The extent of the market and stages of agricultural specialization

Type Report
Title The extent of the market and stages of agricultural specialization
Author(s)
Publication (Day/Month/Year) 2008
URL http://econpapers.repec.org/RePEc:wbk:wbrwps:4534
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.

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