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Transaction costs and agricultural productivity

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Author Info

  • Dorosh, Paul A.
  • Stifel, David
  • Minten, Bart

Abstract

This paper examines the mechanisms that transmit isolation into poverty in Madagascar using household survey data combined with a census of administrative communes. Given the importance of agriculture to the rural poor, where nine out of ten poor persons is engaged in farming, we concentrate on isolation manifesting itself in the form of high transaction costs such as the cost of transporting agricultural commodities to major market centers. We find that (a) the incidence of poverty in rural Madagascar increases with remoteness; (b) yields of major staple crops fall considerably as one gets farther away from major markets; (c) and the use of agricultural inputs declines with isolation. Simulation results using output from rice production function estimates suggest that halving travel time per kilometer on major highways (feeder roads) will increase primary season rice production by 1.3 (1.0) percent.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series MSSD discussion papers with number 56.

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Date of creation: 2003
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Handle: RePEc:fpr:mssddp:56

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Keywords: Rural poor ; rural areas ; Rice production ; Poverty ; Household surveys Madagascar ;

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References

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  1. Nicholas Minot & Lisa Daniels, 2005. "Impact of global cotton markets on rural poverty in Benin," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 453-466, November.
  2. Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MSSD discussion papers 52, International Food Policy Research Institute (IFPRI).
    • Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MTID discussion papers 52, International Food Policy Research Institute (IFPRI).
  3. Marcel Fafchamps & Bart Minten, 1999. "Relationships and traders in Madagascar," Journal of Development Studies, Taylor & Francis Journals, vol. 35(6), pages 1-35.
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Cited by:
  1. Joshi, P.K. & Gulati, Ashok & Birthal, Pratap S. & Tewari, Laxmi, 2003. "Agriculture diversification in South Asia," MSSD discussion papers 57, International Food Policy Research Institute (IFPRI).
  2. Rios, Ana R. & Masters, William A. & Shively, Gerald E., 2008. "Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6145, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Rashid, Shahidur, 2004. "Spatial integration of maize markets in post-liberalized Uganda," MTID discussion papers 71, International Food Policy Research Institute (IFPRI).
  4. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2005. "How Costly is it for Poor Farmers to Lift Themselves out of Subsistence?," CEPR Discussion Papers 5392, C.E.P.R. Discussion Papers.
  5. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2006. "How costly is it for poor farmers to lift themselves out of poverty?," Policy Research Working Paper Series 3881, The World Bank.
  6. Zhigang Li & Xiaohua Yu & Yinchu Zeng & Rainer Holst, 2012. "Estimating transport costs and trade barriers in China: Direct edvidence from Chinese agricultural traders," Working Papers 1209, BBVA Bank, Economic Research Department.
  7. Christian K.M. Kingombe, 2012. "The Linkage between Outcome Differences in Cotton Production and Rural Roads Improvements - A Matching Approach," IHEID Working Papers 12-2012, Economics Section, The Graduate Institute of International Studies.

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