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Suppose you are talking with the Deputy Minister of Agriculture in East Timor, who is responsible for programs to help smallholder farmers in coffee, to
Suppose you are talking with the Deputy Minister of Agriculture in East Timor, who is responsible for programs to help smallholder farmers in coffee, to increase their productivity. Coffee is a critical export crop for the country.The Ministry is trying to promote having farmers switch from producing Robusta coffee to Arabica coffee. Robusta tends to be used in lower-value coffee products like instant coffee, while Arabica tends to be used in higher-value retail coffee products in grocery stores and specialty coffee shops in countries like Australia. However, most farmers seem to be unwilling to switch to Arabica, by planting Arabica coffee trees and learning how to best produce Arabica coffee. Explain why this may not necessarily be inconsistent with rational economic behavior, giving at least three reasons, making precise use of concepts from ECOS3002 to illustrate your arguments
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