The Extent of the Market and Stages of Agricultural Specialization
40 Pages Posted: 20 Apr 2016
Date Written: February 1, 2008
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
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