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Evaluation of India Grain Legume Cluster Development: Experiment on Procurement Prices
Last registered on July 02, 2019

Pre-Trial

Trial Information
General Information
Title
Evaluation of India Grain Legume Cluster Development: Experiment on Procurement Prices
RCT ID
AEARCTR-0004393
Initial registration date
July 01, 2019
Last updated
July 02, 2019 4:58 PM EDT
Location(s)

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Primary Investigator
Affiliation
UC Davis
Other Primary Investigator(s)
PI Affiliation
University of California, Davis
PI Affiliation
University of California, Davis
PI Affiliation
University of California, Davis
Additional Trial Information
Status
On going
Start date
2017-04-24
End date
2021-06-30
Secondary IDs
Abstract
This randomized controlled trial is part of a three-year program that aims to increase take-up and productivity of pulse cultivation in five districts of Northern Bihar, India, through four local implementing partners. This project has established a Farmer Producer Company (FPC) in each of the five districts to connect local farmers to input and output markets. The FPCs will market crops for the first time in the 2019 Kharif planting season, when they will focus their marketing efforts on black gram. This study evaluates the effect of two different types of price supports, designed to mimic possible statewide pricing policies, on farmers' willingness to produce and market black gram.
External Link(s)
Registration Citation
Citation
Bourdier, Tomoé et al. 2019. "Evaluation of India Grain Legume Cluster Development: Experiment on Procurement Prices." AEA RCT Registry. July 02. https://doi.org/10.1257/rct.4393-1.0.
Former Citation
Bourdier, Tomoé et al. 2019. "Evaluation of India Grain Legume Cluster Development: Experiment on Procurement Prices." AEA RCT Registry. July 02. http://www.socialscienceregistry.org/trials/4393/history/49171.
Experimental Details
Interventions
Intervention(s)
We randomly assign farmers to a control arm, which will receive the standard market payment for black gram at the time of harvest; the subsidy arm, which will receive a fixed subsidy over the market price at the time of harvest, or the Minimum Support Price (MSP) arm, which is designed to resemble a price floor. Treatment assignment was announced before planting so that farmers can adjust their crop choice accordingly.

In the MSP arm, farmers are guaranteed a minimum price of Rs. 56 per kilogram of production, set to match the national rate. By eliminating the lower tail of possible price realizations, the MSP treatment both raises the expected returns to pulse production as well as lowers the variance, insuring against the most negative outcomes. We set the subsidy rate at Rs. 6 per kg, which is designed to match the expected value of the MSP over the past ten years without affecting anything else about the distribution of possible price realizations.

As secondary analysis, we also randomly vary whether farmers receive payment in the standard time frame, typically ten days after delivering their seeds, or receive expedited payment the next day. Since the harvest comes after a period of generally low earnings, we will investigate whether the timing of payment has an effect on the production and sale of pulses.

To collect data on input demand, we invite 6-10 farmers in both treatment and control villages to an auction where farmers are given a list of five different prices in Rs. 20 increments from Rs. 60 to Rs. 140. For each price, farmers name their quantity demanded of seed. At the end of the auction, one of those prices is randomly drawn and farmers are given a coupon to purchase their desired amount from the Farmer Producer Company (FPC) at the selected price. We will also analyze data on the actual purchases of pulse seeds from each FPC.
Intervention Start Date
2019-05-29
Intervention End Date
2019-12-15
Primary Outcomes
Primary Outcomes (end points)
Composite demand for each type of seed offered in seed auctions; composite demand for all pulse seeds on offer in each seed auction; out-of-auction seed purchases from each FPC; area of pulse cultivated; pulse yields; pulse output sales; and pulses saved for home consumption.
Primary Outcomes (explanation)
We will convert farmer responses in the seed auctions into a series of implied reservation prices for different quantities of distinct varieties of black gram and pigeon pea seeds. We will construct a simple weighted average of the reservation prices for (a) each farmer's composite demand for each type of seed and (b) each farmer's composite demand for all of the pulse seeds on offer at the auction in their village.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We randomly assign farmers in 152 villages across 5 districts of Bihar to a treatment arm based on the village in which they live. Farmers can either be in the control arm, which will receive the standard market payment at the time of harvest; the subsidy arm, which will receive a fixed subsidy over the market price at the time of harvest, or the Minimum Support Price (MSP) arm, which is designed to resemble a price floor. Within each FPC, we implement stratified randomization by board member. As a result, each board member that oversees at least three villages has one village in each research arm. Randomized assignment to the payment offer will allow us to evaluate the effect of each different type of price support on farmers' willingness to produce and market black gram. The difference between the two treatment arms reveals the relative importance of expected return versus risk or variance.

Within each treatment arm, we randomly select villages in which farmers receive payment in the standard time frame, typically ten days after delivering their crop, or receive expedited payment the following day. Since the harvest comes after a period of generally low earnings, we will investigate whether the timing of payment has an effect on the production and sale of pulses.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Village
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
152 villages
Sample size: planned number of observations
13,516 farmer group members
Sample size (or number of clusters) by treatment arms
49 villages control (23 standard, 26 expedited), 53 villages subsidy (25 standard, 28 expedited), 50 villages MSP (24 standard, 26 expedited)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
UC Davis IRB
IRB Approval Date
2017-11-02
IRB Approval Number
1142147
Analysis Plan

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