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If smallholder farmers have access to the world market: the case of tobacco marketing in Malawi

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  • Wouter Zant

Abstract

We measure the impact of a reduction in transaction costs on crop area and production of smallholder tobacco growers in Malawi. For identification, we exploit the introduction of an additional tobacco auction floor. Estimations are based on annual data by extension planning area. A 10 per cent reduction in distance to auction floor is shown to increase crop area and production around 4 and 10 per cent, respectively. Supply response weakens beyond a distance to auction floor of 60 km and runs along the intensive margin: existing tobacco growers improve productivity of cultivation. Impacts are robust for non-random placement of auction floors and several other threats. The results point to potentially large welfare benefits for smallholders if marketing infrastructure is improved and if more auction floors are introduced.

Suggested Citation

  • Wouter Zant, 2020. "If smallholder farmers have access to the world market: the case of tobacco marketing in Malawi," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(4), pages 1402-1437.
    • Handle: RePEc:oup:erevae:v:47:y:2020:i:4:p:1402-1437.
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    File URL: http://hdl.handle.net/10.1093/erae/jbz039
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    Cited by:

    1. Wouter Zant, 2023. "How costly is using livestock as a savings device?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(1), pages 77-110, February.
    2. Aleksandra Tošović-Stevanović & Vladimir Ristanović & Dragan Ćalović & Goran Lalić & Milena Žuža & Gorica Cvijanović, 2020. "Small Farm Business Analysis Using the AHP Model for Efficient Assessment of Distribution Channels," Sustainability, MDPI, vol. 12(24), pages 1-15, December.

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