Impact of Supermarket Procurement System on Farmers' Credit Access

Philippe Marcoul () and Luc Veyssiere

No 43862, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: In developing countries, modern production contracts offered by supermarkets or agro-export firms entail a loan component under the form of input advances. Like traditional moneylenders, supermarkets want to make sure that this investment is not diverted. However, unlike moneylenders, supermarkets do care about the attributes of the product (form, quality, food safety, etc.). Whether such attributes are present in the harvested product is largely influenced by the advice and the extension services received by the farmer. We built a financial contracting model where we show that supermarkets, choosing to forgo specialization, optimally delegate to a multi-tasking agent both the monitoring and the advisory missions. This contract is shown to potentially enhance credit access for small farmers and sometimes to involve excessive monitoring.

Keywords: Agricultural Finance; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 10
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/43862/files/601a.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:43862

DOI: 10.22004/ag.econ.43862

Access Statistics for this paper

More papers in 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().