IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v157y2022ics030438782200027x.html
   My bibliography  Save this article

Overcoming smallholder farmers’ post-harvest constraints through harvest loans and storage technology: Insights from a randomized controlled trial in Tanzania

Author

Listed:
  • Channa, Hira
  • Ricker-Gilbert, Jacob
  • Feleke, Shiferaw
  • Abdoulaye, Tahirou

Abstract

Maintaining staple grains throughout the year and managing liquidity are two major challenges that smallholder farmers face at harvest. We implemented a randomized controlled trial in Tanzania that was designed to address these post-harvest constraints. First, we offered treated farmers two hermetic (airtight) storage bags, which helped preserve grain quantity and quality. Second, we offered other treated farmers a loan at harvest, which reduced the liquidity constraints they faced. Repayment was due with interest six months from harvest when maize prices were traditionally higher. We did not find a significant impact of the storage intervention. However, those offered the loan stored 29 percent more and sold 50 percent more maize on average in the lean season compared to farmers in the control group. Nevertheless, an unexpected maize export ban in Tanzania likely attenuated the outcomes of both interventions. This highlighted the challenges surrounding agricultural financial products in the developing world.

Suggested Citation

  • Channa, Hira & Ricker-Gilbert, Jacob & Feleke, Shiferaw & Abdoulaye, Tahirou, 2022. "Overcoming smallholder farmers’ post-harvest constraints through harvest loans and storage technology: Insights from a randomized controlled trial in Tanzania," Journal of Development Economics, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:deveco:v:157:y:2022:i:c:s030438782200027x
    DOI: 10.1016/j.jdeveco.2022.102851
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030438782200027X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2022.102851?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Baffes & Varun Kshirsagar & Donald Mitchell, 2019. "What Drives Local Food Prices? Evidence from the Tanzanian Maize Market," The World Bank Economic Review, World Bank, vol. 33(1), pages 160-184.
    2. Anderson, Michael L, 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt15n8j26f, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Abdoulaye, Tahirou & Sanders, John H., 2006. "New technologies, marketing strategies and public policy for traditional food crops: Millet in Niger," Agricultural Systems, Elsevier, vol. 90(1-3), pages 272-292, October.
    4. Xinshen Diao & Adam Kennedy, 2016. "Economywide Impact of Maize Export Bans on Agricultural Growth and Household Welfare in Tanzania: A Dynamic Computable General Equilibrium Model Analysis," Development Policy Review, Overseas Development Institute, vol. 34(1), pages 101-134, January.
    5. Christiaensen,Luc & Kaminski,Jonathan & Christiaensen,Luc & Kaminski,Jonathan, 2014. "Post-harvest loss in Sub-Saharan Africa -- what do farmers say ?," Policy Research Working Paper Series 6831, The World Bank.
    6. Nicole M. Mason & Thomas S. Jayne & Robert J. Myers, 2015. "Smallholder Supply Response to Marketing Board Activities in a Dual Channel Marketing System: The Case of Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(1), pages 36-65, February.
    7. Jonathan Kaminski & Luc Christiaensen & Christopher L. Gilbert, 2016. "Seasonality in local food markets and consumption: evidence from Tanzania," Oxford Economic Papers, Oxford University Press, vol. 68(3), pages 736-757.
    8. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    9. Delavallade, Clara & Godlonton, Susan, 2023. "Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso," Journal of Development Economics, Elsevier, vol. 160(C).
    10. Marshall Burke & Lauren Falcao Bergquist & Edward Miguel, 2019. "Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 785-842.
    11. Magnan, Nicholas & Hoffmann, Vivian & Opoku, Nelson & Gajate Garrido, Gissele & Kanyam, Daniel Akwasi, 2021. "Information, technology, and market rewards: Incentivizing aflatoxin control in Ghana," Journal of Development Economics, Elsevier, vol. 151(C).
    12. Brander, Michael & Bernauer, Thomas & Huss, Matthias, 2021. "Improved on-farm storage reduces seasonal food insecurity of smallholder farmer households – Evidence from a randomized control trial in Tanzania," Food Policy, Elsevier, vol. 98(C).
    13. Flory, Jeffrey A., 2018. "Formal finance and informal safety nets of the poor: Evidence from a savings field experiment," Journal of Development Economics, Elsevier, vol. 135(C), pages 517-533.
    14. Lasse Brune & Xavier Giné & Jessica Goldberg & Dean Yang, 2016. "Facilitating Savings for Agriculture: Field Experimental Evidence from Malawi," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 187-220.
    15. Makombe, Wilfred & Kropp, Jaclyn, 2016. "Impacts of Tanzania Maize Export Bans on Production and Assets Accumulation," SCC-76 Meeting, 2016, March 17-19, Pensacola, Florida 233762, SCC-76: Economics and Management of Risk in Agriculture and Natural Resources.
