The Effect of Value Chain Interventions for Staple Crops: Evidence from Small-Scale Farmers in Nicaragua

Abstract

This paper quantitatively assesses the effect of value chain development projects on market linkages of small-scale farmers of a staple crop and agricultural income. We focus on Nicaraguan bean producers participating in a value chain development project. Using a panel data set, we apply difference-in-differences and instrumental variables estimators to identify causal effects of programme participation. We first quantify the positive direct effect of training on bean sales in terms of quantity and percentage of beans sold in linked markets. Second, we show that intensified commercialisation contributes to total agricultural income, suggesting a positive indirect effect of the intervention. Our results indicate that market linkage of smallholder farmers requires different sets of intervention tools than farm technical assistance.