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The Elimination Of Madagascar’S Vanilla Marketing Board, Ten Years On, Laure C. Dutoit, Olivier Cadot, Jaime De Melo
The Elimination Of Madagascar’S Vanilla Marketing Board, Ten Years On, Laure C. Dutoit, Olivier Cadot, Jaime De Melo
Olivier Cadot
This paper explores how the elimination of Madagascar’s Vanilla Marketing Board (VMB) in 1993 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between FOB and farmgate prices have narrowed down and analysis of changes in poverty and inequality suggests some positive impact in regions where vanilla is grown, though it is difficult to control for other intervening factors. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited …
How Costly Is It For Poor Farmers To Lift Themselves Out Of Subsistence, Laure C. Dutoit, Olivier Cadot, Marcelo Olarreaga
How Costly Is It For Poor Farmers To Lift Themselves Out Of Subsistence, Laure C. Dutoit, Olivier Cadot, Marcelo Olarreaga
Olivier Cadot
The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar's farmers. The analysis is based on a simple asset-return model of occupational choice. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large---somewhere between 124 and 153 percent of a subsistence farmer's annual production. Our results make it possible to identify farm characteristics likely to generate large gains if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.