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Inventory credit as a commitment device to save grain until the hunger season

Author

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  • Tristan Le Cotty

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Elodie Maître d'Hôtel

    (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Raphaël Soubeyran

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Julie Subervie

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract
In January 2013, we collected data from 653 farmers in Burkina Faso, whowere asked hypothetical questions about risk aversion and time discounting. Ten months later, these farmers were offered the opportunity to participate in an inventory credit system, also called warrantage, in which they receive a loan in exchange for storing a portion of their harvest as a physical guarantee in one of the newly-built warehouses of the program. We found that farmers who exhibit stronger hyperbolic preferences are significantly more likely to participate in the warrantage system than other, otherwise similar, farmers. We interpret this result as evidence that farmers use warrantage as a means to commit to saving a portion of their crop until the lean season, which may improve their capacity to ensure the food security of their household

Suggested Citation

  • Tristan Le Cotty & Elodie Maître d'Hôtel & Raphaël Soubeyran & Julie Subervie, 2018. "Inventory credit as a commitment device to save grain until the hunger season," CIRED Working Papers hal-01947421, HAL.
    • Handle: RePEc:hal:ciredw:hal-01947421
    Note: View the original document on HAL open archive server: https://hal.umontpellier.fr/hal-01947421
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    References listed on IDEAS

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    Cited by:

    1. Tristan Le Cotty & Elodie Maître d'Hôtel & Julie Subervie, 2019. "Inventory credit to enhance food security in Africa," CIRED Working Papers hal-02018715, HAL.
    2. Tristan Le Cotty & Elodie Maitre d'Hotel & Subervie Julie, 2019. "Inventory credit to enhance food security in Africa," CEE-M Working Papers hal-02018715, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    3. Alexia Stokes & Géraldine Bocquého & Pascal Carrère & Raphaël Conde Salazar & Marc Deconchat & Léo Garcia & Antoine Gardarin & Christian Gary & Cédric Gaucherel & Mamadou Gueye & Mickael Hedde & Franç, 2023. "Services provided by multifunctional agroecosystems : Questions, obstacles and solutions," Post-Print hal-04056486, HAL.
    4. Le Cotty, Tristan & Maître d’Hôtel, Elodie & Subervie, Julie, 2023. "Inventory credit to enhance food security in Burkina Faso," World Development, Elsevier, vol. 161(C).
    5. Tabitha Nindi & Jacob Ricker‐Gilbert & Jonathan Bauchet, 2024. "Incentive mechanisms to exploit intraseasonal price arbitrage opportunities for smallholder farmers: Experimental evidence from Malawi," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 330-353, January.
    6. repec:ags:aaea22:335439 is not listed on IDEAS
    7. Gross, Jeremie & Guirkinger, Catherine & Platteau, Jean-Philippe, 2020. "Buy as you need: Nutrition and food storage imperfections," Journal of Development Economics, Elsevier, vol. 144(C).
    8. Ambler, Kate & de Brauw, Alan & Herskowitz, Sylvan & Pulido, Cristhian, 2023. "Viewpoint: Finance needs of the agricultural midstream," Food Policy, Elsevier, vol. 121(C).
    9. Valentina Hartarska & Jingfang Zhang & Denis A. Nadolnyak, 2023. "Scope economies from rural and urban microfinance services," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1138-1167, April.
    10. Lila Cardell & Hope Michelson, 2023. "Price risk and small farmer maize storage in Sub‐Saharan Africa: New insights into a long‐standing puzzle," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 737-759, May.

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