intl Food Policy Res Inst. This book was released on 2016-04-20 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the evolution of real agricultural wages, machinery use, and the relationship between farm size and productivity in Vietnam during its dramatic structural transformation over the course of the 1990s and 2000s. Using six rounds of nationally representative household survey data, we find strong evidence that the inverse relationship between rice productivity and planting area attenuated significantly over this period and that the attenuation was most pronounced in areas with higher real wages. This pattern is also associated with sharp increases in machinery use, indicating a scale-biased substitution effect between machinery and labor. The results suggest that rural-factor market failures are receding in importance, making land concentration less of a cause of concern for aggregate food production.

"As a husband I will love, lead, and provide"

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Author :
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4./5 ( download)

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Book Synopsis "As a husband I will love, lead, and provide" by : Lambrecht, Isabel

Download or read book "As a husband I will love, lead, and provide" written by Lambrecht, Isabel and published by Intl Food Policy Res Inst. This book was released on 2016-03-11 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Improving women’s access to land is high on the agricultural policy agenda of both governmental and non-governmental agencies. Yet, the determinants and rationale of gendered access to land are not well understood. This paper argues that gender relations are more than the outcomes of negotiations within households. It explains the importance of social norms, perceptions, and formal and informal rules shaping access to land for male and female farmers at four levels: (1) the household/family, (2) the community, (3) the state, and (4) the market. The framework is applied to Ghana. Norms on household and family organization and on men’s and women’s responsibilities and capabilities play a key role in gendered allocation of resources. However, these norms and perceptions are dynamic and evolve jointly with the development of markets and changes in values of inputs such as labor and land. Theoretical models that represent the gendered distribution of assets as the result of intrahousehold bargaining should be revised, and extrahousehold factors should be included. From a policy perspective, laws that ensure gender equality in terms of inheritance and a more gender-equitable distribution of property upon divorce can play a key role in improving women’s property rights. Yet, their impact may be limited where customary rights dominate and social norms and rules continue to discriminate according to gender.

Agricultural mechanization and agricultural transformation

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Author :
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 56 pages
Book Rating : 4./5 ( download)

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Book Synopsis Agricultural mechanization and agricultural transformation by : Diao, Xinshen

Download or read book Agricultural mechanization and agricultural transformation written by Diao, Xinshen and published by Intl Food Policy Res Inst. This book was released on 2016-04-29 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: A renewed focus on agriculture’s potential contribution to economic transformation in Africa has resulted in increased attention paid to agricultural mechanization. African agriculture still relies predominantly on human muscle power despite anecdotal evidence on urbanization and rising rural wages, in contrast to other developing regions that have experienced rapid increases in agricultural mechanization during the past few decades. Past state-led mechanization pushes in Africa often failed due to insufficient understanding of the nature of demand for mechanization technologies among farmers and insufficient knowledge of private-sector functions. This background paper reviews the factors likely to influence farmer demand for mechanization in Africa and details different existing and potential mechanization supply models. Although an empirical analysis of mechanization demand and the effectiveness of supply chains is beyond the scope of this paper, in part due to data limitations, this paper suggests that demand for mechanization may be emerging in some parts of Africa. It also suggests that private-sector-driven supply models are better positioned to meet this demand than direct government involvement and certain types of subsidized programs. The paper then identifies possible areas for government support to complement private-sector leadership in developing mechanization supply chains. Nevertheless, significant further research is required to better understand the changing nature of mechanization demand in Africa and the extent and effectiveness of different supply models in meeting it.

Findings across agricultural public expenditure reviews in African countries

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4./5 ( download)

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Book Synopsis Findings across agricultural public expenditure reviews in African countries by : Mink, Stephen D.

Download or read book Findings across agricultural public expenditure reviews in African countries written by Mink, Stephen D. and published by Intl Food Policy Res Inst. This book was released on 2016-04-15 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether the consensus reached by the late 2000s among African Union member countries and their external partners on the need to reverse the decades-long decline in spending for essential public goods and services in agriculture has begun to result inimproved levels and quality of national expenditure programs for the sector. It synthesizes evidence from 20 Agriculture Public Expenditure Reviews (Ag PERs) that have been carried out in countries in Africa South of the Saharan (Botswana, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Democratic Republic of the Congo, Ghana, Guinea, Liberia, Madagascar, Mozambique, Rwanda, Nigeria, Senegal, Sierra Leone, South Africa, Tanzania, Togo, Uganda, and Zambia) with World Bank assistance during 2009–2015. This synthesis focuses on several measures: (1) the level of expenditures on agriculture, with particular reference to the explicit target by African heads of state in the 2003 Maputo Declaration on Agriculture and Food Security (reconfirmed in the Malabo Declaration) to allocate 10 percent of national budgets to the sector; (2) the composition and priorities of expenditures with respect to stated national strategies, evidence of impact, and sustainability; and (3) budget planning and implementation that aims to strengthen public financial management in general, and budget coherence, outputs, outcomes, and supporting mechanisms, such as procurement and audit, in particular. This paper uses Ag PERs to analyze budgetary trends across countries, identifies major expenditure issues, and synthesizes lessons regarding spending efficiency. The analysis results in evidence-based recommendations that address, inter alia, budget planning, budget execution, and monitoring for accountability; the creation of a reliable database; more effective intra-and intersectoral coordination; and the cost-effectiveness of different spending policies for meeting various objectives

