This dissertation broadly examines how climate change, and the rapidly transforming agrifood value chains are impacting firms, workers, and farmers in developing countries. Chapter 1 examines the effect of ignoring adaptation when estimating the short-run impacts of temperature shocks on workers and firms in developing regions. To do this, we first obtain naive estimates of the short-run impacts of extreme temperatures (shocks) on workers' wages and firm output in Sub-Saharan Africa using the standard panel fixed effects approach. We then obtain the pure short-run effects by adjusting the naive estimates by conditioning the effects of the temperature shocks on the historical local temperature information held by firms and workers prior to the occurrence of the temperature shocks. The difference between the naive and the pure short-run estimates provide evidence of adaptation. We find evidence of temperature shock effects on wages and output that similar to other studies from our naive estimates. However, the estimated effects are much higher when we condition on firms' prior knowledge of the local temperature. This finding indicates the importance of accounting for firms and workers' knowledge of local temperature patterns (when estimating the impacts of temperature shocks) and provides evidence of incomplete adaptation (of up to 50% of the original effects). Evidence of incomplete adaptation suggests the presence of barriers to adaptation that need to be addressed to prevent a locking-in of vulnerability to climate change impacts. In a further application to the United States in Chapter 2, we find that accounting for the historical local temperature information is less relevant in the presence of more complete adaptation that may be aided by established institutional capacity for dealing with extreme weather. Taken together, these findings reveal (1) the importance of accounting for adaptation in estimating the impacts of short-term temperature shocks in developing regions with more barriers to adaptation and (2) that policies aimed at adaptation should not ignore local institutional and environmental contexts in which adaptation occurs. Chapter 3 examines the effects of the recent rise of numerous midstream agri-food firms and their authorized agents on smallholder soybean farmers in Zambia. Specifically, I examine the implications of non-contractual sale of soybean output to midstream firms and processors for the welfare of smallholder farmers. Using fixed effects and instrumental variables estimation techniques to address the endogeneity of the smallholder decision to sell to large-scale firms, I find significant positive crop income effects of selling to soybean large-scale firms on all smallholders. However, the observed effects only translate into higher total household incomes and poverty reduction for medium-scale smallholders (operating 5 ha- 20 ha) but not for small-scale smallholders operating less than five hectares. The positive crop income effects are mainly driven by the opportunity to sell more although small-scale smallholders also receive a price premium from selling to large buyers. These results suggest that the recent rise in purchasing activity by firms in the soybean industry in Zambia is benefiting smallholder farmers but not necessarily enough to move the smallest of these farmers out of poverty.
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