Fair Trade, Unfair Competition: The Effect of Reducing Sales Uncertainty on Farmers’ Production


This project studies the effect of reducing sales uncertainty on farmers’ earnings and competition among purchasers. We partner with the largest purchaser of vanilla in Uganda in 10 districts. The agribusiness promotes organic farming and fair trade and represents the best buyer for vanilla farmers. Yet, the presence of several middle-men and the uncertainty around the international market usually press farmers into selling their products at a lower price. We collected descriptive evidence that (i) middle-men are systematically purchasing vanilla before the legal date set by the Ugandan government and (ii) farmers sell prior receiving the offers fulfilling the legal requirements.