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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.

Abstract:
There is no consensus about how globalization - trade and foreign investments - affects poverty reduction. Using household survey data, this study contributes to the empirical literature on globalization and poverty by analyzing the household-level implications of increased foreign investments and trade in the horticulture sector in Senegal. In many aspects this represents what many would consider a "worst-case scenario". Stringent rich country standards are imposed on exports and the supply chain is controlled by a single multinational company with extreme levels of supply base consolidation and vertical integration and complete exclusion of smallholder suppliers. We analyze and quantify income and poverty effects under these "worst-case conditions" and find significant positive welfare impacts through employment creation and labor market participation.

FDI, poverty, vertical coordination, modern supply chains

Abstract:
In this paper we address the question of farm-nonfarm linkages at the household level for a case-study in Senegal. We examine whether increasing off-farm employment opportunities for rural households - resulting from increased horticulture exports and associated agro-industrialization - has benefitted the smallholder farm sector through investment linkages. We use data from a household survey in the main horticulture export region in Senegal. We find that access to unskilled employment in the export agro-industry has contributed to alleviation farmers' liquidity constraints, resulting in increased smallholder agricultural production.

farm-nonfarm linkages, agri-food exports, smallholder farming, rural development

Abstract:
Thirty years ago, a vast share of the poor and middle income countries were heavily state-controlled. The effects of the liberalizations in the 1980s and 1990s differed strongly between regions in Africa, Asia and Europe. This paper first documents these differences in reform effects in a comparative framework and then develops a model to formally analyze how liberalization affects production and income distribution when institutions that govern production and exchange are also affected. We derive hypotheses on how the endogenous institutional adjustments affect the supply response to the liberalizations. We use these insights to forward a series of explanations on the differences in performance across countries
following liberalization.

Abstract:
During the past decades the global food system changed dramatically with increased trade in high-value food products, increased exports from developing countries, increased consolidation and dominance of large multinational food companies, and increased proliferation of public and private food standards. As a consequence, global food trade is increasingly organised around vertically coordinated supply chains rather than around spot market transactions. While there is consensus that these structural changes are profoundly changing the way food is produced and traded, there is no consensus on the overall welfare implications of increased high-value food exports and supply chain restructuring in poor countries. In this paper we discuss the income and poverty implications of expanded horticulture exports and changing supply chain structures for rural households in Sub-Saharan African exporting countries. We put together the economic arguments; distinguish different channels through which rural households are affected; provide evidence from three comparative case-studies on high-value horticulture exports; and derive implications for policy makers, private investors, and the development aid community.

trade, poverty, modern supply chains, Africa

Abstract:
During the past decades the global food system changed dramatically with increased trade in high-value food products, increased exports from developing countries, increased consolidation and dominance of large multinational food companies, and increased proliferation of public and private food standards. As a consequence, global food trade is increasingly organised around vertically coordinated supply chains rather than around spot market transactions. While there is consensus that these structural changes are profoundly changing the way food is produced and traded, there is no consensus on the overall welfare implications of increased high-value food exports and supply chain restructuring in poor countries. In this paper we discuss the income and poverty implications of expanded horticulture exports and changing supply chain structures for rural households in Sub-Saharan African exporting countries. We put together the economic arguments; distinguish different channels through which rural households are affected; provide evidence from three comparative case-studies on high-value horticulture exports; and derive implications for policy makers, private investors, and the development aid community.

trade, poverty, modern supply chains, Africa

Abstract:
The rapid spread of modern supply chains in developing countries is profoundly changing the way food is produced and traded. In this paper we examine the gender implications in modern supply chains. We conceptualize the various mechanisms through which women are directly affected, we review existing empirical evidence and add new survey-based evidence. Empirical findings from our own survey suggest that modern supply chains may be associated with reduced gender inequalities in rural areas. We find that women benefit more and more directly from large-scale estate production and agro-industrial processing, and the creation of employment in these modern agro-industries than from smallholder contract-farming.

Abstract:
Thirty years ago, a vast share of the poor and middle income countries were heavily statecontrolled. The effects of the liberalizations in the 1980s and 1990s differed strongly between regions in Africa, Asia and Europe. This paper first documents these differences in reform effects in a comparative framework and then develops a model to formally analyze how liberalization affects production and income distribution when institutions that govern production and exchange are also affected. We derive hypotheses on how the endogenous institutional adjustments affect the supply response to the liberalizations. We use these insights to forward a series of explanations on the differences in performance across countries following liberalization.