SP C2: Collective Action and Incentives for Performance

The integration of developing country smallholder farmers into high-value markets is constrained by high transaction costs and other market imperfections. Farmer collective action through cooperatives can help reduce transaction costs and also contribute to a better bargaining position. It was shown that membership in cooperatives facilitates farmers' integration into high-value supply chains and contributes to improved prices and incomes. While numerous studies look at the effects of cooperative membership on farmers' marketing performance, very few explicitly analyze factors that determine whether or not cooperatives perform successfully, especially in a small farm developing country context. Hence, it is not clear what mechanisms can help overcome potential problems in cooperative internal organization. Such knowledge is important to better link smallholders to markets, especially against the background of rapidly changing framework conditions in agri-food systems. Subproject C2 investigates how the organizational structure of cooperatives can influence their integration and performance in high-value supply chains. The research builds on framed field experiments with farmers in developing countries.

Topics of doctoral research:

• Impact of team training on free-riding behavior in farmer cooperatives
• Principal-agent problems and incentives to increase worker productivity in food-processing companies
• Can competitive payment schemes crowd-out cooperation?

Doctoral researchers involved:

Doctoral researchers of the first cohort:
Edward Asiedu

Doctoral researchers of the second cohort:
Kerstin Grosch

Doctoral researchers of the third cohort:
Christina Andrea Martini

Principal investigators/supervisors:
Marcela Ibanez