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INCREASING RETURNS AND MARKET EFFICIENCY IN AGRICULTURAL TRADE AgEcon
Fafchamps, Marcel; Gabre-Madhin, Eleni Z.; Minten, Bart.
Using detailed trader surveys in Benin, Madagascar, and Malawi, this paper investigates the presence of increasing returns in agricultural trade. After analyzing margins, costs, and value added, we find little evidence of returns to scale. Motorized transport is found more cost effective for large loads on longer distances. But transporters pool quantities from multiple traders. Margin rates show little relationship with transaction size. Personal travel costs are a source of increasing returns, but the effect is small. Consequently, total marketing costs are nearly proportional to transaction size. Working and network capital are key determinants of value added. Constant returns to scale in all accumulable factors--working capital, labor, and network...
Tipo: Working or Discussion Paper Palavras-chave: International Relations/Trade.
Ano: 2003 URL: http://purl.umn.edu/16136
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The Food Retail Revolution in Poor Countries: Is It Coming or Is It Over?: Evidence From Madagascar AgEcon
Minten, Bart.
Global retail chains are becoming increasingly dominant in the global food trade and their rise leads to dramatic impacts on agricultural supply chains and on small producers. However, the prospects and impacts of a food retail revolution in poor countries are not yet well understood. Here, we examine this question in Madagascar, a poor but stable country where global retailers have been present for over a decade. Our survey and analysis finds that while global retail chains sell better quality food, their prices are 40 to 90% higher, ceteris paribus, than those seen in traditional retail markets. In poor settings, characterized by high food price elasticities, a lack of willingness to pay for quality, and small retail margins, supermarkets appear to set...
Tipo: Working or Discussion Paper Palavras-chave: Food retail; Supermarkets; Food quality; Africa; Madagascar; Agribusiness.
Ano: 2007 URL: http://purl.umn.edu/42394
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The Urban Poor and the Payday: The Pay of the Day Matters, But So Does the Day of that Pay AgEcon
Minten, Bart.
Although it has been shown that the poor are more responsive to food price changes than other people, they still may face higher food prices. Evidence from Zaire shows that there exists a movement within the month in food prices corresponding to changes in food supply and food demand. This movement is caused by increased income and demand at the end ofthe month due to a fixed pay date. This movement is especially harmful for the poor, who buy in small quantities. Using a Benthamite social welfare junction, it is shown that rescheduling the payday for different sectors or splitting up payments in smaller amounts will result in higher social welfare.
Tipo: Working Paper Palavras-chave: Labor and Human Capital.
Ano: 1995 URL: http://purl.umn.edu/121305
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Price Transmission and Price Integration in Food Retail Markets: The Case of Kinshasa AgEcon
Minten, Bart; Kyle, Steven C..
Integration of commodity markets in developing countries has received considerable attention because price integration is perceived to be central to the success of food and agricultural policies. Price integration tests are performed in retail markets in Kinshasa (Zaire), i.e. between commodities, among retail markets, and between the wholesale and retail market level. Price transmission is measured by incorporating the co-integration concept into the classical long-run and shon-run market integration test. It is shown that although wholesale prices are input prices for retailers, they lack shon-run integration with retail prices. Differences exist between retail markets which do not reflect services or transponation costs. It is hypothesized that this is...
Tipo: Working Paper Palavras-chave: Demand and Price Analysis; Marketing.
Ano: 1995 URL: http://purl.umn.edu/121302
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Spillovers from Globalization on Land Use: Evidence from Madagascar AgEcon
Minten, Bart; Randrianarison, Lalaina; Swinnen, Johan F.M..
The effect of globalization on the environment and natural resource use in developing countries is hotly debated. We contribute to this debate through the analysis of primary data collected with small contract farmers in Madagascar that produce vegetables for export to Europe. Strong spillover effects of these trade opportunities on land use exist. Using a matched plot sampling design, the productivity of rice - the main domestically consumed staple - is shown to be two thirds higher on those fields that were contracted during the off-season for the production of vegetables. This increase in yields is linked to an increase of soil fertility due to the application of fertilizer and compost which farmers would not use prior to the contracts. While...
Tipo: Conference Paper or Presentation Palavras-chave: Land Economics/Use.
Ano: 2006 URL: http://purl.umn.edu/25699
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The Impact of International Prices and Exchange Rates on Domestic Food Prices in Zaire AgEcon
Minten, Bart; Kyle, Steven C..
