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The Elimination of Madagascar's Vanilla Marketing Board, 10 Years on

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  • Olivier Cadot
  • Laure Dutoit
  • Jaime de Melo

Abstract

This paper explores how the elimination of Madagascar's Vanilla Marketing Board (VMB) in 1993 affected prices paid to farmers, incentives and indicators of poverty and inequality using household survey data and simulation analysis. Following the reforms, margins between FOB and farmgate prices have narrowed down, and the analysis of changes in poverty and inequality based on household surveys suggests a reduction in poverty and a muted supply response. A counterfactual analysis based on the observed reduction in intermediation margins shows that, however limited, increase in competition among intermediaries has contributed to raise purchase prices and the cash income of vanilla farmers. After taking into account the reduction in Madagascar's monopoly power on the world vanilla market implied by the elimination of the VMB, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty. Copyright 2009 The author 2008. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Olivier Cadot & Laure Dutoit & Jaime de Melo, 2009. "The Elimination of Madagascar's Vanilla Marketing Board, 10 Years on," Journal of African Economies, Centre for the Study of African Economies, vol. 18(3), pages 388-430, June.
    • Handle: RePEc:oup:jafrec:v:18:y:2009:i:3:p:388-430
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    File URL: http://hdl.handle.net/10.1093/jae/ejn025
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    Cited by:

    1. Suzuki, Aya & Jarvis, Lovell S. & Sexton, Richard J., 2011. "Partial Vertical Integration, Risk Shifting, and Product Rejection in the High-Value Export Supply Chain: The Ghana Pineapple Sector," World Development, Elsevier, vol. 39(9), pages 1611-1623, September.
    2. Brambilla, Irene & Porto, Guido, 2016. "Trade, Poverty Eradication, and the Sustainable Development Goals," ADBI Working Papers 629, Asian Development Bank Institute.
    3. Khalid Khan & Chi-Wei Su & Adnan Khurshid & Muhammad Umar, 2022. "Are there bubbles in the vanilla price?," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-16, December.
    4. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.
    5. Depetris Chauvin, Nicolas & Porto, Guido G., 2011. "Market Competition in Export Cash Crops and Farm Income," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126159, International Association of Agricultural Economists.
    6. Tania Begazo & Sara Nyman, 2016. "Competition and Poverty," World Bank Publications - Reports 24251, The World Bank Group.

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