Strengthening market linkages of farm households in developing countries

Type Journal Article - Applied Economic Perspectives and Policy
Title Strengthening market linkages of farm households in developing countries
Author(s)
Volume 37
Issue 2
Publication (Day/Month/Year) 2014
Page numbers 226-242
Abstract
Farm households in developing countries generally allocate a major
portion of their resources to staple food production, mainly for self-consumption.
Hence, many of them are more or less delinked from the market. It is well recognized,
however, that market participation is crucial for farm households to ensure a
flow of cash income, leading to poverty alleviation and improved livelihoods. Thus,
it is meaningful to understand what factors affect farm households’ decision to sell
food crops, which is important for strengthening their linkages with markets. The
empirical literature on impacts of market linkages has seldom focused on the determinants
of market participation. Using rice farm households in Bangladesh and applying
a double-hurdle model, this article demonstrates that the provision of general
education and the development of agricultural infrastructure such as irrigation
facilities can strengthen the market linkages of farm households by enhancing their
marketable surplus through increased production. By contrast, rainfall beyond the
optimum level, drought spells, and flood incidences can weaken market linkages by
reducing their marketable surplus through decreased production. Specific policies
such as investment in general education are drawn up based on the findings.

Related studies

»