Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries
This paper analyzes implications of cash constraints for collective marketing, using the case of the Kenyan dairy sector. Collective marketing, for instance through cooperatives, can improve smallholder farmer income but relies on informal, nonenforceable agreements to sell outputs collectively. Sid...
| Main Authors: | , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2017
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/147965 |
| _version_ | 1855534852397334528 |
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| author | Geng, Xin Janssens, Wendy Kramer, Berber |
| author_browse | Geng, Xin Janssens, Wendy Kramer, Berber |
| author_facet | Geng, Xin Janssens, Wendy Kramer, Berber |
| author_sort | Geng, Xin |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper analyzes implications of cash constraints for collective marketing, using the case of the Kenyan dairy sector. Collective marketing, for instance through cooperatives, can improve smallholder farmer income but relies on informal, nonenforceable agreements to sell outputs collectively. Side selling of output in the local market occurs frequently and is typically attributed to price differences between the market and cooperative. This paper provides an alternative explanation, namely that farmers sell in the local market when they are cash constrained because cooperatives defer payments while buyers in local markets pay cash immediately. Building on semiparametric estimation techniques for panel data, we find robust evidence of this theory. High-frequency, high-detail panel data show that farmers sell more in the local market, in particular to buyers who pay cash immediately, in weeks when they have low cash on hand. Moreover, households cope with health shocks by selling more milk in the local market and less to the cooperative, but only in weeks when they are not covered by health insurance. Increased flexibility in payment and the provision of insurance through agricultural cooperatives can potentially reduce side selling and improve the performance of collective marketing arrangements. |
| format | Artículo preliminar |
| id | CGSpace147965 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1479652025-11-06T07:12:46Z Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries Geng, Xin Janssens, Wendy Kramer, Berber dairy cooperatives approximation economic development liquidity households smallholders marketing agricultural cooperatives finance dairy industry This paper analyzes implications of cash constraints for collective marketing, using the case of the Kenyan dairy sector. Collective marketing, for instance through cooperatives, can improve smallholder farmer income but relies on informal, nonenforceable agreements to sell outputs collectively. Side selling of output in the local market occurs frequently and is typically attributed to price differences between the market and cooperative. This paper provides an alternative explanation, namely that farmers sell in the local market when they are cash constrained because cooperatives defer payments while buyers in local markets pay cash immediately. Building on semiparametric estimation techniques for panel data, we find robust evidence of this theory. High-frequency, high-detail panel data show that farmers sell more in the local market, in particular to buyers who pay cash immediately, in weeks when they have low cash on hand. Moreover, households cope with health shocks by selling more milk in the local market and less to the cooperative, but only in weeks when they are not covered by health insurance. Increased flexibility in payment and the provision of insurance through agricultural cooperatives can potentially reduce side selling and improve the performance of collective marketing arrangements. 2017 2024-06-21T09:23:35Z 2024-06-21T09:23:35Z Working Paper https://hdl.handle.net/10568/147965 en https://hdl.handle.net/10568/150570 https://hdl.handle.net/10568/35059 https://hdl.handle.net/10568/147964 https://doi.org/10.2499/p15738coll2.133514 Open Access application/pdf International Food Policy Research Institute Geng, Xin; Janssens, Wendy;and Kramer, Berber. 2017. Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries. IFPRI Discussion Paper 1602. Washington, DC: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/147965 |
| spellingShingle | dairy cooperatives approximation economic development liquidity households smallholders marketing agricultural cooperatives finance dairy industry Geng, Xin Janssens, Wendy Kramer, Berber Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title | Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title_full | Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title_fullStr | Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title_full_unstemmed | Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title_short | Liquid milk: Cash constraints and day-to-day intertemporal choice in financial diaries |
| title_sort | liquid milk cash constraints and day to day intertemporal choice in financial diaries |
| topic | dairy cooperatives approximation economic development liquidity households smallholders marketing agricultural cooperatives finance dairy industry |
| url | https://hdl.handle.net/10568/147965 |
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