introduction imperfect information and rural credit markets puzzles and policy perspectives rural credit markets have been at the center of policy intervention in developing countries over the past forty years many governments supported by multilateral and bilateral aid agencies have devoted considerable resources to supplying cheap credit to farmers in a myriad of institutional settings the results of many of these interventions have been disappointing and one explanation for this must be that they were based on an inadequate understanding of the workings of rural credit markets the articles in this symposium issue are devoted to empirical and theoretical investigations of rural credit markets in the framework of the imperfect information paradigm the authors show how this framework is useful not only in explaining puzzling features of these markets but also in providing a policy perspective to assess the successes and failures of specific interventions

producer cooperative resettlement projects in zimbabwe lessons from a failed agricultural development strategy abstract zimbabwe epitomizes the contradictions driving the failure of state directed agricultural development policies in its second decade of independence the government takes the credit for the country s agricultural and rural development success zimbabwe s green revolution record in africa is enviable yet this peasantry led success story is problematic it hides serious policy flaws in development strategy namely lack of performance and waste characterizing the model b producer cooperative resettlement projects individually and collectively the cooperatives the government s preferred mode of production are a complete failure lessons for development programs elsewhere and in emergent south africa in particular are clear the political economy of government assistance is not sufficient to produce agricultural surpluses and sustainable development the social economy of cooperation in production organization by africa s traditional farmers also does not necessarily translate into modern cooperatives as zimbabwe s policy makers assumed producer cooperatives are unproductive because of the prevailing organizational culture which enables leading members to seek individual self interest and private gain making it hard for the rank and file to cooperate and work for the common good

change of competition regime and regional innovative capacities evidence from dairy restructuring in france the aim of this article is to analyze how market actors and farmers in particular mobilize collective coordination capacities to face global changes market price or sectorial policies within different regional contexts a multi scale conceptual framework is proposed to analyze market functioning and transformation over time and space we extend commons and fligstein s work on market institutions to define the notion of competition regime as a combination of four market institutions that legitimizes competition strategies we also mobilize ostrom s work on common property rights regimes to show that a competition regime relies on the creation and management of two systems of common pool resources namely innovation capacity and reputation building this paper then shows the relevance of this framework through the case study of the current restructuring of dairy supply chains in mountainous areas in france it shows that market liberalization strongly destabilizes the regional competition regimes that were based on the appropriation of social rights inherent to the national public policies in the hybrid and specific competition regimes existing territorial coordination devices are not directly threatened and can support the development of new cooperative strategies in all cases with the development of a contractual economy farmers are incited to develop or to strengthen coordination devices to become effective market participants through the development of large territorial producers organizations capable of managing milk supply in volume and quality they would be able to take part in the management of the supply chains to do so the present paper suggests that farmers organizations need material and immaterial investments and assistance from regional public players to build new local collective capacities the competition regime framework is an asset for the design of such public supports in accordance with the principle of subsidiarity taking the regional specificity of the markets institutions and collective capacities into account

a damped diffusion framework for financial modeling and closed form maximum likelihood estimation abstract asset price bubbles can arise unintentionally when one uses continuous time diffusion processes to model financial quantities we propose a flexible damped diffusion framework that is able to break many types of bubbles and preserve the martingale pricing approach damping can be done on either the diffusion or drift function oftentimes certain solutions to the valuation pde can be ruled out by requiring the solution to be a limit of martingale prices for damped diffusion models monte carlo study shows that with finite time series length maximum likelihood estimation often fails to detect the damped diffusion function while fabricates nonlinear drift function an alternative method based on ait sahalia s specification test on parametric models is proposed

displaced diffusion option pricing this paper develops a new option pricing formula that pushes the underlying source of risk back to the risk of individual assets of the firm the formula simultaneously encompasses differential riskiness of the assets of the firm their relative weights in determining the value of the firm the effects of firm debt and the effects of a dividend policy with both constant and random components although this setting considerably generalizes the black scholes 1 analysis it nonetheless produces a formula via riskless arbitrage arguments that given estimated inputs is as easy to use as the black scholes formula

selling at the farmgate or traveling to market using detailed survey data from uganda this article examines whether coffee producers sell to itinerant traders or directly to markets where they can get a higher price but must incur a transport cost we find that selling to the market is more likely when the quantity sold is large and the market is close by wealthy farmers are less likely to sell to the market possibly because the shadow value of their time is higher but if they have a large quantity of coffee for sale they are more likely to sell it to the market they are also more likely to travel to a distant market these findings are consistent with their better ability to pay for public transportation we find no evidence that the decision to sell at the farmgate is driven by a self control motive

promoting the role of farmer based organizations for value chain integration the tension between a program s targeting and an organization s investment strategy we use new data on 500 farmer based organizations fbos in ghana and regression analysis to reveal determinants of collective investments and the case of the millennium development authority s mida agricultural program in ghana to demonstrate that development programs offering hard incentives may be counterproductive in promoting collective action we show that when a program sets criteria for participation and offers in cash and in kind support to selected fbos it may promote rent seeking and crowd out equity capital formation this is so because fbos may have formed for the sole purpose of benefitting from incentives offered by the program and thus lack an economic justification which is an important condition for progression through the cooperative life cycle further by setting stringent participation criteria the program may end up selecting younger organizations while it is the more consolidated organizations that are able to connect to business development services bds and engage in more offensive collective action

