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Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru









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    Booklet
    Fair prices for Irish potatoes in Rwanda
    A new price-setting mechanism
    2024
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    Rwanda is home to around 300 000 Irish potato smallholder farmers and is one of the top ten producers of Irish potatoes in Africa, with an estimated production of about 908 000 tonnes in 2022. They are readily available as they are grown in most regions and are a key crop for national food security. Irish potatoes are also a main food staple in the Rwandan diet thanks to their nutritional value and are culturally important in Rwandan cuisine. However, despite various policy efforts in place, market prices have risen so much so that they doubled in price from RWF 262 per kg in 2021 to RWF 561 per kg in 2023. Against this backdrop, the Government of Rwanda requested policy analysis support from FAO’s Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme to evaluate the current price-setting mechanism used to set the reference price that farmers can expect to fetch at “farm gate”. The study recommends a new formula to calculate a reference price that should include wholesale and retail prices, have up-to-date cost figures, and account for a simple inflation adjustment. It also recommends stakeholder meetings twice a year – at the beginning of each production season in February and September – up from only once a year, as Irish potatoes are prone to seasonal price volatility. As such, the proposed improvements to the price-setting mechanism would help ensure fair prices for Irish potato farmers.
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    Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders 2006
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    Agroforestry projects have the potential to help mitigate global warming by acting as sinks for greenhouse gasses. However, participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by analysing the implications of transaction and abatement costs in carbon-sequestration projects. A model of project participation is developed, which accounts for the conditions under which both buyers and sellers would be willing to engage in a carbon transaction that involves a long-term commitment. The model is used to identify critical project-design variables (minimum project size, farm price of carbon, minimum area of participating farms). A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the transaction costs imposed by the Clean Development Mechanism of the Kyoto Protocol affect project feasibility.
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    Document
    Identifying the factors that influence small-scale farmers' transaction costs in relation to seed acquisition 2004
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    Using an ethnographic approach, this study explores small-scale farmers perceived transaction costs in relation to maize seed acquisition in the Central Valleys of Oaxaca. These farmers have different needs and require seed of diverse maize types with multiple traits in particular combinations. Formal seed distribution has yet to develop in this region and farmers depend mostly on informal seed sources. Issues of information about maize seed, seed transaction negotiation and enforcement are e xamined from a small-scale farmer perspective through the use of qualitative data. Results show that farmers perceived transaction costs are low to negligible in most cases where seed transactions take place locally, and tryst is indicated as a factor which serves to reduce transaction costs to a minimum. Though maybe not a transaction cost in the theoretical sense, the risk of crop failure due to inadequate seed is a main concern for farmers in relation to seed transactions.

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