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 identified the determinants of side selling by coffee cooperative farmers in southwest Ethiopia. The bootstrapping technique was applied to extract average partial effects from the model coefficients. Certified, elder and educated farmers who have off-farm income and trust in the cooperative leadership have been found to side-sell significantly less. Nonetheless, cooperative group size and late payment favoured more side selling. Based on these findings, possible interventions are highlighted for improving cooperative members’ commitment and the performance of coffee cooperatives in the region.     

Learning from the Mondragón cooperative experience

The Mondragón cooperative complex in the Basque country of Spain is recognized as the world’s most impressive case of industrial cooperative development. The complex links together industrial, service, and agricultural cooperatives with a bank and a series of educational cooperatives. The continued expansion of the complex defies the conventional wisdom that worker cooperatives can only survive briefly in special niches not of interest to multi-national businesses. Mondragón’s dynamic growth and development cannot be due to some special features of the Basque culture. Success is due in part to the extraordinary vision and leadership of the founder, father José María Arizmendiarrieta, to the social inventions he created, and to theorganizational culture that he and his followers built to guide the complex. William Foote Whyte is professor emeritus (1979) in Cornell University’s New York State School of Industrial and Labor Relations. He continues to be active in the extension division of the School as research director of Programs for Employment and Workplace Systems. His best known book isStreet Corner Society. With Kathleen King Whyte, he publishedMaking Mondragón: The Growth and Dynamics of the Mondragón Cooperative Complex. His latest book is an autobiography,Participant Observer.     

Local Public-Services Provision under Public–Private Partnerships: Contractual Design and Contracting Parties Incentives

When deciding to resort to a PPP contract for the provision of a local public service, local governments have to consider the demand risk allocation between the contracting parties. In this article, I investigate the effects of demand risk allocation on the accountability of procuring authorities regarding consumers changing demand, as well as on the cost-reducing effort incentives of the private public-service provider. I show that contracts in which the private provider bears demand risk motivate more the public authority from responding to customer needs. This is due to the fact that consumers are empowered when the private provider bears demand risk, that is, they have the possibility to oust the private provider in case of non-satisfaction with the service provision, which provides procuring authorities with more credibility in side-trading and then more incentives to be responsive. As a consequence, I show that there is a lower matching with consumers’ preferences over time when demand risk is on the public authority rather than on the private provider, and this is corroborated in the light of two famous case studies. However, contracts in which the private provider does not bear demand risk motivate more the private provider from investing in cost-reducing efforts. I highlight then a tradeoff in the allocation of demand risk between productive and allocative efficiency. The striking policy implication of this article for local governments would be that the current trend towards a greater resort to contracts where private providers bear little or no demand risk may not be optimal. Local governments should impose demand risk on private providers within PPP contracts when they expect that consumers’ preferences over the service provision will change over time.     

The Feminisation of Agriculture with Chinese Characteristics

The objectives of this article are to assess whether or not the feminisation of agriculture is occurring in China, and if so, to measure its impact on productivity. To meet these objectives, we rely on three data sets that allow us to explore who works on China's farms and the effects of the labour allocation decisions of rural households on productivity. We find that since the late 1990s, the role of women has increased in both the supply of farm labour and in the duties that they take on in the management of farms. While this expansion is important, we further demonstrate that when women do a majority of farm work or manage the farm, their farms are equally efficient as farms managed by men.     

The collapse of the fisheries sector in Kyrgyzstan: An analysis of its roots and its prospects for revival

The disintegration of the Soviet Union had profound economic and social effects on many of the newly independent transition economies. Nowhere was this more so than in the fisheries sector – with one of the biggest production shortfalls occurring in Kyrgyzstan, following the collapse of lake capture and pond-culture production. In 2005, aggregate landings were just 48 tonnes – barely 3 per cent of the catch level recorded in 1989. This article has two objectives. First it analyses the extent to which the dissolution of the Soviet Union can explain the collapse of the fisheries sector in Kyrgyzstan. Second, in the light of these findings, it considers what practical steps, if any, might be taken to revitalize the sector.     

