Supply Chains in Export Agriculture, Competition, and Poverty in Sub-Saharan Africa

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supplychains-e1371413465255Guido Porto, Nicolas Depetris Chauvin and Marcelo Olarreaga (eds)

Rural poverty is a widespread phenomenon in sub-Saharan Africa. While most farmers produce for home consumption, some are engaged in high-value export agriculture crops and changes in export prices and in the conditions faced in export markets (both internally and externally) can therefore play a big role in shaping poverty in a region. Traditionally, the literature has focused on how external conditions affect poverty. By contrast, this unique and timely book breaks new ground by exploring domestic factors. In particular, the authors investigate the role played by the structure of competition in export agriculture supply chains Combining theory with detailed empirical analyses of the cotton, coffee, tobacco, and cocoa sectors in eight sub-Saharan countries, the book reveals important new insights. While there is much variation within and between countries and crops, the authors show conclusively that measures to increase competition in export agriculture supply chains can be just as significant as external factors such as subsidies, quotas, and tariffs – and that these measures can have worthwhile effects on poverty reduction in the exporting countries.

“The last two decades’ reforms in Africa’s agricultural marketing channels have taken place against a background of relative ignorance of how these markets work. Combining theory (with coverage of complex contractual arrangements like outgrower contracts), household surveys, and in-depth knowledge of local contexts, this masterful book provides the first systematic answer. In their characteristically careful approach, the authors use simulation analysis based on oligopoly theory to isolate and quantify the effect of policy shocks one by one and with synergies, yielding precise orders of magnitude where theory is usually silent. Written in a limpid style, this book is a must-read for academics and sophisticated policy analysts. It will be a reference for years to come.”

Olivier Cadot, Professor of International Economics and Director of the Institute of Applied Economics at the University of Lausanne

“This is an innovative and important book. The authors explicitly model the institutions and industrial organization of global trade and commodity exchanges, which have major implications for the efficiency and surplus distribution among the participants in the chain. The combination of theory and empirical analysis across many developing countries is unique and yields important new insights.”

Jo Swinnen, Professor of Development Economics at K.U.Leuven, Director of LICOS-Centre for Institutions and Economic Performance at K.U.Leuven and Senior Research Fellow in the Centre for European Policy Studies (CEPS), Brussel

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