Are smallholders disadvantaged by ‘double sell low, buy high’ dynamics on rural markets in Madagascar?

ABSTRACT

Local markets in rural areas constitute the main means of market integration for smallholders in developing countries. They are used for selling and buying agricultural products and basic necessities. Frequently infrastructure is poor and transport costs high so that farmers’ access is restricted to few local markets. To understand local market dynamics we investigated the Mahafaly Plateau region in Madagascar as an example of a rural region in a developing country, where farmers depend on small local markets. We collected data on usage of markets and monitored prices for crops and livestock for two years on five markets. We find an extreme seasonality of market prices for crops and livestock. Given prevailing marketing strategies and price dynamics, farmers face a ‘double sell low, buy high’ challenge for crops and livestock leading to welfare losses, increased food insecurity and seasonal hunger.

KEYWORDS:

• Developing countries
• seasonality
• food security
• econometric analysis
• network analysis
• market monitoring

Acknowledgements

The study was carried out within the SuLaMa project under the ‘Accord de Collaboration’ between the Universities of Antananarivo, Madagascar National Parks and the German partner universities and under the cooperation agreement between the German Universities of Hamburg and Cottbus-Senftenberg. The authors are grateful to the World Wide Fund for Nature (WWF) and the SuLaMa project team for supporting their work. Market monitors and field assistant made data collection feasible in 5 villages, particularly Leopold Andrianjohary. We thank Frank Wätzold and one anonymous reviewer for constructive comments that helped to further improve the manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The study was funded by the German Federal Ministry of Education and Research (BMBF) as part of a project on sustainable land management of the Mahafaly Plateau (SuLaMa; grant numbers 01LL0914G, 01LL0914A).