In sectoral trade analysis, agriculture is generally assumed to be a tradable sector. However, this is not the case within the time frame envisioned for policy reform programs in many developing countries. In this time frame, there are no agricultural products that can be classified as purely tradable or non-tradable. Evidence from Zaire shows that exchange rate changes have a differential impact on agricultural products depending on the characteristics of the product. The classification between tradable and non-tradable is not clear cut as the price of some non-tradables is also affected by changes in the international market or changes in the exchange rate.
Tipo: Working Paper Palavras-chave: International Relations/Trade; Marketing.
Ano: 1995 URL: http://purl.umn.edu/121303
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PATHWAYS OF RURAL DEVELOPMENT IN MADAGASCAR: AN EMPIRICAL INVESTIGATION OF THE CRITICAL TRIANGLE OF ENVIRONMENTAL SUSTAINABILITY, ECONOMIC GROWTH, AND POVERTY ALLEVIATION AgEcon
Zeller, Manfred; Lapenu, Cecile; Minten, Bart; Ralison, Eliane; Randrianaivo, Desire; Randrianarisoa, Jean Claude.
This paper is based on community-level data from 188 villages in rural Madagascar. The survey that was conducted in 1997 made extensive use of long-term recall questions ascertaining changes during the past 10 years in rice yields, wages, population, soil fertility, and other pertinent variables of rural development. We find that—on average for all villages—the yields of irrigated rice, the major food crop, and real agricultural wages declined, while the communities expanded their upland area by nearly a quarter and experienced deteriorating fertility of their upland soils. These patterns are consistent with the wide-held belief that rural areas in Madagascar have witnessed increased poverty, economic stagnation, and a continued degradation of the natural...
Tipo: Working or Discussion Paper Palavras-chave: Community/Rural/Urban Development.
Ano: 2000 URL: http://purl.umn.edu/16456
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On food quality in domestic markets of developing economies AgEcon
Vandeplas, Anneleen; Minten, Bart; Swinnen, Johan F.M..
Food quality has become an important determinant of success in global food trade and growers for international markets have to continuously adjust to buyers’ requirements. It is however not clear to what extent there is a demand for food quality - and how much buyers are willing to pay for it - in the domestic food markets of developing economies. Based on unique price and trader data from domestic food markets in a poor country in Africa (Madagascar) and an emerging economy in Asia (India), we compare quality and quality’s pricing. We find significantly better quality and higher quality premia (using revealed as well as stated preference methods) in the richer country, probably leading to an impetus for the development of modern market channels in this...
Tipo: Conference Paper or Presentation Palavras-chave: Food quality; Quality premia; Development; Agricultural and Food Policy; Q12; Q13; L15.
Ano: 2009 URL: http://purl.umn.edu/51700
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Productivity in Malagasy Rice Systems: Wealth-Differentiated Constraints and Priorities AgEcon
Minten, Bart; Randrianarisoa, Jean Claude; Barrett, Christopher B..
This study explores the constraints on agricultural productivity and priorities in boosting productivity in rice, the main staple in Madagascar, using a range of different data sets and analytical methods, integrating qualitative assessments by farmers and quantitative evidence from panel data production function analysis and willingness-to-pay estimates for chemical fertilizer. Nationwide, farmers seek primarily labor productivity enhancing interventions, e.g., improved access to agricultural equipment, cattle and irrigation. Shock mitigation measures, land productivity increasing technologies and improved land tenure are reported to be much less important. Poorer farmers have significantly lower rice yields than richer farmers, as well as significantly...
Tipo: Conference Paper or Presentation Palavras-chave: Crop Production/Industries; O1; O3; Q12.
Ano: 2006 URL: http://purl.umn.edu/25611
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The broken broker system? Transacting on horticulture wholesale markets in India (Uttarakhand) AgEcon
Minten, Bart; Vandeplas, Anneleen; Swinnen, Johan F.M..
Relying on data from a unique survey, we study the wholesale market activities of agricultural brokers in India. Three main findings emerge. First, most transactions on these wholesale markets are small cash-and-carry transactions with physical handling, quality and quantity assessment, and financial settlements all combined in a single transaction. Second, marketing regulations are ineffective as most brokers charge rates that significantly exceed the prescribed ones. Third, a majority of farmers self-select in long-term relationships with brokers, most often based on their perceived market performance. These relationships allow some of the farmers to interlink credit and insurance markets to the agricultural output market. We find that this inter-linkage...
