Market Access and Quality Upgrading: Evidence from Four Field Experiments
- American Economic Review (Forthcoming)
Smallholder farming in many developing countries is characterized by low productivity and low quality output. Low quality limits the price farmers can command and their potential income. We conduct a series of experiments among maize farmers in Uganda to shed light on the barriers to quality upgrading and to study its potential. First, we document that quality is low but partly observable. Second, we show that the causal return to quality is zero, suggesting that the market for quality maize is effectively missing. Third, we generate experimental variation in access to a market for premium quality maize, combined with training on agricultural best-practices, and document large increases in both farm productivity and income. Fourth, we show that agricultural training alone does not affect agricultural outcomes. Our findings reveal the importance of demand-side constraints in limiting rural income and productivity growth.
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