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Realizing the Gains From Trade: Export Crops, Marketing Costs, and Poverty

Jorge Balat (), Irene Brambilla and Guido Porto

No 13395, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.

JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-afr, nep-agr, nep-int and nep-mkt
Note: ITI
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Published as Balat, Jorge & Brambilla, Irene & Porto, Guido, 2009. "Realizing the gains from trade: Export crops, marketing costs, and poverty," Journal of International Economics, Elsevier, vol. 78(1), pages 21-31, June.

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Journal Article: Realizing the gains from trade: Export crops, marketing costs, and poverty (2009) Downloads
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