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Innovations in Insuring the Poor

Risk and poverty are inextricably linked. Susceptibility to risk is a defining feature of what it means to be poor. Poor people often live in environments characterized by high weather and disease risk, and it is poor households that have the fewest tools to deal with drought, floods, and disease when they occur. Breaking the link between risk and poverty by insuring poor people both lessens the affliction of poverty and allows poor people to participate in income and growth.

Contract Farming and Smallholder Incentives to Produce High Quality: Experimental evidence from the Vietnamese Dairy Sector

Producer penalties and bonuses can help reduce the incidence of side-selling and better align farmers' incentives with purchasers'. Bonuses can help ensure that farmers take the necessary measurements to produce the quality characteristics often present in contract farming arrangements. A randomized controlled experiment with milk producers in Vietnam showed that the presence of penalties and bonuses drove farmers to higher input use which resulted in higher quality milk.

Potential Collusion and Trust: Evidence from a Field Experiment in Vietnam

Part of the constraints facing contract farming are the lack of proper procedures for measuring quality in production. If the buyer handles quality assurance then they may have an incentive to report that production was of lower quality in order to offer a lower price. The producer knowing this, in turn will lower their expectation to the income from contact farming and be less likely to contract.

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