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Market participation of smallholders and the role of the upstream segment: evidence from Guinea

CAMARA, Alhassane (2017): Market participation of smallholders and the role of the upstream segment: evidence from Guinea.

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Abstract

Despite theoretical advances in analyses on smallholder participation, little attention is paid to the marketing of staple food grains and the role of upstream segment. In this study, we argue that participation does not depend only on a well-functioning output market, but also on efficient and low-costs production factors. In this context, transaction costs in output market are part of total costs including those in factors markets. Therefore, the decision whether to participate or not in output market, is based on the effective margin associated to participation. Using survey data from the cereal sub-sector in Guinea, results indicate that market price of food grains must sufficiently overweight unit production costs to motivate smallholders to be market-oriented, otherwise they would prefer to meet their own consumption needs. Access to transportation equipment, adoption of technology and adherence to farmers’ organizations are determinant when promoting market participation.

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