Farm‐to‐market transaction costs and specialisation in small‐scale agriculture: Explorations with a non‐separable household model

Using an integrated household model with endogenous transaction costs, this article illustrates how, even in the absence of risk, the tension between gains from specialisation and corresponding increases in transaction costs may lead to enterprise diversification on small farms. A numerical example illustrates that this tension may contribute to the prevalence of inter‐cropped cash‐crops on small farms, in apparent disregard for foregone yield and income from greater specialisation involving pure‐stands. By implication, measures that augment households’ abilities to override trading costs may be critical complements to efforts seeking to raise productivity and incomes in small‐scale agriculture via increased specialisation.     

Fair Trade-Organic Coffee Cooperatives,Migration, and Secondary Schooling in Southern Mexico

We explore three trends in rural southern Mexico (Fair Trade coffee, migration, and conditional cash transfers) that could explain the rapid rise in education from 1995–2005 using survey data from 845 coffee farming households in Oaxaca and Chiapas, Mexico. Results from a household fixed-effects model show that household participation in a Fair Trade-organic cooperative contributed to about a 0.7 year increase in schooling for girls. US migration opportunities appear to have even stronger positive impacts on schooling for females. Although participation in Fair Trade-organic cooperatives appears also to have increased male schooling, increased migration opportunities have had an indeterminate effect for males.     

Sugar Co-operatives in Maharashtra: A Political Economy Perspective

The origins of the powerful sugar lobby in Maharashtra date back to the 1950s. Post Independence, cooperatives formed an integral part of the Congress vision of ‘rural development with local initiative’. A ‘special’ status was accorded to the sugar cooperatives and the government assumed the role of a mentor by acting as a stakeholder, guarantor and regulator. Persistence of the maze of regulations instituted five decades ago, despite its stated rationale being thwarted, suggests that it is maintained by entrenched vested interests. This paper calls for a fresh start with minimal regulations. The teething problems and initial market failures that may occur cannot be worse than the continuing saga of government failure.     

TOWARDS GOOD GOVERNANCE: A HALF CENTURY OF INDIA'S ADMINISTRATIVE DEVELOPMENT

Since independence, India has undertaken a number of efforts to establish an effective development-oriented, citizen-friendly and responsive system of administration to contribute toward good governance. While the traditional system of public administration was appropriate for the pre-independence period, subsequent social, economic and political changes necessitated radical changes in policies and their implementation. A set of new issues called for a thorough reorientation of the system of public administration. Administrative development had, therefore, to be planned and executed in the face of ever-growing conflicts between various non-state actors/institutions and the state. The strategies for administrative development adopted not only included evolving appropriate politico-administrative institutions for democratic governance, but also a consistent effort on reorienting the formal and informal aspects as well as improving the techno-professional skills of bureaucracy at all levels. In addition to this an appropriate balance and cooperation between the public and private sectors was essential in the context of growing liberalization and globalization.The experience of India emphatically demonstrates that an active and consociational association of citizens at all levels of the governmental structure is critical to the process of modernization of the state and administration. The dispersion of political and administrative power among various groups and regions emerges as a useful strategy for ensuring the continuity of the state and democracy in a vast country with numerous ethnic, religious and linguistic divisions.     

Nicaraguan peasant cooperativism in tension: adaptive strategy or counter-movement

Abstract

Based on qualitative research conducted in three regions of Nicaragua, this paper examines the contribution of the communitarian approach to the new rurality in understanding the orientation and tensions within the peasant cooperative movement. The thematic analysis of 30 semi-structured interviews carried out with members of grassroots cooperatives reveals two main categories of motivation for engagement within the cooperative movement. A first set of motivations shows the will to transform the productive structures through small producer organisations to better adapt to the challenges imposed by global economic integration. A second set of motivations highlights broader socio-political objectives that seem to crystallise around the desire to build long-term alternatives to the exclusionary process of neoliberal globalisation. I explore these motivations in light of the distinction between reformist and communitarian approaches to the new rurality. I outline that the articulation of these two approaches, and more particularly the contribution of the communitarian approach, makes it possible to better understand the tensions within the cooperative movement in regard to socio-economic challenges. On this basis I call for a greater consideration of the communitarian dimensions of the new rurality to better define the role of the state, public policies and non-governmental organisations in supporting these phenomena.     

