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Trade, Standards, and Poverty: Evidence from Senegal

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Miet Maertens
Johan F.M. Swinnen

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Abstract

An emerging literature on standards, global supply chains, and development argues that enhanced quality and safety standards are major trade barriers for developing country exports and cause the marginalization of small businesses and poor households in developing countries. This paper is the first to quantify income and poverty effects of such high-standards trade and to integrate labor market effects, by using company and household survey data from the vegetable export chain in Senegal. First, horticultural exports from Senegal to the EU have grown sharply over the past decade, despite strongly increasing food standards in the EU. Second, these exports have strong positive effects on poor households?income. We estimate that these exports reduced regional poverty by around 12 percentage points and reduced extreme poverty by half. Third, tightening food standards induced structural changes in the supply chain including a shift from smallholder contract-based farming to large-scale integrated estate production. However, these changes mainly altered the mechanism through which poor households benefit: through labor markets instead of product markets. Moreover, the impact on poverty reduction is stronger as the poorest benefit relatively more from working on large-scale farms than from contract farming. These findings challenge several basic arguments in this research field.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 17706.

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Length: 38 pages
Date of creation: 2006
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Handle: RePEc:lic:licosd:17706

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  2. Bart Minten & Lalaina Randrianarison & Johan F.M. Swinnen, 2006. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," LICOS Discussion Papers 16406, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  3. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February. [Downloadable!] (restricted)
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  4. Dave D. Weatherspoon & Thomas Reardon, 2003. "The Rise of Supermarkets in Africa: Implications for Agrifood Systems and the Rural Poor," Development Policy Review, Overseas Development Institute, vol. 21, pages 333-355, 05. [Downloadable!] (restricted)
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  10. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," IZA Discussion Papers 2149, Institute for the Study of Labor (IZA). [Downloadable!]
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  16. Dries, Liesbeth & Swinnen, Johan F. M., 2004. "Foreign Direct Investment, Vertical Integration, and Local Suppliers: Evidence from the Polish Dairy Sector," World Development, Elsevier, vol. 32(9), pages 1525-1544, September. [Downloadable!] (restricted)
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  20. C. Dolan & J. Humphrey, 2000. "Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry," The Journal of Development Studies, Taylor and Francis Journals, vol. 37(2), pages 147-176, December. [Downloadable!] (restricted)
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  1. Swinnen, Johan F.M. & Vandeplas, Anneleen & Maertens, Miet, 2007. "Governance and Surplus Distribution in Commodity Value Chains in Africa," 106th Seminar, October 25-27, 2007, Montpellier, France 7950, European Association of Agricultural Economists. [Downloadable!]
  2. Fontaine, Damien & Gaspart, Frederic & Henry de Frahan, Bruno, 2008. "Modelling the impact of private quality standards on the fresh fruit and vegetable supply chains in developing countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44378, European Association of Agricultural Economists. [Downloadable!]
  3. Minten, Bart, 2007. "The food retail revolution in poor countries: Is it coming or is it over? Evidence from Madagascar," IFPRI discussion papers 719, International Food Policy Research Institute (IFPRI). [Downloadable!]
  4. Miet Maertens, 2008. "Horticulture Exports, Agro-industrialization and Farm-nonfarm Linkages with the Smallholder Farm Sector: Evidence from Senegal," LICOS Discussion Papers 21408, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  5. Miet Maertens & Liesbeth Colen & Johan F.M. Swinnen, 2008. "Globalization and Poverty in Senegal: A Worst Case Scenario?," LICOS Discussion Papers 21708, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  6. Miet Maertens & Bart Minten & Jo Swinnen, 2009. "Growth in high-value export markets in Sub-Saharan Africa and its development implications," LICOS Discussion Papers 24509, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  7. Sven Anders & Julie Caswell, 2007. "Standards-as-Barriers versus Standards-as-Catalysts: Assessing the Impact of HACCP Implementation on U.S. Seafood Imports," Working Papers 2007-7, University of Massachusetts Amherst, Department of Resource Economics. [Downloadable!]
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  8. Miet Maaertens & Johan F.M. Swinnen, 2009. "Gender and Modern Supply Chains in Developing Countries," LICOS Discussion Papers 23109, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  9. Johan F.M. Swinnen & Scott Rozelle & Tao Xiang & Thijs Vandemoortele, 2008. "A Theory of Standards-Driven Rural Development," LICOS Discussion Papers 19908, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  10. Minten, Bart & Reardon, Thomas & Vandeplas, Anneleen, 2009. "Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains," IFPRI discussion papers 883, International Food Policy Research Institute (IFPRI). [Downloadable!]
  11. Swinnen, Johan F.M. & Vandeplas, Anneleen, 2007. "From Public to Private Governance of Agri-food Supply Chains in Transition Countries: Some Theoretical and Empirical Lessons," 104th Seminar, September 5-8, 2007, Budapest, Hungary 8521, European Association of Agricultural Economists. [Downloadable!]
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