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Trade, farmers’ heterogeneity, and agricultural productivity: Evidence from Colombia

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  • Gáfaro, Margarita
  • Pellegrina, Heitor S.

Abstract

This paper studies how farmers’ participation in non-local markets shapes agricultural productivity. Using farm-level data from Colombia, we document two empirical patterns about the spatial organization of agriculture. First, across municipalities, better access to urban centers increases farmers’ productivity and participation in non-local markets, but reduces farm size. Second, within municipalities and crop-choices, larger farms participate more in non-local markets and have higher productivity. To rationalize these patterns, we introduce farmers with heterogeneous productivity and market participation choices into a spatial economy model. We take the model to data and find that removing the geographic barriers to farmers’ participation in non-local markets can increase Colombia's agricultural value added by up to 14%. Changes in the productivity composition of farmers contribute substantially to this impact, particularly in remote regions with low participation of farmers in non-local markets.

Suggested Citation

  • Gáfaro, Margarita & Pellegrina, Heitor S., 2022. "Trade, farmers’ heterogeneity, and agricultural productivity: Evidence from Colombia," Journal of International Economics, Elsevier, vol. 137(C).
    • Handle: RePEc:eee:inecon:v:137:y:2022:i:c:s0022199622000307
    DOI: 10.1016/j.jinteco.2022.103598
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    2. Arguello, R & Garcia-Suaza, A. F. & Bolivar, M. F. & Alzate, M., 2023. "Market access and agricultural land use: Does distance matter? Insights from Colombia," Documentos de Trabajo 20748, Universidad del Rosario.
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    More about this item

    Keywords

    Trade; Farmers’ heterogeneity; Agricultural productivity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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