Governance Strategies and Welfare Effects: Vertical Integration and Contracts in the Catfish Sector in Vietnam

Abstract

Using an original dataset from the Vietnamese catfish sector, we study the impact of vertical coordination options on household welfare and the implications of different stages of vertical coordination for the success of the whole sector. The welfare gain from contract farming and employment on processor-owned estate farms is estimated using a maximum simulated likelihood estimator. Our results show positive welfare effects from participating in contract farming, but not from employment on processor-owned estate farms. The results imply that contract farming presents opportunities for economic growth, but additional effort is required to make the contracts more accessible to smallholders.     

Efficiency differentials in peasant agriculture and their implications for development policies

This paper reviews the theoretical and empirical work on allocative efficiency in traditional agriculture and presents a new study of technical efficiency among Tanzanian cotton farmers. The theoretical arguments are shown to apply primarily in a competitive context that differs significantly from that in which peasant farms operate. Re‐analysis of earlier empirical studies shows that, on average, the marginal value products of inputs differ by more than 40 per cent from the marginal factor costs to which they should be equated under allocative efficiency. Our own study among Tanzanian cotton farmers in Geita District reveals that output could be increased by 51 per cent if all farmers achieved those levels of technical efficiency that were in fact achieved by the best farmers in the sample using the same inputs and technologies that the less efficient used. These results indicate that the efficiency hypothesis may not be applicable to much of peasant agriculture and that development policies might fruitfully place more emphasis on raising large numbers of farmers closer to the relatively high efficiency levels achieved by some of their neighbors.     

Capitalising on the financialisation of agriculture: Cargill’s land investment techniques in the Philippines

This paper has two objectives. First, it aims to analyse how transnational agricultural traders are positioning themselves in, and capitalising on, the financialisation of agriculture. Second, it seeks to position land investments in this process. This is done by situating Cargill – one of the largest agricultural trading companies in the world – into the transformation of agriculture in the world economy and by assessing its strategies of adaption through private equity-driven land investment in the Philippines. The article notes, following Burch and Lawrence, that the transforming position of agriculture is created by reshaping relationships in the agri-food supply chain and is based on the logic of finance capital. An example of this process from the Philippines is provided, where Cargill’s private equity arm – Black River Asset Management– is investing in land through equity acquisitions of a Philippine company, Agrinurture, in a manner that allows the company to adapt to national and local dynamics. The evolving and deepening connection between finance and agriculture is presented first, followed by a discussion of how Cargill fits into this transition in the Philippine context.     

Synergies between Different Types of Agricultural Technologies in the Kenyan Small Farm Sector

Sustainable intensification of agriculture will have to build on various innovations, but synergies between different types of technologies are not yet sufficiently understood. We use representative data from small farms in Kenya and propensity score matching to compare effects of input-intensive technologies and natural resource management practices on household income. When adopted in combination, positive income effects tend to be larger than when individual technologies are adopted alone. The largest gains occur when improved seeds are adopted together with organic manure and zero tillage. These results point at important synergies between plant breeding technologies and natural resource management practices.     

State economic development strategy: Designing a tool for evaluating policy

In 1987, the new governor of Pennsylvania introduced a plan designed to protect “old” jobs while encouraging public and private investment in targeted “growth” industries. Recognizing that “targeting growth opportunities” was, at best, an uncertain enterprise, the Department of Labor and Industry suggested a program be implemented that would monitor these “key” sectors. To be cost-effective, this evaluation effort would need to be sufficiently timely and sensitive to allow for mid-course corrections. In this paper, we describe an effort to design and implement such a program.     