Risk and sustainable crop intensification

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Risk and sustainable crop intensification by : Van Campenhout, Bjorn

Download or read book Risk and sustainable crop intensification written by Van Campenhout, Bjorn and published by Intl Food Policy Res Inst. This book was released on 2016-04-15 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: To feed a growing and increasingly urbanized population, Uganda needs to increase crop production without further exhausting available resources. Therefore, smallholder farmers are encouraged to adopt sustainable crop intensification methods such as inorganic fertilizer or hybrid seeds. However, these farmers perceive these new technologies as risky hence adoption will depend on how well they can manage this additional risk. This paper documents patterns observed in socioeconomic data that suggest risk is an important barrier to sustainable crop intensification practices among Ugandan smallholder rice and potato farmers. In particular, we find that households that engage in risk management strategies, such as investing in risk-reducing technology or engaging in precautionary savings, are more likely to practice intensified cropping. However, our data also show only limited yield risk associated with the use of fertilizers or pesticides, suggesting part of the problem is related to perception. We also discuss the consequences for policy.

Boserupian pressure and agricultural mechanization in modern Ghana

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4./5 ( download)

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Book Synopsis Boserupian pressure and agricultural mechanization in modern Ghana by : Cossar, Frances

Download or read book Boserupian pressure and agricultural mechanization in modern Ghana written by Cossar, Frances and published by Intl Food Policy Res Inst. This book was released on 2016-04-29 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The adoption of machinery in agricultural production in Africa south of the Sahara has been far behind the level of mechanization found in Asia and Latin America. However, recent survey data have revealed high levels of machinery use in localized areas of cereal production in northern Ghana. A survey conducted by the International Food Policy Research Institute, in partnership with the Savannah Agriculture Research Institute, found that in some areas more than 80 percent of farmers were using machinery for at least one operation. This paper considers the theoretical drivers of agricultural intensification, as outlined by Boserup, Pingali, and Binswanger, and the extent to which they are able to explain the spatial variation in machinery use found in northern Ghana. Population pressure, market access, and agroecological conditions are considered key drivers that cause farmers to find ways to increase productivity and adopt new technologies. Combining survey data with geospatial datasets, the empirical analysis finds that population growth and travel time to the local urban center explain a significant and large proportion of the variation in machinery use by farmers.

Pakistan’s fertilizer sector

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 76 pages
Book Rating : 4./5 ( download)

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Book Synopsis Pakistan’s fertilizer sector by : Ali, Mubarik

Download or read book Pakistan’s fertilizer sector written by Ali, Mubarik and published by Intl Food Policy Res Inst. This book was released on 2016-04-01 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: The fertilizer industry in Pakistan, with US$3.74 billion per year in sales, now stands at a crossroads where, after an initial substantial contribution in boosting crop productivity, its future potential is being challenged. Fertilizer-responsive crop varieties, supplementary irrigation water, and a favorable policy environment in Pakistan have induced fast growth in fertilizer demand. On the supply side, the availability of gas at low prices along with a favorable investment environment resulted in the buildup of excessive manufacturing capacity. But recently, a shortage of gas and monopolistic behavior has led to underutilization and greater imports. Restrictive laws put fertilizer processing and marketing in a few hands, which has also affected its efficiency. Moreover, the yield response of fertilizer has tapered off and per hectare use is fast reaching its optimal level. The existing policy environment leads to higher costs, inefficient use, and a heavy burden on the government as it charges one-fourth of the market price for feedstock gas used in fertilizer manufacturing. In addition, the government imports urea and absorbs the difference in international and domestic prices.

Can information help reduce imbalanced application of fertilizers in India?

