Liquid milk: Savings, insurance and side-selling in cooperatives
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Title |
Liquid milk: Savings, insurance and side-selling in cooperatives
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Creator |
Geng, Xin
Janssens, Wendy Kramer, Berber |
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Subject |
liquid milk
milk insurance cooperatives dairy cooperatives markets cash flow |
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Description |
Limited access to reliable financial instruments makes it difficult for rural households to manage daily cash flows. Selling goods through cooperatives can improve savings, but cooperative income is not easily accessible when facing an emergency. Cash-constrained households may therefore side-sell in local markets that pay on the spot, while insurance could reduce the need to side-sell. We test these hypotheses using panel data for farmers from two Kenyan dairy cooperatives. Both cooperatives pay only once a month, with local market vendors paying a lower price but upon delivery. We find that farmers sell less milk to the cooperatives when facing uninsured health emergencies or when cash on hand is low. Health insurance reduces side-selling. These findings highlight that selling, saving and risk-coping decisions are intertwined, with side-selling providing a strategy to manage temporary cash constraints. This suggests that linking agricultural and insurance contracts can enhance cooperatives’ financial sustainability.
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Date |
2023-10-01
2023-09-14T20:15:52Z 2023-09-14T20:15:52Z |
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Type |
Journal Article
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Identifier |
Journal of Development Economics 165(October 2023): 103142
0304-3878 https://hdl.handle.net/10568/131865 https://doi.org/10.1016/j.jdeveco.2023.103142 https://doi.org/10.34894/AXFRPB |
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Language |
en
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Relation |
Discussion Paper https://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/131058; https://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/131229; https://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/131128 Journal article https://ebrary.ifpri.org/cdm/ref/collection/p15738coll5/id/6889
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Rights |
CC-BY-4.0
Open Access |
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Source |
Journal of Development Economics
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