Quality-Differentiated Pricing Among Agricultural Traders

Abstract

The USAID Uganda Feed the Future Value Chain (FTF-VC) project uses a market facilitation approach to strengthen the value chains that serve smallholder farmers in Uganda. One of the goals is to improve profitability for farmers and other value chain actors by enabling improved quality and prices throughout the value chain. In a system where actors value quality and are willing to pay more for better products, farmers have the incentive to engage in practices to improve crop quality. To achieve a market for quality products, actors throughout the supply chain should offer and have access to quality-differentiated pricing (QDP). This study addresses a gap in understanding the factors that affect an actor’s ability to access and incentives to extend QDP.