Market Power & Economic Consequences of Post-Harvest Losses in Rwandan Dry Bean Markets

Michael S. Jones, Corinne Alexander and Bruce Smith

No 170659, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: To date there is extremely limited knowledge of the economic consequences of post-harvest losses for smallholders in sub-Saharan Africa. Major contributors to economic losses are price penalties for poor quality marketed grain. This study investigates farm-gate level discounts demanded by rural Rwandan bean traders for insect-damaged dry beans. We use a simplified contingent evaluation methodology with physical grain samples to elicit seasonal damage discount schedules, gathering data from 270 trader interviews in 25 regionally-diverse rural markets, in periods of both grain abundance and grain scarcity. We find that while levels of 5-10% grain damage can generally be sold with a moderate discount, grain with 20-30% damage is largely unmarketable. We additionally use a two-stage model to investigate physical and non-physical drivers of buying insect-damaged grain and, if so, the demanded discount intensity. Results indicate that while grain damage levels play a central role, large volume traders penalize damage less while traders in the seed market, storing before re-sale, or purchasing heavily from farmers (vs. other traders) penalize damage significantly more. Findings have helped develop more evidence-based extension programming for the Post-Harvest Task Force of the Rwandan Ministry of Agriculture. Additionally, derived discount coefficients help evaluate the cost-effectiveness of technologies throughout the region which prevent post-harvest damage.

Keywords: Food Security and Poverty; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 20
New Economics Papers: this item is included in nep-afr, nep-agr and nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170659

DOI: 10.22004/ag.econ.170659

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