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Learning Principal-Agent Contracts for Equitable Smallholder Carbon Farming under Moral Hazard and Adverse Selection

arXiv · AI, language, vision and robotics · article · Sep 17, 2026 · UTC

Agricultural soils are a major untapped carbon sink. Carbon farming is emerging as a promising practice for tapping this potential. Smallholder farmers, who dominate agriculture across South Asia and sub-Saharan Africa, are key to scaling climate mitigation via carbon farming. It is ironic that real-world carbon programs largely fail to reach them. We study this important gap through the lens of contract design. An aggregator offers a single pooled contract to a heterogeneous population of smallholder farmers who have private adoption costs (adverse selection) and exert unobserved effort (mora

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