Distance to market and farm-gate prices of staple beans in rural Nicaragua

Ayako Ebata, Pamela Velasco and Stephan von Cramon-Taubadel

No 197540, GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development

Abstract: While smallholder market participation is seen as a catalyst for poverty alleviation, farmers in rural areas face a number of challenges in doing so. One of the most important factors is considered transaction costs related to transportation. Our study quantifies the benefits associated with improvement of rural road infrastructure by scrutinizing farm-gate prices of beans in rural Nicaragua. We find that the longer the distance and traveling time are to major commercial centers from farming communities, the less farm-gate prices producers receive. We find that a decrease in distance and traveling time by one unit is associated with an increase in farm-gate prices by 2-2.5 cents/qq. If infrastructure development can reduce travel time by 25%, an average farm would increase its annual revenue from beans by between $27.69 and $125.96 (between 4% and 18% of annual revenue today). Given that such infrastructure development affects all farmers and all crops, our findings suggest a larger implication at the sectorial level.

Keywords: Agricultural and Food Policy; International Development (search for similar items in EconPapers)
Pages: 23
Date: 2015-01
New Economics Papers: this item is included in nep-agr and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/197540/files/GlobalFood_DP56.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:gagfdp:197540

DOI: 10.22004/ag.econ.197540

Access Statistics for this paper

More papers in GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().