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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The enforcement of traditional vegetable marketing contracts in the eastern and central parts of Ethiopia
Author:Haji, JemaISNI
Periodical:Journal of African Economies (ISSN 0963-8024)
Geographic term:Ethiopia
External link:https://doi.org/10.1093/jae/ejq012
Abstract:This study investigates the enforcement of traditional vegetable marketing contracts between producers and traders in Ethiopia using the general conceptual framework of contract enforcement extended to capture the payment at risk. Empirical results show that despite its imperfections, compliance with contractual obligations is mainly due to mutual trust and brokers' mediation. Moreover, results demonstrate the necessity of contractual arrangements that guarantee flexibility without exposing trading partners to the risks of opportunism. A separate analysis of contract enforceability through brokers reveals that farmer's age, whether a buyer is a trader, information access and trader-specific investment have a significant positive impact while family size, frequency of transactions, dependency on the trader, duration of the relationship and distance to the trader have a significant negative impact on contract enforceability through brokers. Furthermore, pooled multinomial Logit regression analysis shows that traders' non-compliance to contractual obligations are mainly due to the risks related to perishability, seasonality, illiteracy and clientele buyer's type. An effective enforcement of vegetable marketing contracts in the study areas may be achieved through governmental and/or private institutions interventions that target market information access, development of cooperatives and associated support programmes. Bibliogr., notes, ref., sum. [Journal abstract]