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The HCDA Code of Conduct in Kenya: Impact on transaction costs and risks
Author Yuca Waarts & Gerdien Meijerink
Year 2010
Organization Development Cooperation Ministry of Foreign Affairs
A well-known example of a Code of Conduct can be found in Kenya, where the Horticultural Crops Development Authority (HCDA) has established a Code of Conduct (CoC) for the horticultural sector that is specifically focused on using written contracts as a preferred institutional arrangement. The CoC includes specific obligations related to contract farming and serves to reduce transaction risks by explicitly stating the behaviour and actions (i.e. conduct) to be expected from the parties involved in the horticulture sector, as well as the terms that should be included in written contracts.As this CoC has such specific requirements for establishing written contracts, and contract farming in combination with a Code of Conduct can enable the exporter and its suppliers to minimize a number of risks, this could serve as a model for Ethiopia, where the Oilseeds sector is contemplating a CoC. This report investigates this question by analysing whether the HCDA Code of Conduct has indeed decreased transaction costs and risks for both exporters and farmers in Kenya.
Publisher Development Cooperation Ministry of Foreign Affairs
Keywords Contract farming, Code of conduct, Kenya
Country Kenya