ECON Webinar - Technology Training, Buyer-Supplier Linkage, and Quality Upgrading in an Agricultural Supply Chain

We conduct a randomized experiment to examine the impact of technology training on quality upgrading in the dragon fruit supply chain in Vietnam. We randomly varied the subjects of each training group across matched farmer-intermediary clusters—only farmers, only exporting intermediaries, or both—and provided training on Good Agricultural Practices (GAP). We find strong causal evidence that technology training to farmers enhances quality upgrading, with much stronger effects when farmers and exporting intermediaries are trained together. We identify two mechanisms that contribute to these effects: knowledge transfer and connection to downstream buyers. Training increased farmers’ knowledge on GAP, relaxing a supply-side constraint to quality upgrading. Participating in joint training also helped farmers establish connections to downstream exporting intermediaries, as evidenced by the increase in contracts and trade within training clusters. This connection cuts off the middleman (local collector) and reduced/mitigated information asymmetry, which strengthens farmers’ incentives to upgrade quality by alleviating a demand-side constraint.