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Agroindustrialization through institutional innovation

Author

Listed:
  • Holloway, Garth
  • Nicholson, Charles F.
  • Delgado, Christopher L.
  • Staal, Steven
  • Ehui, Simeon K.

Abstract

Some small-holders are able to generate reliable and substantial income flows through small-scale dairy production for the local market; for others, a set of unique transactions costs hinders participation. Cooperative selling institutions are potential catalysts for mitigating these costs, stimulating entry into the market, and precipitating growth in rural communities. Trends in cooperative organization in East-African dairy are evaluated. Empirical work focuses on alternative techniques for effecting participation among a representative sample of peri-urban milk producers in the Ethiopian highlands. The techniques considered are a modern production practice (cross-bred cow use), a traditional production practice (indigenous-cow use), three intellectual-capital-forming variables (experience, education, extension), and the provision of infrastructure (as measured by time to transport milk to market). A Tobit analysis of marketable surplus generates precise estimates of non-participants' ‘distances' to market and their reservation levels of the covariates—measures of the inputs necessary to sustain and enhance the market. Policy implications focus on the availability of cross-bred stock and the level of market infrastructure, both of which have marked effects on participation, the velocity of transactions in the local community and, inevitably, the social returns to agroindustrialization.

Suggested Citation

  • Holloway, Garth & Nicholson, Charles F. & Delgado, Christopher L. & Staal, Steven & Ehui, Simeon K., 1999. "Agroindustrialization through institutional innovation," MTID discussion papers 35, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:mtiddp:35
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    File URL: http://www.ifpri.org/sites/default/files/publications/pubs_divs_mtid_dp_papers_dp35.pdf
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    References listed on IDEAS

    as
    1. Akwabi-Ameyaw, Kofi, 1997. "Producer cooperative resettlement projects in Zimbabwe: Lessons from a failed agricultural development strategy," World Development, Elsevier, vol. 25(3), pages 437-456, March.
    2. Chib, Siddhartha, 1992. "Bayes inference in the Tobit censored regression model," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 79-99.
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    Citations

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    Cited by:

    1. Holloway, Garth & Nicholson, Charles & Delgado, Chris & Staal, Steve & Ehui, Simeon, 2004. "A revised Tobit procedure for mitigating bias in the presence of non-zero censoring with an application to milk-market participation in the Ethiopian highlands," Agricultural Economics, Blackwell, vol. 31(1), pages 97-106, July.
    2. Lapar, M. L. & Holloway, G. & Ehui, S., 2003. "Policy options promoting market participation among smallholder livestock producers: a case study from the Phillipines," Food Policy, Elsevier, vol. 28(3), pages 187-211, June.
    3. Reardon, Thomas & Barrett, Christopher B., 2000. "Agroindustrialization, globalization, and international development: An overview of issues, patterns, and determinants," Agricultural Economics, Blackwell, vol. 23(3), pages 195-205, September.
    4. Narayanan, Sudha & Gulati, Ashok, 2002. "Globalization and the smallholders," MTID discussion papers 50, International Food Policy Research Institute (IFPRI).
    5. Kaitibie, Simeon & Omore, Amos & Rich, Karl & Kristjanson, Patti, 2010. "Kenyan Dairy Policy Change: Influence Pathways and Economic Impacts," World Development, Elsevier, vol. 38(10), pages 1494-1505, October.
    6. Emerole, C. Ogbonna. & Osondu, K. Charles & Anyiro, Chidozie Onyedikachi & Orji, O. Alexan, 2013. "Trade Enhancement Characteristics Of Dessert Banana Fruits And Estimates Of Transaction Costs In Okigwe Metropolis, Imo State Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 0(Number 1), pages 1-10, July.
    7. Jose Blandon & Spencer Henson & Towhidul Islam, 2009. "Marketing preferences of small-scale farmers in the context of new agrifood systems: a stated choice model," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 251-267.
    8. Twine, Edgar & Katjiuongua, Hikuepi, 2015. "Farm-Level and Consumption Responses to Improved Efficiency of Tanzania’s Informal Dairy Value Chain," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 200329, Agricultural and Applied Economics Association.
    9. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.

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