exploring double side selling in cooperatives case study of four coffee cooperatives in rwanda apart from the difficulty to attract new members leakage of sales outside the cooperative is a major challenge for the coffee cooperatives in rwanda local independent traders still constitute a major market for coffee producers yet cooperatives also accept the produce from non members and pay them the same price our objective in this paper is to analyse the importance of this phenomenon of double side selling we collected data from a sample of 170 coffee farmers we use a probit model to analyse characteristics linked to cooperative membership and to study double side selling we describe the trade relationships between farmers and the cooperative on the one hand and between farmers and traders on the other by the attributes of transaction costs involved in the trade of coffee membership characteristics include easy access to labour land tenure risk aversion and mutual trust between farmers and cooperatives management preference to sell to traders can be explained by the trust farmers seem to have in them after the repeated transactions in credit and basic consumption items and by long term relationships in the community

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

linking smallholders to markets determinants and impacts of farmer collective action in kenya summary this article investigates determinants and impacts of cooperative organization using the example of smallholder banana farmers in kenya farmer groups are inclusive of the poor although wealthier households are more likely to join employing propensity score matching we find positive income effects for active group members yet price advantages of collective marketing are small and high value market potentials have not yet been tapped beyond prices farmer groups function as important catalysts for innovation adoption through promoting efficient information flows we discuss the conditions under which collective action is useful and through what mechanisms the potential benefits emerge

finding default understanding the drivers of default on contracts with farmers organizations under the world food programme purchase for progress pilot during the past two decades food assistance policy has shifted toward local or regional food purchases and away from purchases from donor countries while most local and regional procurement occurs through hard tendering processes open to large scale firms and farms there is growing interest in identifying how and whether to procure from smallholder farmer organizations to date little is known about the drivers of successful contracting with farmers organizations fos we utilize data from the united nations world food programme purchase for progress pilot in three east african countries to predict defaults on contracts we examine four possible explanations country contexts fo characteristics prior experience with contracts and contract modalities and their relationship to local spot market prices the single most important predictor of default is the increase in market prices between contract approval and delivery yet while increases in market prices are linked to increases in default this relationship is decreasing in contract size indicating search costs associated with breaking contracts our findings yield both generalizable and context specific insights about whether and when procuring from smallholder farmers can be successfully integrated into the food assistance toolkit this article is protected by copyright all rights reserved

marketing cooperative vs commission agent the turkish dilemma on the modern fresh fruit and vegetable market in turkey the wholesale markets law was enacted in 1995 to facilitate small scale growers access to the fresh produce market cooperatives and commission agents have thus become the main marketing structures available to small scale fresh produce growers to supply supermarkets and comply with their new requirements in this paper we question the advantages and disadvantages that confront small farmers with respect to those marketing structures to allow for market matching or quality upgrading drawing on ownership and transaction cost arguments we use an analytical framework to identify and compare the costs of these marketing organizations based on data collected through a large number of interviews with stakeholders we show that commission agents and credit cooperatives tend to be more efficient than traditional cooperatives as regards sales performance and decision costs however the lack of apparent competition between commission agents does not allow for sufficient provision of incentives for producers to invest in high quality production consequently credit cooperatives are the only structure progressively turning to strategies of quality upgrading and supermarket supply the flipside of such strategies is that they may lead to the marginalization of small scale farmers

a two step econometric estimation of covariates of side selling the case of coffee cooperatives in southwest ethiopia despite their apparent economic benefit to smallholder farmers cooperatives are vulnerable to the problem of side selling using cross sectional household data and cragg s regression model we ide

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

further results on the constant elasticity of variance call option pricing model the black scholes 4 call option model is a member of the class of constant elasticity of variance call option models proposed by cox 6 while the black scholes model assumes that the volatility or instantaneous variance of return is constant through time the other members of the class allow the volatility to change with the stock price this property is of interest because empirical evidence suggests that returns to common stock are heteroscedastic and also that volatilities implied from the black scholes model and market prices of call options are not constant

making the connection the relationship between fuel poverty electricity disconnection and prepayment metering abstract fuel poverty or inability to afford adequate heating for a reasonable outlay of expenditure is a significant and under researched problem in new zealand the connection between fuel poverty and electricity disconnection or self disconnection is analysed for four cities using prepayment metering to pay for electricity a price comparison analysis on a government sponsored website showed that prepayment metering was more expensive than other payment options this website analysis was supplemented by qualitative data from older people with chronic respiratory disease expressing their views about electricity disconnection and prepayment metering we show that prepayment metering for electricity is more expensive than other payment methods in new zealand and that older people s insights provide valuable context to these issues under the present payment schedule the use of prepayment metering to pay for electricity is not a suitable policy instrument to address fuel poverty which remains problematic the deregulated electricity market continues to lead to increases in the real price of residential electricity and in the number of people in fuel poverty we offer policy suggestions for reducing fuel poverty in new zealand

