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African Smallholders and Their Market Environment

In: African Farmers, Value Chains and Agricultural Development

Author

Listed:
  • Alan de Brauw

    (International Food Policy Research Institute)

  • Erwin Bulte

    (Wageningen University and Research)

Abstract

Smallholder farmers in Africa are poor and appear unproductive relative to larger farmers. But once one takes their environment into account, we argue they make rational production decisions given their multiple objectives under the multiple constraints they face. These constraints are shaped by transaction costs, which determine what smallholders can buy and sell. Transaction costs include not just transporting goods to market, but also costs of aggregation, dealing with risk, obtaining liquidity, and costs related to trust, market power, and even storage. The remainder of the book, then, provides historical and institutional reasons why African smallholders face high transaction costs. After explaining why some solutions will likely fail, the book concludes with what we consider promising areas for interventions to catalyze Structural Transformation 2.0 in Africa.

Suggested Citation

  • Alan de Brauw & Erwin Bulte, 2021. "African Smallholders and Their Market Environment," Palgrave Studies in Agricultural Economics and Food Policy, in: African Farmers, Value Chains and Agricultural Development, chapter 0, pages 1-19, Palgrave Macmillan.
    • Handle: RePEc:pal:psachp:978-3-030-88693-6_1
    DOI: 10.1007/978-3-030-88693-6_1
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