Using detailed survey data from Uganda, this article examines whether coffee producers sell to itinerant traders or directly to markets, where they can get a higher price but must incur a transport cost. We find that selling to the market is more likely when the quantity sold is large and the market is close by. Wealthy farmers are less likely to sell to the market, possibly because the shadow value of their time is higher. But if they have a large quantity of coffee for sale, they are more likely to sell it to the market. They are also more likely to travel to a distant market. These findings are consistent with their better ability to pay for public transportation. We find no evidence that the decision to sell at the farmgate is driven by a self-control motive. Copyright 2005, Oxford University Press.

We report the results from a first attempt to market weather insurance products to informal risk-sharing groups. In collaboration with a leading insurance company in Ethiopia, we marketed index-based rainfall insurance products to members of pre-existing risk-sharing groups. Leaders and members of risk sharing groups were trained on risk management and the possible benefits of insurance. Among those trained we randomized training, with some sessions focusing on the benefits of sharing insurance. We found that members of groups whose leaders had received training that emphasized risk-sharing had considerably higher uptake. Our results suggest benefits from marketing index-based insurance to insurance groups, at least in terms of uptake.

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We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether or not to purchase fertilizer and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game. In later rounds a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract. Insurance was found to have some positive effect on fertilizer purchases. Purchases were also found to depend on the realization of the weather in the previous round. We explore the mechanisms of this relationship and find that it may be the result of both changes in wealth weather brings about, and changes in perceptions of the costs and benefits to fertilizer purchases.

In this article we examine which farmers would be early entrants into weather-index insurance markets in Ethiopia, were such markets to develop on a large scale. We do this by examining the determinants of willingness to pay for weather insurance among 1,400 Ethiopian households that have been tracked for 15 years as part of the Ethiopian Rural household Survey. This provides both historical and current information with which to assess the determinants of demand. We find that educated, wealthier individuals are more likely to purchase insurance. Risk aversion is associated with low insurance take-up suggesting that models of technology adoption can inform the purchase and spread of weather index insurance. We also assess how willingness to pay varied as two key characteristics of the contract were varied and found that basis risk reduces demand for insurance particularly when the price of the contract is high, and that provision of insurance through groups is preferred by female headed households and individuals with lower levels of education.JEL classifications: O12, O13, O16

This paper considers the impact of gender specific constraints on the production and marketing of cash crops. Cash crop production differs from general agricultural production in that it entails engaging in output markets to make sales. This in turn requires reliable access to these markets, and has implications on the necessary scale and quality of production. Assessing the nature of female involvement in cash crop production is important, not just because it differs from the production of other crops, but because cash crop production holds significant potential as a means by which rural households can improve their welfare. Through a combination of review and original data analysis, this paper stresses the point that women are equally productive as men and receive equal prices to men, when they farm with the same resources and sell their crops in the same way. However, our review and analysis shows that women rarely have similar access to assets and markets as men and this has a non-trivial impact on production and marketing of cash crops. These gender inequalities in resources result in different levels of participation, methods of production and modes of marketing cash crops, and bear consequences for women's potential outcome in the cultivation of these high value crops.

This study assesses both the demand for and effectiveness of an index insurance product designed to help smallholder farmers in Bangladesh manage crop production risk during the monsoon season. Villages were randomized into either an insurance treatment or a comparison group, and discounts and rebates were randomly allocated across treatment villages to encourage insurance take-up and to allow for the estimation of the price-elasticity of insurance demand. Among those offered insurance, we find demand to be fairly price elastic, with discounts significantly more successful in stimulating demand than rebates. Purchasing insurance yields both ex ante risk management effects as well as ex post income effects on agricultural production practices. The risk management effects lead to an expansion of cultivated area with concomitant increases in agricultural input expenditures during the monsoon season. The income effects lead to more intensive rice production during the subsequent dry season, with more intensive use of both irrigation and fertilizers, resulting in higher yields and higher total rice production.

Using detailed data from three simultaneous surveys of producers, traders, and exporters, this paper examines the transmission of international coffee prices through the domestic value chain in Uganda. We find that producer price fluctuations are inconsistent with constant transaction costs. We investigate three possible explanations for this finding: storage and contango, marketing costs that increase with price, and trader entry that raises search time. We test and reject the storage and marketing costs explanation, but we find some evidence of trader entry in response to a rise in export price. Our findings suggest that small itinerant traders enter in response to an export price increase, probably taking advantage of farmers’ ignorance of the rise in wholesale price.