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The extent of the market and stages of agricultural specialization, Volume 1
 
Author:Emran, M. Shahe; Shilpi, Forhad; Country:World;
Date Stored:2008/02/26Document Date:2008/02/01
Document Type:Policy Research Working PaperSubTopics:Transport Economics Policy & Planning; Political Economy; Markets and Market Access; Crops and Crop Management Systems; Debt Markets
Language:EnglishRegion:The World Region
Report Number:WPS4534Collection Title:Policy Research working paper ; no. WPS 4534
Volume No:1  

Summary: 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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