Agricultural Supply Chains and Farmers Constraints: Welfare Impacts in ECOWAS Countries

We study the interplay between market structure and other domestic factors that affect the production and consumption decisions of agricultural families in Africa. We are interested in modeling the production allocation of factors of production to various cash and food crops and in how this allocation depends on competition along the supply chain and on the constraints faced by different types of farmers. The model describes the behavior of farms, exporters and importers in a simple partial equilibrium setting. In particular, we build three different versions of the model to deal with the three basic scenarios that we face in our empirical work. That is, we build a model to explore the case of cash crop production (mostly for exports). We then adapt this model to deal with the case of a country that is a net exporter of a food crop. Finally, we develop a different version of the model for the case of a country that is a net importer of a food crop. We study changes in market structure and in key parameters of the model that capture various household constraints and institutional access. We analyze the changes in real income of household caused by the hypothetical price changes of cash and food crops predicted by the models’ simulations in Burkina Faso, Ghana, Nigeria and Senegal.