Tipo: Conference Paper or Presentation Palavras-chave: India; Agricultural marketing; Brokers; Agricultural and Food Policy; Marketing; Q12; Q13; L15.
Ano: 2009 URL: http://purl.umn.edu/51730
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TRANSACTIONS COSTS AND AGRICULTURAL PRODUCTIVITY: IMPLICATIONS OF ISOLATION FOR RURAL POVERTY IN MADAGASCAR AgEcon
Stifel, David; Minten, Bart; Dorosh, Paul A..
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...
Tipo: Working or Discussion Paper Palavras-chave: Productivity Analysis.
Ano: 2003 URL: http://purl.umn.edu/16221
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Missed opportunities and missing markets: Spatio-temporal arbitrage of rice in Madagascar AgEcon
Moser, Christine M.; Barrett, Christopher B.; Minten, Bart.
This paper uses an exceptionally rich data set to test the extent to which markets in Madagascar are integrated across space, time, and form (in converting from paddy to rice) and to explain some of the factors that limit arbitrage and price equalization within a single country. In particular, we use rice price data across four quarters of 2000-2001 along with data on transportation costs and infrastructure availability for nearly 1400 communes in Madagascar to examine the extent of market integration at three different spatial scales sub-regional, regional, and national and determine whether non-integration is due to high transfer costs or lack of competition. The results indicate that markets are fairly well integrated at the sub-regional level and...
Tipo: Conference Paper or Presentation Palavras-chave: Marketing.
Ano: 2005 URL: http://purl.umn.edu/19338
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Quality Control in Non-Staple Food Markets: Evidence From India AgEcon
Fafchamps, Marcel; Hill, Ruth Vargas; Minten, Bart.
Using original data collected about growers, traders, processors, markets, and village communities, we compare the situation in four states – Tamil Nadu, Uttar Pradesh, Maharashtra, and Orissa. We examine the way that information about crop attributes is conveyed (or not) along the value chain. We also document the infrastructure available at the level of the market. We find that little information circulates about unobservable crop characteristics. Growers receive a price premium when they dry, grade, and pack their produce, but we find no evidence that information about crop health and safety or agricultural practices circulates through the value chain or that growers are encouraged to follow specific agricultural practices for quality purposes. Market...
Tipo: Working or Discussion Paper Palavras-chave: Food marketing; Food safety; Food quality; Value chain; India; Marketing.
Ano: 2007 URL: http://purl.umn.edu/42396
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THEFT AND RURAL POVERTY: RESULTS OF A NATURAL EXPERIMENT AgEcon
Fafchamps, Marcel; Minten, Bart.
This paper investigates the relationship between theft and poverty in rural areas. Following a disputed presidential election, fuel supply to the highlands of Madagascar was severely curtailed in early 2002, resulting in a massive -- if temporary -- increase in poverty. This situation constituted a natural experiment of the effect of poverty on theft. Using original survey data collected in June 2002 at the height of the crisis, we find that crop theft increases with poverty and that an increase in law enforcement personnel reduces cattle theft, a form of organized crime. Results suggest that theft is used by some of the rural poor as a risk coping strategy. Increased transport costs led to a rise in cattle and crop theft, suggesting that isolation raises...
Tipo: Conference Paper or Presentation Palavras-chave: Food Security and Poverty.
Ano: 2003 URL: http://purl.umn.edu/25902
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The Effect of Distance and Road Quality on Food Prices, Marketing Margins, and Traders' Wages: Evidence from Zaire AgEcon
Minten, Bart; Kyle, Steven C..
Major investments in infrastructure rehabilitation have been undertaken by govemments, development banks and donors in developing countries in recent decades. In Sub-Saharan Africa roaddeterioration isperceivedtobeoneofthemaincausesforthelimitedsupplyresponseafter price liberalization in agricultural markets. Studies of the quantitative effects on marketing margins are rare. This analysis shows that the wholesale -producer food price margin is strongly influenced by the quality of the road infrastructure. Evidence from Zaire shows that food prices decrease faster than transportation costs increase and that traders' wages are higher on bad roads. A trader's model incorporating uncertainty in input costs is used to explain this phenomenon.
