How Costly Is It for Poor Farmers to Lift Themselves Out of Subsistence?

The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar's farmers. The analysis is based on a simple asset-return model of occupational choice. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large - somewhere between 124 and 153 percent of a subsistence farmer's annual production. Our results make it possible to identify farm characteristics likely to generate large gains, if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.

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Bibliographic Details
Main Authors: Cadot, Olivier, Dutoit, Laure, Olarreaga, Marcelo
Format: Policy Research Working Paper biblioteca
Language:English
Published: World Bank, Washington, DC 2006-04
Subjects:ACREAGE, ADJUSTMENT ASSISTANCE, AGRICULTURAL MARKETS, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTS, AGRICULTURAL REVENUE, AGRICULTURE ORGANIZATION, ARBITRAGE, BALANCE SHEETS, BARRIERS TO ENTRY, BENCHMARK, CANE SUGAR, CASH CROPS, CASH INCOME, COMMERCIAL AGRICULTURE, COMMERCIAL FARMING, COMPARATIVE ADVANTAGE, CONSUMER PRICES, CONSUMPTION EXPENDITURES, COTTON, CREDIT MARKETS, CROPLAND, DEVELOPMENT ECONOMICS, DISCOUNTED VALUE, DIVERSIFICATION, DIVIDENDS, ECONOMIES OF SCALE, EQUATIONS, EXPECTED RETURN, EXPENDITURE, EXPENDITURES, EXPORT, EXPORTS, EXTREME POVERTY, FAIR, FARM, FARM OUTPUT, FARM POPULATION, FARM SIZE, FARMER, FARMERS, FARMS, FEMALE-HEADED HOUSEHOLDS, FLAVOR, FOOD CROPS, GDP, HOUSEHOLD HEAD, HOUSEHOLD HEADS, HURDLES, INTENSIVE FARMING, INTEREST RATE, LACK OF CREDIT, LAND OWNERSHIP, LANDOWNER, LDCS, LIVESTOCK, LIVESTOCK SALES, MARKET DISRUPTION, MARKET ENTRY, MARKET ENTRY COST, MARKET FAILURE, MARKET FAILURES, MARKET PARTICIPANTS, MARKET PRICES, MARKET REFORMS, MARKET SECTOR, MARKET STRUCTURE, MARKETING, MARKETING BOARDS, MIDDLEMEN, MILLS, MORAL HAZARD, OPPORTUNITY COST, OPPORTUNITY COSTS, OWNERSHIP STRUCTURE, POOR COUNTRIES, POOR FARMERS, POVERTY ALLEVIATION, POVERTY LINE, PRICE CHANGES, PRICE INDEX, PRICE INDICES, PRICE VOLATILITY, PRODUCER ASSOCIATION, PRODUCER PRICES, PRODUCT DIFFERENTIATION, REAL INCOME, RISK AVERSION, RISK PREMIUM, RURAL AREA, RURAL CREDIT, RURAL HOUSEHOLDS, RURAL POVERTY, RURAL ROADS, SALE, SALES, SCHOOLING, SHARECROPPING, SUBSISTENCE, SUBSISTENCE AGRICULTURE, SUBSISTENCE FARMERS, SUBSISTENCE FARMING, SUGAR, SUGAR CANE, SUNK COSTS, SURPLUS, TRADE FLOWS, TRADE REFORMS, TRANSACTION, VALUATION, VOLATILITY, THRESHOLD REGRESSION, SWITCHING REGRESSION, UNKNOWN SAMPLE SEPARATION, ENTRY COSTS.,
Online Access:http://documents.worldbank.org/curated/en/2006/04/6710341/costly-poor-farmers-lift-out-poverty
http://hdl.handle.net/10986/8733
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