African Smallholders and Their Market Environment

Alan de Brauw () and Erwin Bulte
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Alan de Brauw: International Food Policy Research Institute

Chapter Chapter 1 in African Farmers, Value Chains and Agricultural Development, 2021, pp 1-19 from Palgrave Macmillan

Abstract: Abstract Smallholder farmers in Africa are poor and appear unproductive relative to larger farmers. But once one takes their environment into account, we argue they make rational production decisions given their multiple objectives under the multiple constraints they face. These constraints are shaped by transaction costs, which determine what smallholders can buy and sell. Transaction costs include not just transporting goods to market, but also costs of aggregation, dealing with risk, obtaining liquidity, and costs related to trust, market power, and even storage. The remainder of the book, then, provides historical and institutional reasons why African smallholders face high transaction costs. After explaining why some solutions will likely fail, the book concludes with what we consider promising areas for interventions to catalyze Structural Transformation 2.0 in Africa.

Keywords: Agricultural constraints; Transaction costs; Structural transformation 2.0 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psachp:978-3-030-88693-6_1

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DOI: 10.1007/978-3-030-88693-6_1

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