Tipo: Working Paper Palavras-chave: Food Security and Poverty; Labor and Human Capital; Marketing.
Ano: 1995 URL: http://purl.umn.edu/121304
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PROPERTY RIGHTS IN A FLEA MARKET ECONOMY AgEcon
Fafchamps, Marcel; Minten, Bart.
This paper studies liberalized grain markets in Madagascar and examines how property rights are protected and contracts are enforced among agricultural traders. We find that the incidence of theft and breach of contract is low and that the losses resulting from such instances are small. This, however, does not result from reliance on legal institutions -- actual recourse to police and courts is fairly rare, except in cases of theft -- but from traders’ reluctance to expose themselves to opportunism. As a result, Malagasy grain trade resembles a flea market, with little or no forward contracting and high transactions costs. The dominant contract enforcement mechanism is trust-based relationships. Trust is established primarily through repeated interaction...
Tipo: Working or Discussion Paper Palavras-chave: Marketing; Resource /Energy Economics and Policy.
Ano: 1999 URL: http://purl.umn.edu/102523
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ECONOMIC COSTS OF THE U.S. WHEAT EXPORT ENHANCEMENT PROGRAM: MANNA FROM HEAVEN OR FROM TAXPAYERS? AgEcon
Peterson, Jeffrey M.; Minten, Bart; de Gorter, Harry.
Traditional models of export bonus programs focus only on the effects of disposing public stocks on the world market. We show that the economic effects of export bonus programs are significantly different when one includes the costs of acquiring these stocks. Including stock acquisition costs has the domestic price always rising, rather than an ambiguous effect of the traditional model of an export bonus program. We also show that including stock acquisition costs results in an export bonus scheme to be equivalent to cash export subsidies. When an export bonus program is combined with an existing target price scheme, government cost may either rise or fall in either model, but for different reasons. In an empirical simulation of the U.S. Export...
Tipo: Working or Discussion Paper Palavras-chave: Agricultural trade; Export Enhancement Program; Export subsidies; In-kind; International Relations/Trade; Q17.
Ano: 1999 URL: http://purl.umn.edu/14578
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RETURNS TO SOCIAL CAPITAL AMONG TRADERS AgEcon
Fafchamps, Marcel; Minten, Bart.
Using data on agricultural traders in Madagascar, this paper shows that social capital has a large effect on efficiency. Better connected traders are shown to have significantly larger sales and gross margins than less connected traders after controlling for physical and human inputs. The analysis indicates that three dimensions of social network capital should be distinguished: relationships with other traders, which help firms economize on transactions costs; relationships with individuals who can help in times of financial difficulties, which insure traders against liquidity risk; and family relationships, which reduce efficiency, possibly because of measurement error. Social network capital enables traders to deal with each other in a more trustworthy...
Tipo: Working or Discussion Paper Palavras-chave: Marketing.
Ano: 1998 URL: http://purl.umn.edu/91851
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Listen To The Radio! Media and Corruption: Evidence from Madagascar AgEcon
Francken, Nathalie; Minten, Bart; Swinnen, Johan F.M..
This paper investigates the role of the media in reducing corruption. We analyze data on personal capture of public education expenditures by local officials in Madagascar. We find that corruption can be successfully constrained through a combination of media programs and monitoring. More transparent funding mechanisms and access to mass media reduce capture. However, the impact of the media is conditional on the characteristics of the population. With high illiteracy in poor regions, the effectiveness of newspaper and poster campaigns is limited, and radio programs are more important to reduce capture.
Tipo: Working or Discussion Paper Palavras-chave: Labor and Human Capital.
Ano: 2005 URL: http://purl.umn.edu/31872
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Asymmetry in Wholesale-Retail Food Price Transmission in an African Metropolitan Area: The Case of Kinshasa (Zaire) AgEcon
Minten, Bart; Kyle, Steven C..
This study presents a new explanation of asymmetric price behavior infood markets based on the presence of transactions costs,and provides evidence from a developing country. Price liberalization can in many cases be insufficient for efficien toperation of African food markets. This is mainly due to the existence of significant transactions costs, caused by deficient infrastructure and information systems. A model based on search costs and kinked demand curves is used to explain asymmetric price behavior in retail markets in Kinshasa (Zaire).
Tipo: Working Paper Palavras-chave: Demand and Price Analysis; Marketing.
Ano: 1995 URL: http://purl.umn.edu/121306
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