This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13395.
Length: Date of creation: Sep 2007 Date of revision: Handle: RePEc:nbr:nberwo:13395
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Find related papers by JEL classification: F10 - International Economics - - Trade - - - General F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
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