    16. Jonathan Bauchet & Stacy Prieto & Jacob Ricker‐Gilbert, 2021. "Improved Drying and Storage Practices that Reduce Aflatoxins in Stored Maize: Experimental Evidence from Smallholders in Senegal," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 296-316, January.
    17. Makombe, Wilfred & Kropp, Jaclyn D., 2016. "The Effects Of Tanzanian Maize Export Bans On Producers’ Welfare And Food Security," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235499, Agricultural and Applied Economics Association.
    18. McKenzie, David, 2012. "Beyond baseline and follow-up: The case for more T in experiments," Journal of Development Economics, Elsevier, vol. 99(2), pages 210-221.
    19. Omotilewa, Oluwatoba J. & Ricker-Gilbert, Jacob & Ainembabazi, John Herbert & Shively, Gerald E., 2018. "Does improved storage technology promote modern input use and food security? Evidence from a randomized trial in Uganda," Journal of Development Economics, Elsevier, vol. 135(C), pages 176-198.
    20. Basu, Karna & Wong, Maisy, 2015. "Evaluating seasonal food storage and credit programs in east Indonesia," Journal of Development Economics, Elsevier, vol. 115(C), pages 200-216.
    21. Günther Fink & B. Kelsey Jack & Felix Masiye, 2020. "Seasonal Liquidity, Rural Labor Markets, and Agricultural Production," American Economic Review, American Economic Association, vol. 110(11), pages 3351-3392, November.
    22. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    23. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881, October.
    24. Gilbert, Christopher L. & Christiaensen, Luc & Kaminski, Jonathan, 2017. "Food price seasonality in Africa: Measurement and extent," Food Policy, Elsevier, vol. 67(C), pages 119-132.
    25. Chapoto, Antony & Jayne, Thomas S., 2009. "The Impacts of Trade Barriers and Market Interventions on Maize Price Predictability: Evidence from Eastern and Southern Africa," Food Security International Development Working Papers 56798, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    26. Brian Dillon, 2021. "Selling Crops Early to Pay for School: A Large-Scale Natural Experiment in Malawi," Journal of Human Resources, University of Wisconsin Press, vol. 56(4), pages 1296-1325.
    27. Atanu Saha & Janice Stroud, 1994. "A Household Model of On-Farm Storage Under Price Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 522-534.
    28. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    29. Emma C. Stephens & Christopher B. Barrett, 2011. "Incomplete Credit Markets and Commodity Marketing Behaviour," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 1-24, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maneno Y. Chidege & Pavithravani B. Venkataramana & Patrick A. Ndakidemi, 2024. "Enhancing Food Grains Storage Systems through Insect Pest Detection and Control Measures for Maize and Beans: Ensuring Food Security Post-COVID-19 Tanzania," Sustainability, MDPI, vol. 16(5), pages 1-22, February.
    2. Manda, Julius & Feleke, Shiferaw & Mutungi, Christopher & Tufa, Adane H. & Mateete, Bekunda & Abdoulaye, Tahirou & Alene, Arega D., 2024. "Assessing the speed of improved postharvest technology adoption in Tanzania: The role of social learning and agricultural extension services," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    3. Tabitha Nindi & Jacob Ricker‐Gilbert & Jonathan Bauchet, 2024. "Incentive mechanisms to exploit intraseasonal price arbitrage opportunities for smallholder farmers: Experimental evidence from Malawi," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 330-353, January.
    4. Wouter Zant, 2023. "How costly is using livestock as a savings device?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(1), pages 77-110, February.
    5. Masselus, Lise & Petrik, Christina & Ankel-Peters, Jörg, 2024. "Lost in the design space? Construct validity in the microfinance literature," Ruhr Economic Papers 1097, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Jia, Jingru & McNamara, Paul E., 2024. "Information Interventions and Willingness to Pay for PICS Bags: Evidence from Sierra Leone," 2024 Annual Meeting, July 28-30, New Orleans, LA 344001, Agricultural and Applied Economics Association.
    7. Ölkers, Tim & Liu, Shuang & Mußhoff, Oliver, 2023. "A typology of Malian farmers and their credit repayment performance - An unsupervised machine learning approach," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334547, Agricultural Economics Society - AES.
    8. Lila Cardell & Hope Michelson, 2023. "Price risk and small farmer maize storage in Sub‐Saharan Africa: New insights into a long‐standing puzzle," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 737-759, May.
    9. repec:ags:aaea22:335716 is not listed on IDEAS
    10. Xiaoyu Sun & Xiaoli Yang & Ruilong Zhang, 2022. "The Determinants of Grape Storage: Evidence from Grape Growers in China," Agriculture, MDPI, vol. 12(12), pages 1-14, December.
    11. Tim Ölkers & Oliver Mußhoff, 2024. "Exploring the role of interest rates, macroeconomic environment, agricultural cycle, and gender on loan demand in the agricultural sector: Evidence from Mali," Agribusiness, John Wiley & Sons, Ltd., vol. 40(2), pages 484-512, April.
