Sudha Narayanan

Smallholder Participation in Agricultural Value Chains: Comparative Evidence from Three Continents

Supermarkets, specialized wholesalers, and processors and agro-exporters’ agricultural value chains have begun to transform the marketing channels into which smallholder farmers sell produce in low-income economies. We develop a conceptual framework through which to study contracting between smallholders and a commodity-processing firm. We then conduct an empirical meta-analysis of agricultural value chains in five countries across three continents (Ghana, India, Madagascar, Mozambique, and Nicaragua). We document patterns of participation, the welfare gains associated with participation, reasons for non-participation, the significant extent of contract non-compliance, and the considerable dynamism of these value chains, as farmers and firms enter and exit frequently.

Smallholder attrition in contract farming schemes in India: extent, causes, and concerns

This paper maps the extent and causes of farmer exit from contract farming arrangements in southern India using survey data for five schemes: cotton, gherkins, papaya, marigold, and broiler chickens. The paper finds that farmer attrition is quite widespread and that poorer farmers from marginalized social groups are more likely to exit these arrangements. While this is an important policy concern, the study also distinguishes between voluntary exit, where the farmer opts out, versus involuntary exit, where the contracting firm drops the farmer as a supplier because of constraints in delivering quality produce, or the firms interaction with the farmer forces the farmer out. The paper also highlights the episodic nature of farmer participation, wherein farmers leverage opportunities to contract occasionally as part of a dynamic portfolio of alternatives. The paper emphasizes that while involuntary exclusion is of serious concern, voluntary exit and episodic participation are perhaps less important issues f...

Impact of India's Demonetization on Domestic Agricultural Markets

In this paper we estimate the impact on domestic trade in agricultural commodities of Indias demonetization exercise that invalidated 86 of the currency in circulation. Using data on arrivals and prices from close to 3000 regulated markets in India for 35 major agricultural commodities for the period 2011-2017, we focus on short term effects up to 3 months after demonetization, tracking both the impact and recovery. These 35 commodities account for an overwhelming share of land under cultivation and value of production and hence are representative of Indian agriculture in more than one sense. Using earlier years as comparison years, we use a combination of difference in differences techniques and synthetic control methods to identify the causal impact of demonetization. We find that demonetization has displaced domestic agricultural trade in regulated markets by over 15 in the short run settling at 7 after recovery at the end of the 90 day period after demonetization. Trade in perishables was displaced to the extent of 23 in the week following demonetization. It recovered slightly by the end of 90 days, but was still 18 lower than the usual. Most of this decline is on account of the significant decline in prices rather than of arrivals, which appear to have recovered over a period of three months. There are significant differences across commodities but almost all of these are in expected ways. The impacts are sharpest for kharif crops where government intervention is minimal or absent and for perishables and least for crops where farmers are well organized or commodities which governments actively procure. Robustness checks and falsification tests support our findings to a large extent. Overall, it seems to be the case that the monetary contraction embodied in demonetization significantly impacted arrivals and prices, though the price impacts are perhaps more lasting. The findings from this analysis and anecdotal evidence from field visits suggest that the impacts of demonetization potentially have effects that could last beyond the immediate impact.

The 'Discouraged Worker Effect' in Public Works Programs: Evidence from the MGNREGA in India

This study investigates the consequences of poor implementation in public workfare programs, focusing on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in India. Using nationally representative data, we test empirically for a discouraged worker effect arising from either of two mechanisms: administrative rationing of jobs among those who seek work and delays in wage payments. We find strong evidence at the household and district levels that administrative rationing discourages subsequent demand for work. Delayed wage payments seem to matter significantly during rainfall shocks. We find further that rationing is strongly associated with indicators of implementation ability such as staff capacity. Politics appears to play only a limited role. The findings suggest that assessments of the relevance of public programs over their lifecycle need to factor in implementation quality.