I made this presentation in November 2018 in Dhaka to an A4NH Food Systems for Healthier Diets workshop. It first broadly describes the role of trust in shaping food systems agents' interactions, and then provides an example from the USAID AVC project.

1. The Role of Trust in Food Systems
Experience from the USAID AVC project impact
evaluation
Alan de Brauw
Markets, Trade and Institutions Division
International Food Policy Research Institute
Dhaka | 18 November 2018

2. Trust in Food Systems Outcomes
 We are interested in ways to improve dietary outcomes from a food
systems perspective
 Trust can affect either consumer or producer outcomes
oLeads to potentially limited choices that may be negative for nutrition
on consumer side
oKnown option versus unknown
oOn producer side, may limit what is or can be grown
oMain focus of our research is on the producer side

3. Example: Consumer Side
Do you eat here?
Or here?

4. Potential Trust Problems on Producer Side
If lack trust in input dealers for healthy products, then..
 May not purchase inputs at all (bean seeds versus recycling)
 May purchase fewer inputs than would otherwise
oMay be concerned that inputs are counterfeit (Ashour et al., 2016)
If lack trust in purchasers, institutions needed to improve it, or farmers will…
 Avoid production altogether
oAshraf, Gine, and Karlan (2009) story….
 Reduce production, increase “side selling”, or reduce quality
oBernard et al. (2017) on variability
oSaenger et al. (2014) on third party monitoring

5. Our paper
 We’ve run trust experiments related to input markets in two value chains
serviced by the Bangladesh AVC intervention
oJute and mung bean value chains
 Reporting to you today on experiments in mid-line
 Will explain innovation for the endline

6.  Project personnel both
identified problem in value
chains, and
 Took a market systems
approach to improve workings
of value chains
Why Trust in the AVC?

7. Market Systems Approach
 Idea is to better link all actors within the value chain by seeing them as a
“market system”
oIn other words, improving trust of other actors is a primary goal
oAs is brand recognition (as a quality signal)
 Often in value chains in LDCs, actors only see/think about next link in
chain
oE.g. input manufacturers see wholesalers as customers, not farmers
 By teaching them to think about input retailers and farmers as customers
too, can lead to improved outcomes
 In practice, project (AVC) works with lead firm to implement the approach

8. Our Experiment: Basic Trust Game with a Twist
 Based on Berg et al. (1995)
 First provide money to one actor (farmer)
o150 Taka, in 50 Taka bills
 Farmer can decide how much to send to second actor (input dealer)
oAnything the farmer sends to the dealer sends back will be tripled
 Input dealer then decides how much to send back to farmer
oBetween 0 and 450 taka
 Under classic economic assumptions, farmer should send nothing

9. “Pairing” Farmers and Input Dealers
 We took pictures of all participating dealers before data collection and
farmers during data collection
 Farmer played game six times with local input dealers
 One actual payment was randomly selected from the six
 Similarly, each dealer was matched with four farmers
 As a result, farmer and input dealer did not know with whom they actually
played

10. Example: Farmer Perspective

11. Example: This year’s “twist”

12. Results: Initial Trust Experiment
0 5 10 15 20 25 30 35 40
150 Taka
100 Taka
50 Taka
0 Taka
Percent of Farmers
Farmer Sent…

13. Results: Initial Trust Experiment
0 50 100 150 200 250 300
150 Taka
100 Taka
50 Taka
0 Taka
Average Taka Received by Farmers
Farmer Received…

14. Primary Result: Trust mediates productivity (high trust
group)
Harvest Quantity (log, kg) Harvest Yield (log, kg/ha) Price (log, taka)
Training
Only
-0.06 -0.02 0.04 0.04 -0.01 0.00
(0.13) (0.09) (0.07) (0.07) (0.02) (0.02)
Market
Systems
promotions
0.24 0.14 0.15** 0.15** 0.01 0.01
(0.16) (0.10) (0.07) (0.07) (0.02) (0.02)
Interaction 0.00 -0.01 0.07 0.06 -0.03* -0.02
(0.12) (0.09) (0.06) (0.06) (0.01) (0.01)

15. Primary Result: Trust mediates productivity (low trust group)
Harvest Quantity (log, kg) Harvest Yield (log, kg/ha) Price (log, taka)
Training
Only 0.00 0.05 0.02 0.02 0.01 0.01
(0.14) (0.06) (0.04) (0.04) (0.02) (0.02)
Market
Systems
promotions
0.22 0.05 -0.03 -0.06 0.03 0.02
(0.15) (0.08) (0.05) (0.04) (0.02) (0.02)
Interaction
0.04 -0.03 -0.02 -0.04 0.01 0.01
(0.13) (0.07) (0.04) (0.03) (0.02) (0.01)

16. Discussion
 Is it important to build trust in value chains to be able to raise productivity?
 Idea here was that promotions were being run for specific inputs—
oFarmers with more trust in input providers end up with higher yields
oThose with less trust end up with same yields as before
 Interventions to build trust may therefore matter for outcomes
 From a healthy diet perspective…
oCould be particularly important for output markets
oTrust necessary to get perishable, healthy foods to market in a timely
manner
oClear importance on the consumer side as well