contractual arrangements between farmer cooperatives and buyers in china the agrofood market in china is dominated by spot market exchanges of small farmers and various small traders with only minor penetration of the modern supply chain at the farmgate the emerging farmer professional cooperatives fpcs are expected to facilitate vertical coordination the overall goal of this study is to investigate the contractual arrangements between the fpcs and the buyers based on a national representative survey of 157 fpcs in china this study shows that 32 of fpcs introduced written contracts in the primary marketing channel contracts are more likely to be adopted in the livestock sector and are positively related to the scale of production while branding promotes contracts between fpcs and buyers public certification of quality and food safety often substitutes for contracts furthermore the membership heterogeneity of fpcs affects an fpc s decision to use contractual arrangements with the buyer

producer relationships and local development in fresh fruit commodity chains an analysis of blueberry production in entre rios argentina craviotti c producer relationships and local development in fresh fruit commodity chains an analysis of blueberry production in entre rios argentina regional studies in current regional perspectives intangible capitals are considered critical assets of regional economies the aim of this article is to analyse the role of networks in the development of blueberry production in the province of entre rios nowadays the most important productive area of argentina it argues that although horizontal networks either private or public private were not particularly important for the emergence of blueberry production in the area they are needed in a situation where a redefinition of the agri food chain is at stake coordination and cooperation networks could help to sustain the continuity of production at the local level and to make local small scale producers viable in a global context craviotti c

why can collective action fail in local agri food systems a social network analysis of cheese producers in aculco mexico collective trademark and regional product qualification in food processing industries have become a growing challenge for farmers in developing countries this challenge is the target of collective action based programs aiming at framing the cooperation context that would enable a local community to turn inherited resources and know how into new market opportunities literature acknowledges that social capital is a crucial local resource for successful collective actions since it is a source of trust and collective commitment within a community this paper deals with testing the role of this resource in the collective action case of the cheese producers in aculco mexico focusing on the connectedness dimension of social capital we propose an original methodology that relies on the multiplex and structural properties of social networks this allows us to disentangle the opposite and ambivalent effects of social capital on the ability of a community to reach the goals assigned by the collective action program our empirical study shows that these critical properties can work in favor of adherence to collective action but can also create elite capture clannish behaviors and entry barriers thus showing a failure of collective action

social desirability opportunism and actual support for farmers market organisations in ethiopia one of the striking issues in the literature on farmers market organisations fmos is that farmers generally report quite positive opinions regarding the services of their fmo while at the same

does cooperative membership improve household welfare evidence from apple farmers in china this paper examines the impact of cooperative membership on farm performance indicators such as apple yields net returns and household income using cross sectional data from a survey of farmers in china an endogenous switching regression model that accounts for selection bias is employed in the analysis the empirical results reveal that cooperative membership exerts a positive and statistically significant impact on apple yields farm net returns and household income a disaggregated analysis also reveals that small scale farms tend to benefit more from cooperatives than medium and large farms

collective action for smallholder market access abstract the opportunity for smallholders to raise their incomes increasingly depends on their ability to compete in the market yet there are many failures in rural markets in developing countries that make it difficult for them to do this understanding how collective action can help address the inefficiencies coordination problems or barriers to market access is particularly important this paper draws on the case studies in this special issue and on other literature to examine the conceptual issues and empirical evidence on the role of collective action institutions in improving market access for the rural poor applying insights from studies of collective action in natural resource management the paper examines what conditions facilitate effective producer organizations for smallholders market access with special attention to the characteristics of user groups institutional arrangements types of products staples perishables and other commodities markets local domestic and international and external environment the paper also identifies policies and interventions that facilitate collective action for market access among smallholders and examines whether the public sector private sector and or civil society is best positioned to provide such interventions

the future of small farms new directions for services institutions and intermediation summary efficient pre and post harvest services are essential if small farms in high potential areas are to intensify production contribute to economic growth and reduce poverty they also matter if small farms in marginal areas are to manage their natural resource base in the face of growing population pressure and climate change difficulties that smallholders face in accessing services are reviewed showing how incentives for commercial delivery of services to smallholders differ between staple food traditional cash crop and high value product supply chains the major challenge in service delivery to smallholders in much of africa concerns coordination of service development and delivery different forms of intermediary institution for achieving such coordination are examined

on the pricing of european and american foreign currency call options abstract this study uses cox ross analysis and dynamic programming techniques to price foreign currency call options we show that under certain conditions the american call price will exceed its european counterpart while under other conditions the two prices will be identical we find that the american premium is a complex function of the degree to which an option is in or out of the money and that this premium is greatest when an option is near in or out we present empirical evidence which shows that the american model significantly improves upon a european model however significant pricing errors associated with the american model remain