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The Original Study
This study evaluates the effects of an intervention aimed at improving access of Kenyan farmers to horticultural export markets through the provision of financial and technical services. Smallholder farmers in Kenya face several constraints inhibiting effective access to export markets. Limited knowledge of pricing, excessive presence of middlemen and a lack of access to credit significantly reduce export opportunities. To overcome these barriers, the Kenyan nongovernmental organisation(NGO) Drum-Net designed in 2004 a micro-credit programme in which the NGO acts as a neutral third party linking small farmers to commercial banks, crop exporters and transportation facilitators. The intervention starts with a 4-week course on good agricultural practices. Drum-Net then organises participating farmers into groups of five members jointly liable on all individual credits. In addition, the NGO negotiates prices with exporters and supervises produce transportation. Exporters directly pay Drum-Net, which then transfers the funds to farmers’ individual bank accounts, deducting any pending loan repayments.
Development economists need to better understand the decision making process behind export-focused crop adoption for developing world farmers. Agricultural commercialization, based on a comparative advantage in labor intensive crops, is touted as a key step in the transition from subsistence cropping to high-value production. Researchers highlight a number of market failures as the impediments supposedly preventing developing world farmers from reaping the benefits of agricultural commercialization. This replication study, through robustness checks and the inclusion of three alternative data sets, reexamines recent work on valuing a Kenyan export-promotion scheme. The research will specifically evaluate the original article's findings that only first time adopters benefited from the intervention, that the provision of credit did not increase household welfare outcomes, and the omission of gender as a potential influence on production/adoption decisions.