    12. Schwab, Benjamin & Yu, Jisang, 2022. "Guaranteed Storage? Risk and Credit Constraints in the Demand for Postharvest Technology and Rice Seed Storage Decisions in Bangladesh," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322475, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tabitha Nindi & Jacob Ricker‐Gilbert & Jonathan Bauchet, 2024. "Incentive mechanisms to exploit intraseasonal price arbitrage opportunities for smallholder farmers: Experimental evidence from Malawi," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 330-353, January.
    2. Betelhem M. Negede & Hugo De Groote & Bart Minten & Maarten Voors, 2024. "Does access to improved grain storage technology increase farmers' welfare? Experimental evidence from maize farming in Ethiopia," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 137-152, February.
    3. Marshall Burke & Lauren Falcao Bergquist & Edward Miguel, 2019. "Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 785-842.
    4. Brander, Michael & Bernauer, Thomas & Huss, Matthias, 2021. "Improved on-farm storage reduces seasonal food insecurity of smallholder farmer households – Evidence from a randomized control trial in Tanzania," Food Policy, Elsevier, vol. 98(C).
    5. Albuquerque, Rui & de Araujo, Bruno & Brandao-Marques, Luis & Mosse, Gerivasia & de Vletter, Pippy & Zavale, Helder, 2024. "Market timing, farmer expectations, and liquidity constraints," Journal of Development Economics, Elsevier, vol. 168(C).
    6. Gross, Jeremie & Guirkinger, Catherine & Platteau, Jean-Philippe, 2020. "Buy as you need: Nutrition and food storage imperfections," Journal of Development Economics, Elsevier, vol. 144(C).
    7. Wouter Zant, 2022. "Two Birds with One Stone: Technology Adoption and Market Participation through Protection against Crop Failure," Tinbergen Institute Discussion Papers 22-091/V, Tinbergen Institute.
    8. Nindi, Tabitha Charles & Bauchet, Jonathan & Ricker-Gilbert, Jacob, 2023. "Information and the trade-off between food safety and food security in rural markets: Experimental evidence from Malawi," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 170-186.
    9. Lila Cardell & Hope Michelson, 2023. "Price risk and small farmer maize storage in Sub‐Saharan Africa: New insights into a long‐standing puzzle," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 737-759, May.
    10. Magnan, Nicholas & Hoffmann, Vivian & Opoku, Nelson & Gajate Garrido, Gissele & Kanyam, Daniel Akwasi, 2021. "Information, technology, and market rewards: Incentivizing aflatoxin control in Ghana," Journal of Development Economics, Elsevier, vol. 151(C).
    11. Le Cotty, Tristan & Maître d’Hôtel, Elodie & Subervie, Julie, 2023. "Inventory credit to enhance food security in Burkina Faso," World Development, Elsevier, vol. 161(C).
    12. repec:ags:aaea22:335716 is not listed on IDEAS
    13. Omotilewa, Oluwatoba J. & Ricker-Gilbert, Jacob & Ainembabazi, John Herbert & Shively, Gerald E., 2018. "Does improved storage technology promote modern input use and food security? Evidence from a randomized trial in Uganda," Journal of Development Economics, Elsevier, vol. 135(C), pages 176-198.
    14. Shukla, Pallavi & Pullabhotla, Hemant K. & Baylis, Kathy, 2023. "The economics of reducing food losses: Experimental evidence from improved storage technology in India," Food Policy, Elsevier, vol. 117(C).
    15. Nindi, Tabitha C. & Ricker-Gilbert, Jacob & Bauchet, Jonathan, 2020. "Identifying appropriate incentive mechanisms for smallholder farmers to exploit inter-temporal arbitrage opportunities for grain legumes: Experimental evidence from Malawi," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304424, Agricultural and Applied Economics Association.
    16. Wouter Zant, 2023. "How costly is using livestock as a savings device?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(1), pages 77-110, February.
    17. Guigonan S. Adjognon & Daan van Soest & Jonas Guthoff, 2021. "Reducing Hunger with Payments for Environmental Services (PES): Experimental Evidence from Burkina Faso," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 831-857, May.
    18. Arouna, Aminou & Michler, Jeffrey D. & Lokossou, Jourdain C., 2021. "Contract farming and rural transformation: Evidence from a field experiment in Benin," Journal of Development Economics, Elsevier, vol. 151(C).
    19. Delavallade, Clara & Godlonton, Susan, 2023. "Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso," Journal of Development Economics, Elsevier, vol. 160(C).
    20. Steinert, Janina Isabel & Cluver, Lucie Dale & Meinck, Franziska & Doubt, Jenny & Vollmer, Sebastian, 2018. "Household economic strengthening through financial and psychosocial programming: Evidence from a field experiment in South Africa," Journal of Development Economics, Elsevier, vol. 134(C), pages 443-466.
    21. Tristan Le Cotty & Elodie Maître d'Hôtel & Julie Subervie, 2019. "Inventory credit to enhance food security in Africa," CIRED Working Papers hal-02018715, HAL.

    More about this item

    Keywords

    Randomized controlled trial; Hermetic storage; Microfinance; Tanzania; Price seasonality; Maize markets;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:157:y:2022:i:c:s030438782200027x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.