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Transaction costs and agricultural productivity

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Author Info
Dorosh, Paul A.
Stifel, David
Minten, Bart

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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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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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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Fafchamps, Marcel & Minten, Bart, 1998. "Relationships and traders in Madagascar," MTID discussion papers 24, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Goletti, Francesco & Minot, Nicholas, 1997. "Rice markets, agricultural growth, and policy options in Viet Nam," MTID discussion papers 14, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Steven Durlauf & Marcel Fafchamps, 2004. "Social Capital," Development and Comp Systems 0409060, EconWPA. [Downloadable!]
    Other versions:
    • Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier. [Downloadable!] (restricted)
  4. Minot, Nicholas, 1998. "Generating disaggregated poverty maps," MTID discussion papers 25, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Goletti, Francesco & Minot, Nicholas & Berry, Philippe, 1997. "Marketing constraints on rice exports from Viet Nam," MTID discussion papers 15, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Holloway, Garth & Nicholson, Charles F. & Delgado, Christopher L. & Staal, Steven & Ehui, Simeon K., 1999. "Agroindustrialization through institutional innovation," MTID discussion papers 35, International Food Policy Research Institute (IFPRI). [Downloadable!]
  7. 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). [Downloadable!]
    Other versions:
    • 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). [Downloadable!]
  8. Rashid, Shahidur & Sharma, Manohar & Zeller, Manfred, 2002. "Micro-lending for small farmers in Bangladesh," MTID discussion papers 45, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  9. Kherallah, Mylène & Minot, Nicholas & Gruhn, Peter, 1999. "Adjustment of wheat production to market reform in Egypt," MTID discussion papers 32, International Food Policy Research Institute (IFPRI). [Downloadable!]
  10. Minot, Nicholas & Baulch, Bob, 2002. "The spatial distribution of poverty in Vietnam and the potential for targeting," MSSD discussion papers 42, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  11. Shahabuddin, Quazi & Dorosh, Paul A., 2002. "Comparative advantage in Bangladesh crop production," MSSD discussion papers 47, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  12. Minot, Nicholas & Kherallah, Mylène & Berry, Philippe, 2000. "Fertilizer market reform and the determinants of fertilizer use in Benin and Malawi," MTID discussion papers 40, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  13. Fafchamps, Marcel & Minten, Bart, 1999. "Property rights in a flea market economy," MTID discussion papers 27, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  14. Dorosh, Paul A. & Shahabuddin, Quazi & Aziz, M. Abdul & Farid, Naser, 2002. "Bumper crops, producer incentives and persistent poverty," MSSD discussion papers 43, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  15. Delgado, Christopher L. & Courbois, Claude & Rosegrant, Mark W., 1998. "Global food demand and the contribution of livestock as we enter the new millennium," MTID discussion papers 21, International Food Policy Research Institute (IFPRI). [Downloadable!]
  16. Badiane, Ousmane & Nuppenau, Ernst-August, 1997. "Reforming and promoting local agricultural markets," MTID discussion papers 10, International Food Policy Research Institute (IFPRI). [Downloadable!]
  17. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MTID discussion papers 48, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  18. Delgado, Christopher L. & Rosegrant, Mark W. & Steinfeld, Henning & Ehui, Simeon K. & Courbois, Claude, 1999. "The growing place of livestock products in world food in the twenty-first century," MTID discussion papers 28, International Food Policy Research Institute (IFPRI). [Downloadable!]
  19. Badiane, Ousmane, 1998. "Marketing policy reform and competitiveness," MTID discussion papers 22, International Food Policy Research Institute (IFPRI). [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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). [Downloadable!]
  2. 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. [Downloadable!]
  3. Sharma, Vijay Paul & Gulati, Ashok, 2003. "Trade liberalization, market reforms and competitiveness of Indian dairy sector," MTID discussion papers 61, International Food Policy Research Institute (IFPRI). [Downloadable!]
  4. Olivier Cadot & Laure Dutoit & Marcelo Olarreaga, 2005. "How Costly is it for Poor Farmers to Lift Themselves out of Subsistence?," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 05.09, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
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  5. Negassa, Asfaw & Myers, Robert & Gabre-Madhin, Eleni Z., 2004. "Grain marketing policy changes and spatial efficiency of maize and wheat markets in Ethiopia," MTID discussion papers 66, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Rashid, Shahidur, 2004. "Spatial integration of maize markets in post-liberalized Uganda," MTID discussion papers 71, International Food Policy Research Institute (IFPRI). [Downloadable!]
  7. Gopinath, Munisamy & Mullen, Kathleen & Gulati, Ashok, 2004. "Domestic support to agriculture in the European Union and the United States," MTID discussion papers 75, International Food Policy Research Institute (IFPRI). [Downloadable!]
  8. Weerahewa, Jeevika, 2004. "Impacts of trade liberalization and market reforms on the rice sector in Sri Lanka," MTID discussion papers 70, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Gulati, Ashok & Fan, Shenggen & Dalafi, Sara, 2005. "The dragon and the elephant," MTID discussion papers 87, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  10. Rakotoarisoa, Manitra A., 2006. "Policy distortions in the segmented rice market:," MTID discussion papers 94, International Food Policy Research Institute (IFPRI). [Downloadable!]
  11. Delgado, Christopher & Minot, Nicholas & Tiongco, Marites, 2004. "Evidence and implications of non-tradability of food staples in Tanzania 1983-1998," MTID discussion papers 72, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  12. Fafchamps, Marcel & Gabre-Madhin, Eleni Z. & Minten, Bart, 2003. "Increasing returns and market efficiency in agricultural trade," MTID discussion papers 60, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  13. Jha, Shikha & Srinivasan, P.V., 2004. "Achieving food security in a cost effective way," MTID discussion papers 67, International Food Policy Research Institute (IFPRI). [Downloadable!]
  14. Gabre-Madhin, Eleni Z. & Barrett, Christopher B. & Dorosh, Paul A., 2003. "Technological change and price effects in agriculture," MTID discussion papers 62, International Food Policy Research Institute (IFPRI). [Downloadable!]
  15. Mullen, Kathleen & Sun, Dongsheng & Orden, David & Gulati, Ashok, 2004. "Producer Support Estimates (PSEs) for agriculture in developing countries," MTID discussion papers 74, International Food Policy Research Institute (IFPRI). [Downloadable!]
  16. 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). [Downloadable!]
  17. Ramaswami, Bharat & Birthal, Pratap Singh & Joshi, P.K., 2006. "Efficiency and distribution in contract farming: the case of Indian poultry growers," MTID discussion papers 91, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  18. Pyakuryal, Bishwambher & Thapa, Y. B. & Roy, Devesh, 2005. "Trade liberalization and food security in Nepal," MTID discussion papers 88, International Food Policy Research Institute (IFPRI). [Downloadable!]
  19. Rashid, Shahidur & Cummings, Ralph Jr. & Gulati, Ashok, 2005. "Grain marketing parastatals in Asia," MTID discussion papers 80, International Food Policy Research Institute (IFPRI). [Downloadable!]
  20. Peterson, Everett B. & Orden, David, 2004. "Effects of tariffs and sanitary barriers on high- and low-value poultry trade," MTID discussion papers 64, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  21. Chowdhury, Nuimuddin & Farid, Nasir & Roy, Devesh, 2006. "Food policy liberalization in Bangladesh: how the government and the markets delivered," MTID discussion papers 92, International Food Policy Research Institute (IFPRI). [Downloadable!]
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