The Extent of the Market and Stages of Agricultural Specialization

40 Pages Posted: 20 Apr 2016

See all articles by M. Shahe Emran

M. Shahe Emran

George Washington University - Department of Economics

Forhad Shilpi

World Bank - Development Research Group (DECRG)

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Date Written: February 1, 2008

Abstract

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 becomes specialized 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 highlights the importance of improving farmers' access to markets through investment in transport infrastructure and removal of barriers to trading.

Keywords: Transport Economics Policy & Planning, Markets and Market Access, Political Economy, Debt Markets, Crops & Crop Management Systems

Suggested Citation

Emran, M. Shahe and Shilpi, Forhad, The Extent of the Market and Stages of Agricultural Specialization (February 1, 2008). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1100349

M. Shahe Emran

George Washington University - Department of Economics ( email )

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Forhad Shilpi (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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