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Agricultural markets in Benin and Malawi

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  • Fafchamps, Marcel
  • Gabre-Madhin, Eleni Z.

Abstract

Based on original trader surveys, this paper examines how agricultural traders operate in Benin and Malawi. Results indicate that the largest transaction costs are search and transport. The use of modern technology is limited. Search methods rely principally on personal visits by the trader, and quality control requires the presence of the trader at the time of purchase. This increases costs, as the trader has to travel a lot, and makes it difficult for trading enterprises to grow. Since enterprises remain very small, personal transport and search time represent a non-negligible share of marketing costs.

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Bibliographic Info

Article provided by African Association of Agricultural Economists in its journal African Journal of Agricultural and Resource Economics.

Volume (Year): 01 (2006)
Issue (Month): 1 (December)
Pages:

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Handle: RePEc:ags:afjare:57022

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Keywords: Traders; Transaction costs; Transport; Storage; Search; Marketing;

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References

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  1. Paul Collier & Marcel Fafchamps & Francis Teal & Stefan Dercon, 1999. "Contract flexibility and dispute resolution in African manufacturing," Economics Series Working Papers WPS/1999-20, University of Oxford, Department of Economics.
  2. Marcel Fafchamps & Susan Lund, . "Risk Sharing Networks in Rural Philippines," Working Papers 97014, Stanford University, Department of Economics.
  3. Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas & Johnson, Michael, 2000. "The road half traveled," Issue briefs 2, International Food Policy Research Institute (IFPRI).
    • Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas. & Johnson, Michael., 2000. "The road half traveled," Food policy reports 10, International Food Policy Research Institute (IFPRI).
  4. Marcel Fafchamps & Måns Söderbom, 2004. "Wages and Labor Management in African Manufacturing," Development and Comp Systems 0409043, EconWPA.
  5. Barrett, Christopher B., 1997. "Food marketing liberalization and trader entry: Evidence from Madagascar," World Development, Elsevier, vol. 25(5), pages 763-777, May.
  6. Marcel Fafchamps & Ruth Hill & Bart Minten, 2006. "Quality Control in Non-Staple Food Markets: Evidence from India," Economics Series Working Papers GPRG-WPS-057, University of Oxford, Department of Economics.
  7. Velenchik, A.D., 1995. "Government Intervention, Efficiency Wages, and the Employer-Size Wage Effects in Zimbabwe," Papers 95-09, Wellesley College - Department of Economics.
  8. Marcel Fafchamps & Eleni Gabre-Madhin & Bart Minten, 2004. "Increasing Returns and Market Efficiency in Agricultural Trade," Development and Comp Systems 0409020, EconWPA.
  9. Badiane, Ousmane & Shively, Gerald E., 1998. "Spatial integration, transport costs, and the response of local prices to policy changes in Ghana," Journal of Development Economics, Elsevier, vol. 56(2), pages 411-431, August.
  10. Steven Tadelis, 1999. "What's in a Name? Reputation as a Tradeable Asset," American Economic Review, American Economic Association, vol. 89(3), pages 548-563, June.
  11. Marcel Fafchamps & Bart Minten, 1999. "Relationships and traders in Madagascar," Journal of Development Studies, Taylor & Francis Journals, vol. 35(6), pages 1-35.
  12. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  13. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364, December.
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Cited by:
  1. Nkendah, Robert, 2013. "Estimating the informal cross-border trade of agricultural and horticultural commodities between cameroon and its CEMAC neighbours," Food Policy, Elsevier, vol. 41(C), pages 133-144.
  2. LEFÈVRE, Mélanie & THARAKAN, Joe & ,, 2013. "Intermediaries, transport costs and interlinked transactions," CORE Discussion Papers 2013055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Blume, Lawrence E. & Easley, David & Kleinberg, Jon & Tardos, Éva, 2009. "Trading networks with price-setting agents," Games and Economic Behavior, Elsevier, vol. 67(1), pages 36-50, September.

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