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How costly is it for poor farmers to lift themselves out of poverty?

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  • Cadot, Olivier
  • Dutoit, Laure
  • Olarreaga, Marcelo

Abstract

The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar's farmers. The analysis is based on a simple asset-return model of occupational choice. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large - somewhere between 124 and 153 percent of a subsistence farmer's annual production. Our results make it possible to identify farm characteristics likely to generate large gains, if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.

Suggested Citation

  • Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2006. "How costly is it for poor farmers to lift themselves out of poverty?," Policy Research Working Paper Series 3881, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3881
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    References listed on IDEAS

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    3. Simphiwe Innocentia Hlatshwayo & Mjabuliseni Ngidi & Temitope Ojo & Albert Thembinkosi Modi & Tafadzwanashe Mabhaudhi & Rob Slotow, 2021. "A Typology of the Level of Market Participation among Smallholder Farmers in South Africa: Limpopo and Mpumalanga Provinces," Sustainability, MDPI, vol. 13(14), pages 1-19, July.
    4. 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.
    5. Karol Pogorzelski, 2014. "Agricultural Development and Structural Change," IBS Policy Papers 5/2014, Instytut Badan Strukturalnych.
    6. Melkani, Aakanksha & Mason, Nicole & Mather, David & Chisanga, Brian & Jayne, Thom, 2021. "Smallholder Market Participation and Choice of Marketing Channel in the Presence of Liquidity Constraints: Evidence from Zambian Maize Markets," 2021 Conference, August 17-31, 2021, Virtual 315273, International Association of Agricultural Economists.
    7. Wouter Zant, 2012. "How does Market Access affect Smallholder Behavior? The Case of Tobacco Marketing in Malawi," Tinbergen Institute Discussion Papers 12-088/V, Tinbergen Institute, revised 25 Aug 2014.
    8. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Research Reports JRC101617, Joint Research Centre.
    9. Siziba, Shephard & Nyikahadzoi, Kefasi & Nyemeck, Joachim Binam & Diagne, Aliou & Adewale, Adekunle & Oluwole, Fatunbi, 2013. "Estimating the impact of innovation systems on maize yields: the case of Iar4d in southern Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 52(3), March.
    10. Andrew McKay & Chiara Cazzufi & Emelie Perge, 2015. "Commercialization in agriculture in rural Vietnam, 2006-14," WIDER Working Paper Series 096, World Institute for Development Economic Research (UNU-WIDER).
    11. Mujawamariya, Gaudiose & D'Haese, Marijke, 2012. "In search for incentives to gum arabic collection and marketing in Senegal: Interlocking gum trade with pre-finances from traders," Forest Policy and Economics, Elsevier, vol. 25(C), pages 72-82.
    12. Christopher Ugochukwu Nwafor & Abiodun A. Ogundeji & Carlu van der Westhuizen, 2020. "Adoption of ICT-Based Information Sources and Market Participation among Smallholder Livestock Farmers in South Africa," Agriculture, MDPI, vol. 10(2), pages 1-13, February.
    13. Sudha Narayanan, 2012. "The Heterogeneous welfare impacts of participation in contract farming schemes: Evidence from Southern India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-019, Indira Gandhi Institute of Development Research, Mumbai, India.
    14. Larochelle, Catherine & Alwang, Jeffrey, 2015. "Explaining Marketing Strategies among Bolivian Potato Farmers," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(3), pages 1-24, September.
    15. Andy McKay & Chiara Cazzuffi & Emilie Perge, 2015. "Commercialization in agriculture in rural Vietnam, 2006-14," WIDER Working Paper Series wp-2015-096, World Institute for Development Economic Research (UNU-WIDER).
    16. Osmani, Ataul Gani & Hossain, Elias, 2015. "Market Participation Decision Of Smallholder Farmers And Its Determinants In Bangladesh," Economics of Agriculture, Institute of Agricultural Economics, vol. 62(1), pages 1-17, March.
    17. S. Sharaunga & M. Mudhara, 2016. "The impact of improved ‘water-use security’ on women’s reliance on agricultural incomes in KwaZulu-Natal Province, South Africa," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(6), pages 1039-1052, December.
    18. Nguyen Hung Anh & Wolfgang Bokelmann, 2019. "Determinants of Smallholders’ Market Preferences: The Case of Sustainable Certified Coffee Farmers in Vietnam," Sustainability, MDPI, vol. 11(10), pages 1-20, May.

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    More about this item

    Keywords

    Markets and Market Access; Rural Poverty Reduction; Economic Theory&Research; Agribusiness; Access to Markets;
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