Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso

Incentive mechanisms to exploit intraseasonal price arbitrage opportunities for smallholder farmers: Experimental evidence from Malawi

“…As suggested by previous literature, access to credit markets could influence farmers' demand to store and hold legumes for sale later in the year by solving credit constraints, which are known to be binding (Aggarwal et al, 2018; Basu & Wong, 2015; Burke et al, 2019; Channa et al, 2022; Delavallade & Godlonton, 2023; Stephens & Barrett, 2011). Access to output markets likely play a similar role.…”

“…The existing literature has investigated this seemingly puzzling behavior. It has been found to relate to important constraints such as (i) lack of effective storage technologies (Aggarwal et al, 2018; Brander et al, 2021; Chegere, 2018; Kadjo et al, 2018; Omotilewa et al, 2018); (ii) harvest period cash and liquidity constraints that push farmers to liquidate their grain stocks in order to address urgent household expenses (Dillon, 2021; Kadjo et al, 2018; Sun et al, 2013); (iii) limited access to credit markets (Basu & Wong, 2015; Burke et al, 2019; Casaburi et al, 2014; Channa et al, 2022; Delavallade & Godlonton, 2023; Stephens & Barrett, 2011); (iv) limited access to output markets due to high transaction costs (Bernard et al, 2017); as well as (v) behavioral and social challenges including impatience, self‐control, and social pressure to share, which limit farmers' commitment to store grain (Aggarwal et al, 2018; Ashraf et al, 2006; Baland et al, 2011; Basu, 2014; Brune et al, 2015; Delavallade & Godlonton, 2023).…”

“…It is possible that when farmers store their legumes individually at home (as in T1), they are likely to be tempted to liquidate their legume stocks earlier due to impatience and limited self‐control. In addition, when stocks are stored in plain sight, households may be pressured to sell them earlier than planned whenever their (extended) family has needs (Aggarwal et al, 2018; Delavallade & Godlonton, 2023). Both impatience and social pressure have been shown to be key constraints to cash savings (Anderson & Baland, 2002; Ashraf et al, 2006; Brune et al, 2015; Bryan et al, 2010; Dupas & Robinson, 2013; Thaler & Shefrin, 1981).…”

“…Warehouse receipt system programs are designed to facilitate commodity trade by enabling aggregation of known commodity quality and quantities from farmers. Though several papers have estimated the impact of savings through village grain banks type systems (Aggarwal et al, 2018) or warehouse receipt systems programs (Casaburi et al, 2014;Delavallade & Godlonton, 2023;Le Cotty et al, 2019), to our knowledge ours is the first to directly compare the effectiveness of these two types of commitment devices. 1 Our results indicated that T2 (technology + village storage) had the largest impact on the outcomes of interest over the year following the intervention.…”

“…Most of the previous smallholder based empirical studies that attempt to alleviate post-harvest constraints focused on maize storage (Aggarwal et al, 2018;Burke et al, 2019;Channa et al, 2022;Stephens & Barrett, 2011). Exceptions to this are Delavallade and Godlonton (2023), whose intervention allowed storage of up to nine different crops (participants stored mostly maize and sorghum), and Casaburi et al (2014), whose intervention focused on palm oil. Legumes are a relevant crop to study these issues because they are relatively higher value, often experience more seasonal price variation, and are more susceptible to insect pests in storage than is maize.…”