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Abstract

In the Northern Andes, one of the riskiest agriculture climates in the world, farmers use sharecropping to obtain seed, their most costly input. With survey data from Peru, this paper calculates that the cost of seed, when it is provided though sharecropping, is two times higher than the market price. We test the hypothesis that risk-averse farmers are willing to pay more to receive seed through sharecropping because the contract provides implicit crop insurance.

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