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

49 Pages Posted: 14 Sep 2007 Last revised: 7 Feb 2021

See all articles by Jorge F. Balat

Jorge F. Balat

University of Texas at Austin - Department of Economics

Irene Brambilla

Universidad Nacional de La Plata

Guido G. Porto

World Bank; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2007

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.

Suggested Citation

Balat, Jorge F. and Brambilla, Irene and Porto, Guido, Realizing the Gains from Trade: Export Crops, Marketing Costs, and Poverty (September 2007). NBER Working Paper No. w13395, Available at SSRN: https://ssrn.com/abstract=1014343

Jorge F. Balat

University of Texas at Austin - Department of Economics ( email )

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Irene Brambilla (Contact Author)

Universidad Nacional de La Plata ( email )

La Plata, Buenos Aires 1900
Argentina

Guido Porto

World Bank ( email )

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Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/gporto

National Bureau of Economic Research (NBER)

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