The Extent of the Market and Stages of Agricultural Specialization
37 Pages Posted: 11 Aug 2007
Date Written: April 10, 2007
This paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market (size of the urban market) relevant for the village. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure starts to specialize again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector. The evidence also indicates the existence of a monotonically increasing relationship between the degree of market participation among the households in a village and the extent of the relevant urban market.
Keywords: Structural Change, Agriculture, Crop Specialization, The Extent of the Market, Market versus Home Production, Commercialization
JEL Classification: O12, R11, R12
Suggested Citation: Suggested Citation