ERC advanced grant for research on creating markets for quality for farmers in low-income countries

Professor Jakob Svensson at the Institute for International Economic Studies (IIES) has been awarded an ERC advanced grant of SEK 23 Million for his project “It’s (also) What You Produce: Experimental Evidence on Creating Markets for Quality in Low-income Countries”. The project aims at investigating why income and productivity in African agriculture remain low by zeroing in on the lack of markets for quality where farmers can sell their crops for a higher price.

Jakob Svensson

Poverty is intimately linked to low incomes and for the vast majority of the world's poor, agriculture remains the main source of income. In Africa, south of the Sahara, for example, almost half of the rural population lives in extreme poverty. An accepted explanation for widespread poverty is that agricultural productivity is low.

This project is inspired by results from previous studies carried out by Jakob Svensson and colleagues showing that small farmers not only produce little per unit of land (ie low productivity) but also low quality and low value added agricultural products. 

“Our results suggest that the main reason why small farmers produce low quality is that they lack access to markets where products of high quality or higher value added can be sold at a higher price, compared to products of lower quality, and this in turn is linked to a fundamental information problem - quality is often a difficult to observe characteristic”, says Jakob Svensson.

In this project, they will use experimental methods (field experiments) to study how markets for quality/higher added value can be brought to life through technical, contractual and institutional solutions.

“I believe that the project will help open up and establish a demand-focused research literature on agricultural development in low-income countries and help us answer the question of whether agriculture, especially in Africa, can play a central role in creating a way out of poverty and if so how”, says Jakob Svensson.

Read more about ERC Advanced Grants to Stockholm University

More about the grant on the ERC web

Read more about Jakob and his research