Agricultural Prices, Household Wellbeing and Poverty Alleviation in Tanzania: The Role of Agricultural Supply Chains and Household Constraints
2017
Chauvin, Nicolas | Porto, Guido | Mulangu, Francis
We study the interplay between market structure and domestic complementary factors inthe production and consumption decisions of agricultural families in Tanzania. We study changes inmarket structure and in key parameters of the model that capture various household constraints andinstitutional access. In general term, the effect of more competition on farm gate prices depends onthe initial level of competition in each crop. For many crops, in particular food crops, there is alreadya lot of competition and further changes in the level of competition will not affect farm gate pricesmuch. In some other specific cases, in particular in cash crops, the initial level of competition is lowand more competition is likely to have larger impact on producer prices. In terms of the effect ofcomplementary policy and other factors affecting the allocation decision of farmers, the largestimpacts often come from an increase of international price. The response of prices to this shock andothers in the model is cushioned to a very large extent by the market structure.
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