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Market-driven production with transaction costs outlook: Gum arabic collection systems in Senegal

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  • Mujawamariya, G.
  • Burger, K.
  • D’Haese, M.

Abstract

Low returns from marketing of non-timber forest products such as gum arabic restrict the collection of these products. A hypothesis is tested that access to good markets motivates collectors to harvest and market gum arabic. Analyses of the choice of participation in group marketing, sale price, quantity of gum collected and the final choice of market outlet are done. Decision outcomes include fixed transaction costs at the collection stage and proportional costs at the marketing stage. Original data from 348 gum collectors in the Sylvopastoral zone and Eastern region of Senegal were used. Results confirm the stated hypothesis; indeed the marketing context and outcome play a big role in collection systems of gum arabic in Senegal. The costs incurred in finding the good market can be regarded as an investment, whereby the collector may continue to transact with the same trading partner (and hence in the same market). The need for infrastructural development, strengthening groups and market expansion are emphasised as key policy interventions.

Suggested Citation

  • Mujawamariya, G. & Burger, K. & D’Haese, M., 2015. "Market-driven production with transaction costs outlook: Gum arabic collection systems in Senegal," Journal of Forest Economics, Elsevier, vol. 21(3), pages 111-130.
  • Handle: RePEc:eee:foreco:v:21:y:2015:i:3:p:111-130
    DOI: 10.1016/j.jfe.2015.05.001
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    More about this item

    Keywords

    Transaction costs; Market-led production; Alternative-specific probit model; Semi-arid lands; Gum arabic;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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