China's collectivisation puzzle: A new resolution

According to total factor productivity trends in Chinese agriculture, China achieved productivity gains both when collectivising (1954–58) and when decollectivising (1979–84) its agriculture. If the productivity gains from decollectivisation were due mainly to eliminating the incentive problems of collective farms, how the initial collectivisation could also have been associated with gains in productivity presents a major historical puzzle. We suggest as an answer the possibility that agricultural production in China was widely organised on a household basis until 1958, despite the collectivisation of property rights, and that the formation of the agricultural producers’ co‐operatives reduced the inefficiencies in factor allocation that existed following China's land reform.     

The dynamics of de‐delegation: A principal–agent explanation of the reversal of private authority in international sport governance

What explains the reversal of transnational private rule‐making authority? Embedding constructivist insights within a rational principal–agent model, this article advances a five‐step sequential process that nuances the traditional explanation of delegitimation. It argues that entrepreneurs must first successfully promote the belief that the high costs of ineffective private policies follow from the private rule‐setter's flawed institutional attributes. Subsequently, a de‐delegation solution that minimizes transaction and uncertainty costs must be proposed. The examination of two cases in the field of international sport governance, namely the deliberate reversal of private authority in anti‐doping governance and the lack thereof in anti‐match‐fixing governance, lends support to these propositions. It sheds new light on the creation of the World Anti‐Doping Agency (WADA) and explains why there will probably be no counterpart to fight match‐fixing.     

The Other Side of the COIN: Private Security Companies and Counterinsurgency Operations

The Iraq War was a watershed regarding the scope of battlefield support by Private Security Companies (PSC). Skeptics soon raised concerns about these new actors being an impediment to the success of the very same operations they are meant to support. According to the critics, PSCs are grist to the mill for insurgents as they employ aggressive tactics and thereby alienate the population, cause credibility problems because they enjoy impunity, and increase coordination problems since they are not subordinated under the military chain of command. This article argues that this is not a necessary result of their employment, but rather the consequence of a lack of preparedness to operate alongside PSCs. However, the military is accustomed to adapting to new unexpected circumstances. Hence, when problems occurred, the armed forces underwent a trial and error learning process that improved PSC employment. The empirical picture supports this view. Initially, the counterinsurgency effort did indeed suffer from the actions, lack of oversight, and lack of coordination of PSCs. However, over the course of the Iraq War, most of the shortfalls were either improved significantly or even resolved.     

Land consolidation as a factor for rural development in Moldova

This article draws on data from several recent surveys in Moldova to examine the question of land consolidation within the process of agrarian reform. It suggests that larger individually owned farms produce higher family incomes than smaller ones and thus farm augmentation makes a positive contribution to the well being of the rural population. Also, for farms of a given size, productivity increases as the number of parcels decreases. The article then proceeds to discuss the actual use of various market mechanisms for land consolidation, including leasing as well as buying and selling of land. According to various surveys, farms with leased land are in fact larger than farms that rely on owned land only. The article argues that land consolidation leads to better economic performance, while land leasing is actually used as a market mechanism for consolidation, which benefits both lessees, through increased farm incomes, and lessors, through income from lease payments for their land.     

The economics of surplus squeeze under peripheral socialism: An Ethiopian illustration

The article explores the question of appropriate development strategy for the so-called peripheral socialist countries using Ethiopia as an example. Based on the economics of surplus and the nature of industrialization in late-socializing countries, the Ethiopian regime's “surplus squeeze” strategy is critically examined. It is shown that such a strategy, whatever its short-term goals, is detrimental to the long-term generation of sizable economic surplus and the provisioning of basic needs. It is then argued that a viable alternative is the New Economic Policy (NEP) model of a mixed economy where the state, cooperative, and private sectors grow side by side for a while on the basis of labor accumulation. NEP will eventually have to be phased out as it exhausts its economic potential and threatens the goal of building a self-reliant, egalitarian society. College of William and Mary