Trade, Standards, and Poverty: Evidence from Senegal

Miet Maertens and Johan Swinnen

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

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.

Pages: 38 pages
Date: 2006
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev, nep-int and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (102)

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http://www.econ.kuleuven.be/licos/publications/dp/dp177.pdf

Related works:
Journal Article: Trade, Standards, and Poverty: Evidence from Senegal (2009)
Working Paper: Trade, Standards and Poverty. Evidence from Senegal (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:17706

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