Agricultural Industrialization and Income Distribution in Developing Countries: a Focus on the Poultry Sector

The emergence of agricultural industrialization has posed major challenges for smallholder farmers in developing countries, especially sub-Saharan Africa. Using the poultry sector as a case study, we examine the strength and challenges of existing models of integration in terms of efficiency, productivity and social wellbeing. Models of cooperative, monopoly and oligopoly market structures were utilized under a variety of assumptions. We used a multimarket model to disaggregate the producers' and consumers' surplus resulting from the current production system and to study its ramification to income distribution across different groups in the economy. We find that, on the basis of our research, producers' cooperative and proposed hybrid arrangements may result in a relatively less skewed model of income distribution among the economic agents. The two alternative arrangements are plausible future policy options especially where smallholdings by farmers predominate.