Center for Effective Global Action

To sell their surpluses of maize, the main staple in Benin, farmers may choose among three modes of transaction: they may sell under a contract with itinerant traders, or they may sell without a contract at the farmgate or on distant markets. It has been postulated that farmers may choose a profitable mode of transaction if they have good access to information on the prevailing market conditions. Using detailed farm household survey data from Benin, this paper applies the Nested Logit model to test this hypothesis. The results show that farmers are likely to opt for selling at the farmgate without a contract if they have good access to information. However, such a decision may not be related to access to information through the government supported 'Public Market Information System' but rather it is likely to be induced by access to information through farmers' own social networks.