Farmers’ Choices Among Alternative Dairy Marketing Channels in Armenia: Can Appropriately Designed ODA Substitute for FDI?
2017
Gow, Hamish | Shanoyan, Aleksan | Cocks, Jack
The Armenian dairy sector has until recently remained in a sub optimalequilibrium characterized by low quality milk, delayed payments, deepfinancial distress and a general lack of investment. The decision of theUSDA MAP to expand their agribusiness programs into the dairy sector in1999 however initiated a rapid revitalization and expansion of the sector.The USDA MAP used various organizational models at both the processorand farmer level to facilitate this revitalization. Given the lack of FDI andsuccessful ODA initiated restructuring, the USDA MAP project provides aninstrumental case study for analyzing where an ODA-induced publicsolution rather than a FDI-induced private solution has been used to linkfarmers to markets and solve the related contracting, investment, andenforcement problems. The paper analyzes the impact of third-partyfacilitated marketing channels on economic and social outcomes of small,financially distressed farmers and examines the factors affecting farmers’choices among alternative marketing channels.
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