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Farm-to-market transaction costs and specialisation in small-scale agriculture: Explorations with a non-separable household model

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  • Steven Were Omamo
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    Abstract

    Using an integrated household model with endogenous transaction costs, this article illustrates how, even in the absence of risk, the tension between gains from specialisation and corresponding increases in transaction costs may lead to enterprise diversification on small farms. A numerical example illustrates that this tension may contribute to the prevalence of inter-cropped cash-crops on small farms, in apparent disregard for foregone yield and income from greater specialisation involving pure-stands. By implication, measures that augment households' abilities to override trading costs may be critical complements to efforts seeking to raise productivity and incomes in small-scale agriculture via increased specialisation.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00220389808422568
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

    Volume (Year): 35 (1998)
    Issue (Month): 2 ()
    Pages: 152-163

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    Handle: RePEc:taf:jdevst:v:35:y:1998:i:2:p:152-163

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    Web page: http://www.tandfonline.com/FJDS20

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    Cited by:
    1. Alberto Zezza & Luis Llambi, 2001. "Meso-Economic Filters Along the Policy Chain: Understanding the links between policy reforms and rural poverty in Latin America," Working Papers 02-08, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    2. Waithaka, M.M. & Thornton, P.K. & Herrero, M. & Shepherd, K.D., 2006. "Bio-economic evaluation of farmers' perceptions of viable farms in western Kenya," Agricultural Systems, Elsevier, vol. 90(1-3), pages 243-271, October.
    3. Komarek, Adam M. & Ahmadi-Esfahani, Fredoun Z., 2006. "An Economic Analysis of Ugandan Agricultural Constraints," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139796, Australian Agricultural and Resource Economics Society.
    4. Barrett, Christopher B. & Swallow, Brent M., 2006. "Fractal poverty traps," World Development, Elsevier, vol. 34(1), pages 1-15, January.
    5. Qin, Yu & Zhang, Xiaobo, 2012. "The road to specialization in agricultural production:: Evidence from rural China," IFPRI discussion papers 1221, International Food Policy Research Institute (IFPRI).
    6. Barrett, Christopher B. & Brown, Douglas R., 2002. "Agriculture And Rural Development: Lessons For Christian Groups Combating Persistent Poverty," Working Papers 14738, Cornell University, Department of Applied Economics and Management.
    7. Barrett, Christopher B. & Reardon, Thomas, 2000. "Asset, Activity, And Income Diversification Among African Agriculturalists: Some Practical Issues," Working Papers 14734, Cornell University, Department of Applied Economics and Management.
    8. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    9. Argiles, Josep M. & Brown, Nestor Duch, 2010. "A comparison of the economic and environmental performances of conventional and organic farming: evidence from financial statements," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(1), January.
    10. Fleming, Euan & Milne, Mary, 2003. "Bioeconomic modelling of the production and export of cocoa for price policy analysis in Papua New Guinea," Agricultural Systems, Elsevier, vol. 76(2), pages 483-505, May.
    11. Fischer, Elisabeth & Qaim, Matin, 2012. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," World Development, Elsevier, vol. 40(6), pages 1255-1268.

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