Can Risk Averse Competitive Input Providers Serve Farmers Efficiently in Developing Countries

Paul Makdissi () and Quentin Wodon ()

No 0808E, Working Papers from University of Ottawa, Department of Economics

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.

Keywords: Farm inputs; Risk Aversion; Price Control; Public Good (search for similar items in EconPapers)
JEL-codes: H41 Q12 (search for similar items in EconPapers)
Date: 2008
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Working Paper: Can risk averse competitive input providers serve farmers efficiently in developing countries ? (2009)
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