Selling Crops Early to Pay for School: A Large-Scale Natural Experiment in Malawi

Dillon, Brian

doi:10.2139/ssrn.2848003

Cited by 21 publications

(16 citation statements)

References 20 publications

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“…This is plausible, given the susceptibility of the two crops to insect damage and the poor storage practices of many farmer. Liquidity constraints may have led some farmers to make to 'distress sales' at lower prices in order to pay off debts or pay school fees (Dillon, 2017). Hence, farmers usually do not store the two legumes for long time periods.…”

Section: Follow Up Findingsmentioning

confidence: 99%

Report on a pilot study to crowdsource farmgate prices for legumes in southern Malawi

Ochieng¹

2019

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Little is known about farm gate prices in Malawi since data on the price trends are inconsistently collected. Yet this is important information for assessing the performance of agricultural markets. This report summarizes the findings from a pilot study to crowdsource farm gate prices for pigeon peas and chickpeas through the Farm Radio Trust (FRT) platform. In a series of radio 'jingles' and short message service (SMS) 'pushes', farmers were invited to report the prices and locations at which they had sold their pigeon peas and chickpeas to a toll-free number or using SMS. The phone numbers of farmers who responded were entered into a weekly draw with the possibility of winning a MWK25,000 coupon redeemable at a major agricultural input dealer. Between August 15, 2019 and November 1, 2019, 637 farmers called or sent short message service (SMS) texts to a toll-free number to report their sales, volume sold, and the type of buyer and location for sales of pigeon peas or chickpeas during the 2019 marketing season. At the end of the pilot, a follow up telephone survey of 468 of the 637 farmers was conducted to obtain detailed information on farmers' production and marketing activities that were not captured in the initial phone calls. Findings show that pigeon pea and chickpea farming is dominated by men and is highly commercialized, with about 79 percent of production sold. Less than 8 percent of farmers reported sales at prices equal to or above the minimum farm gate prices announced by the Government at the beginning of main harvest season. Most of the products were sold to vendors and manufacturers, while a small proportion was sold directly to consumers who usually offered better prices than vendors and manufacturers. Farmers mainly depended on buyers for price information and less than one-half of those interviewed in the follow up survey were aware of the ruling minimum farm gate prices. Buyers mainly purchased at below these minimum prices in an environment with limited market access with fluctuating production and prices. This suggests that price support to the legume producers does not guarantee better producer prices. As long as minimum farm gate prices remain unenforceable, they need to be reformed (if not eliminated) as they are not delivering the intended benefits to smallholder farmers.

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Section: Follow Up Findingsmentioning

confidence: 99%

Report on a pilot study to crowdsource farmgate prices for legumes in southern Malawi

Ochieng¹

2019

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“…ROSCA members were encouraged to collectively set aside some portion of their harvest, and hold it to sell when prices had risen. ROSCAs were each given four hermetically sealed storage bags (called Purdue Improved Crop Storage, or PICS bags) 20 Hermetically sealed bags are likely a major technological improvement for farmers: several studies have compared the PICS bags to other techniques such as solarization, fumigation, metal drums, or storage with ash/mud (all of which are likely superior to the technology our farmers use), and have found PICS bags to be more effective at preventing and arresting infestation (for instance, see Williams et al, 2017). 21 Moreover, PICS bags are also less labor-intensive and more cost-effective.…”

Section: B Gsra Interventionmentioning

confidence: 99%

“…First, it is an addition to the literature which examines the reasons due to which large intertemporal arbitrage gains are not exploited. So far, this literature has mainly focused on financial constraints, namely credit constraints (Stephens and Barrett, 2011;Bergquist et al, 2017), or liquidity constraints (Lee and Sawada, 2010;Sun et al, 2013;Dillon, 2016), or high alternative returns to capital (Nash and McCloskey 1984). An older literature has looked at price risk as a potential explanation (Saha and Stroud, 1994; Barrett and Dorosh, 1996); however, the current consensus among academics as well as policy-makers is that this is largely implausible given how predictable and regular these price increases are.…”

Section: Introductionmentioning

confidence: 99%

Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya

Aggarwal

Francis

Robinson

2018

Journal of Development Economics

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“…were encouraged to collectively set aside some portion of their harvest, and hold it to sell when prices had risen. ROSCAs were each given four hermetically sealed storage bags (called Purdue Improved Crop Storage, or PICS bags) 20 Hermetically sealed bags are likely a major technological improvement for farmers: several studies have compared the PICS bags to other techniques such as solarization, fumigation, metal drums, or storage with ash/mud (all of which are likely superior to the technology our farmers use), and have found PICS bags to be more effective at preventing and arresting infestation (for instance, see Williams et al, 2017). 21 Moreover, PICS bags are also less labor-intensive and more cost-effective.…”

Section: B Gsra Interventionmentioning

confidence: 99%

Grain Today, Gain Tomorrow: Evidence from a Storage Experiment with Savings Clubs in Kenya

Aggarwal¹,

Francis²,

Robinson³

2018

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We are grateful to Ashwini Chhatre, Maitreesh Ghatak and Dahyeon Jeong for useful discussions, and to 2 anonymous referees and seminar participants at IIM Bangalore, the Indian School of Business, and the Naval Postgraduate School for helpful comments. We thank Claudia Casarotto for research support. We thank ATAI and the University of California, Santa Cruz for funding, and IPA Kenya for administrative support. We thank Michael Dalious, Kathryn Dutile, Maira Reimao, and Dario Sidhu of Evidence Action for their collaboration. ABSTRACTMany farmers in the developing world lack access to effective savings and storage devices. Such devices might be particularly valuable for farmers since income is received as a lump sum at harvest but expenditures are incurred throughout the year, and because grain prices are low at harvest but rise over the year. We experimentally provided two saving schemes to 132 ROSCAs in Kenya, one designed around communally storing maize and the other around saving cash for inputs. About 56% of respondents took up the products. Respondents in the maize storage intervention were 23 percentage points more likely to store maize (on a base of 69%), 37 percentage points more likely to sell maize (on a base of 36%) and (conditional on selling) sold later and at higher prices. We find no effects of the individual input savings intervention on input usage, likely because baseline input adoption was higher than expected.

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Selling Crops Early to Pay for School: A Large-Scale Natural Experiment in Malawi

Cited by 21 publications

References 20 publications

Report on a pilot study to crowdsource farmgate prices for legumes in southern Malawi

Report on a pilot study to crowdsource farmgate prices for legumes in southern Malawi

Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya

Grain Today, Gain Tomorrow: Evidence from a Storage Experiment with Savings Clubs in Kenya

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