Deutschmann, J., Bernard, T., and Yameogo, O. 2022. Contracting and quality upgrading: Evidence from an experiment in Senegal. Working paper, University of Chicago. The authors conduct a randomized experiment with groundnut producers in Senegal to address barriers to quality upgrading. They offer a bundled contract to encourage use of a new quality-improving technology. Producers randomly offered the contract are significantly more likely to purchase the technology. In areas where quality is otherwise lower due to agro-climatic conditions, producers are significantly more likely to comply with international standards. At the market level, the presence of quality insensitive buyers undermines the relational contracting arrangement between farmers and cooperatives. The authors find that producers increase output sales to cooperatives on average, but this increase is small in magnitude.