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 28 pages
Book Rating : 4./5 ( download)

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Book Synopsis Can information help reduce imbalanced application of fertilizers in India? by : Fishman, Ram

Download or read book Can information help reduce imbalanced application of fertilizers in India? written by Fishman, Ram and published by Intl Food Policy Res Inst. This book was released on 2016-04-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The imbalanced application of chemical fertilizers in India is widely blamed for low yields, poor soil health, pollution of water resources, and large public expenditures on subsidies. To address the issue, the government of India is investing in a large-scale, expensive program of individualizedsoil testing and customized fertilizer recommendations, with the hope that scientific information will lead farmers to optimize the fertilizer mix. We conducted a randomized controlled trial in the Indian state of Bihar in what we believe to be the first evaluation of the effectiveness of the program as currently implemented. We found no evidence of any impact of soil testing and customized fertilizer recommendations on actual fertilizer use or the willingness to pay for lacking nutrients (elicited using aBecker-DeGroot-Marschak mechanism). Several factors could be driving these results, including a lack of understanding, lack of confidence in the information’s reliability, or the costs of the recommended fertilizer mixes. We provide evidence that suggestslack of confidence is the main factor inhibiting farmers’ response

Institutional arrangements to make public spending responsive to the poor—(where) have they worked?

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Institutional arrangements to make public spending responsive to the poor—(where) have they worked? by : Mogues, Tewodaj

Download or read book Institutional arrangements to make public spending responsive to the poor—(where) have they worked? written by Mogues, Tewodaj and published by Intl Food Policy Res Inst. This book was released on 2016-04-06 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been some recognition in the development community that building technical capacity of public service providers and increasing resources is not enough to bring about development outcomes. Researchers and practitioners are increasingly appreciating that accounting for the stated needs of communities supports the process of pro-poor public resource allocation. We examine four institutional arrangements that explicitly endeavor to make public spending responsive to the needs of the poor by moving decision-making procedures closer to the population—participatory budgeting, community-driven development (CDD) programs, decentralization, and delegated targeting of transfers. Using the existing literature, we compare experiences across the four arrangements and countries. Regarding responsiveness to needs of the poor, evidence is cautiously optimistic for participatory budgeting, CDD, and decentralization. As for delegating the targeting of transfers to subnational authorities and communities, evidence suggests that the effect may be regressive. However, there are important mediating effects of public spending responsiveness under the various institutional arrangements. Local elite capture is a key factor dampening pro-poor spending where either exogenous circumstances such as prevailing inequality, or inadequate program design, enable capture to materialize. Politics is an important determinant of the success of these arrangements.

A poverty-sensitive scorecard to prioritize lending and grant allocation

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4./5 ( download)

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Book Synopsis A poverty-sensitive scorecard to prioritize lending and grant allocation by : Hernandez, Manuel A.

Download or read book A poverty-sensitive scorecard to prioritize lending and grant allocation written by Hernandez, Manuel A. and published by Intl Food Policy Res Inst. This book was released on 2016-04-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Development projects are generally subject to a potential tradeoff between sustainability and poverty reduction. Grants are also commonly assigned without a standardized criterion. This paper proposes an innovative scoring tool that combines both a risk and poverty scorecard to prioritize lending and grant allocation. We implement and test the instrument through a competitive fund for demand-driven projects in Central America intended to better link smallholder farmers to markets and improve their welfare. The evaluation results show that the highest-ranked projects generally have a larger economic impact on their beneficiaries than lower-ranked projects. We observe a larger effect on income, access to credit,and access to local markets, and the relative differences are stronger over time. The proposed scorecard tool is intended to better ensure the accountability and sustainability of development funds and can be easily adapted to different contexts

Delegation of quality control in value chains

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Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 56 pages
Book Rating : 4./5 ( download)

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Book Synopsis Delegation of quality control in value chains by : Saak, Alexander E.

Download or read book Delegation of quality control in value chains written by Saak, Alexander E. and published by Intl Food Policy Res Inst. This book was released on 2016-04-21 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the decision of a firm that sells an experience good to delegate quality control to an independent monitor. In an infinitely repeated game consumers’ trust provides incentives to (1) acquire information about whether the good is defective and (2) withhold the good from sale if it is defective. If third-party reports are observable to consumers, delegation of monitoring lessens the first and dispenses with the second moral hazard concern but also creates agency costs due to either limited liability or lack of commitment. In equilibrium the firm controls quality without an independent monitor only if trades are sufficiently frequent and consumer information about quality is sufficiently precise. This result holds under different assumptions about feasible contracts, collusion, verifiability of reports, joint inspections, and the number of firms that hire the third-party monitor. If third-party reports are not publicly observed, delegation can be optimal only if two or more firms hire the third-party monitor because then both moral hazard concerns are present under delegation.