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Tuesday, November 22nd 2022

Tanguy Bernard (University of  Bordeaux) will present "Contracting and quality upgrading: evidence from an experiment in Senegal", joint with Joshua W. Deutschmann and Ouambi Yameogo.

We conduct a randomized experiment with groundnut producers in Senegal to address barriers to quality upgrading. We offer a bundled contract to encourage use of a new quality-improving technology. Producers randomly offered the contract are significantly more likely to purchase the technology. In areas where quality is otherwise lower due to agro-climatic conditions, producers are significantly more likely to comply with international standards. At the market level, the presence of quality insensitive buyers undermines the relational contracting arrangement between farmers and cooperatives. We find that producers increase output sales to cooperatives on average, but this increase is small in magnitude.