Affiliation:
1. School of Business and Economics Vrije Universiteit Amsterdam Vrije Netherlands
2. Department of Global Health, Amsterdam UMC University of Amsterdam Amsterdam Netherlands
3. Partnership for Economic Policy Nairobi Kenya
4. Faculty of Economics and Business University of Amsterdam Amsterdam Netherlands
5. Wageningen Economic Research Wageningen University and Research Wageningen Netherlands
Abstract
AbstractWe evaluate the impact of a producer organization avocado contract farming intervention in Kenya that included (1) an agreement to sell to an avocado exporting company, (2) access to training, and (3) support to gain group‐level Global Good Agricultural Practices (GLOBALG.A.P.) certification as main activities. Using a (nonexperimental) doubly robust difference‐in‐differences design with farm‐level panel data from 2015 and 2017, we show that farmers began selling to the contracted company, were recently trained and received the GLOBALG.A.P. certification. However, the intervention's uptake was less than perfect, especially concerning the procurement aspect of the contract, suggesting widespread side selling. In terms of outcomes, contract farming nevertheless significantly improved sales prices and reported quality, increased direct sales to companies, and led to more planted trees, but also increased total production costs. The effects are driven by the Hass avocado variety, which is in higher demand in export markets and the contracted avocado variety. No significant income and other welfare effects were found.