Agricultural Markets in Benin and Malawi: The Operation and Performance of Traders

74 Pages Posted: 20 Apr 2016

Date Written: December 31, 2001

Abstract

Drawing on original surveys of agricultural traders, the authors examine how traders operate in two Sub-Saharan African countries, Benin and Malawi. They find the following: The largest transaction costs for traders are search and transport. Search methods rely principally on personal visits by the trader, which raises search costs. And since enterprises are very small, transport represents a large share of marketing costs. Brand recognition, grading, and quality certification are nonexistent. Brokers and agents are not organized in commodity exchanges. Quantities are not pooled for transport and storage so as to achieve returns to scale. Interseasonal and interregional arbitrage is not feasible for most traders, who prefer to operate day to day in a small territory. This information provides some important insights into how agricultural trade could be improved. It suggests possible policy interventions in four main areas: increasing traders' asset base, reducing transaction risk, promoting more sophisticated business practices, and reducing physical marketing costs.

Keywords: Environmental Economics & Policies, Markets and Market Access, Economic Theory & Research, Payment Systems & Infrastructure, Banks & Banking Reform, Access to Markets, International Terrorism & Counterterrorism

Suggested Citation

Eid, Florence, Agricultural Markets in Benin and Malawi: The Operation and Performance of Traders (December 31, 2001). World Bank Policy Research Working Paper No. 2734, Available at SSRN: https://ssrn.com/abstract=634437

Florence Eid (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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