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Can risk averse competitive input providers serve farmers efficiently in developing countries ?

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  • Makdissi, Paul
  • Wodon, Quentin

Abstract

Under price ceilings and quality floors for agricultural inputs in cash crop sectors in developing countries where credit markets are weak, imperfect information on the ability of farmers to pay for their inputs at the end of the cropping season may lead the decentralized production of those inputs by risk averse private input providers to be inefficient. A coordinating agency and/or subsidies for new farmers could help to produce and distribute more agricultural inputs, thereby increasing the profits for input providers while also enabling more farmers to produce the crops that are key to their livelihood.

Suggested Citation

  • Makdissi, Paul & Wodon, Quentin, 2009. "Can risk averse competitive input providers serve farmers efficiently in developing countries ?," Policy Research Working Paper Series 4922, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4922
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    References listed on IDEAS

    as
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    3. Stephen R. Boucher & Michael R. Carter & Catherine Guirkinger, 2008. "Risk Rationing and Wealth Effects in Credit Markets: Theory and Implications for Agricultural Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 409-423.
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    6. Makdissi Paul & Wodon Quentin, 2005. "The Impact on Farmers of Privatizing Parastatal Agricultural Monopsonies," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(2), pages 1-11, September.
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    More about this item

    Keywords

    Rural Poverty Reduction; Economic Theory&Research; Crops&Crop Management Systems; Access to Finance; Rural Development Knowledge&Information Systems;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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