Transaction costs and agricultural productivity
This paper examines the mechanisms that transmit isolation into poverty in Madagascar using household survey data combined with a census of administrative communes. Given the importance of agriculture to the rural poor, where nine out of ten poor persons is engaged in farming, we concentrate on isolation manifesting itself in the form of high transaction costs such as the cost of transporting agricultural commodities to major market centers. We find that (a) the incidence of poverty in rural Madagascar increases with remoteness; (b) yields of major staple crops fall considerably as one gets farther away from major markets; (c) and the use of agricultural inputs declines with isolation. Simulation results using output from rice production function estimates suggest that halving travel time per kilometer on major highways (feeder roads) will increase primary season rice production by 1.3 (1.0) percent.
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- Minot, Nicholas & Daniels, Lisa, 2002.
"Impact of global cotton markets on rural poverty in Benin,"
MSSD discussion papers
48, International Food Policy Research Institute (IFPRI).
- Nicholas Minot & Lisa Daniels, 2005. "Impact of global cotton markets on rural poverty in Benin," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 453-466, November.
- Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MTID discussion papers 48, International Food Policy Research Institute (IFPRI).
- Marcel Fafchamps & Bart Minten, 1999.
"Relationships and traders in Madagascar,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 35(6), pages 1-35.
- Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002.
"Fish as food,"
MSSD discussion papers
52, International Food Policy Research Institute (IFPRI).
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