Finding default? Understanding the drivers of default on contracts with farmers’ organizations under the World Food Programme Purchase for progress pilot
利用世界粮食计划署在东非三国的试点数据，研究发现合同签订后市场价格上涨是违约的最重要预测因素，但合同规模越大，价格对违约的影响越小，揭示了违约的搜索成本。
Abstract During the past two decades, food assistance policy has shifted toward local or regional food purchases and away from purchases from donor countries. Although most local and regional procurement occurs through hard tendering processes open to large‐scale firms and farms, there is growing interest in identifying how and whether to procure from smallholder farmer organizations (FOs). To date, little is known about the drivers of successful contracting with FOs. We utilize data from the United Nations World Food Programme Purchase for Progress pilot in three East African countries to predict defaults on contracts. We examine four possible explanations: country contexts, FO characteristics, prior experience with contracts, and contract modalities and their relationship to local spot market prices. The single most important predictor of default is the increase in market prices between contract approval and delivery. Yet, although increases in market prices are linked to increases in default, this relationship is decreasing in contract size, indicating search costs associated with breaking contracts. Our findings yield both generalizable and context‐specific insights about whether—and when—procuring from smallholder farmers can be successfully integrated into the food assistance toolkit.