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Secondary towns, agricultural prices, and intensification: evidence from Ethiopia

Author

Listed:
  • Joachim Vandercasteelen
  • Seneshaw Tamru Beyene
  • Bart Minten
  • Jo Swinnen
Abstract
Urbanization is happening fast in the developing world and especially so in sub-Saharan Africa where growth rates of cities are among the highest in the world. While cities and, in particular, secondary towns, where most of the urban population in sub-Saharan Africa resides, affect agricultural practices in their rural hinterlands, this relationship is not well understood. To fill this gap, we develop a conceptual model to analyze how farmers’ proximity to cities of different sizes affects agricultural prices and intensification of farming. We then test these predictions using large-scale survey data from producers of teff, a major staple crop in Ethiopia, relying on unique data on transport costs and road networks and implementing an array of econometric models. We find that agricultural price behavior and intensification is determined by proximity to a city and the type of city. While proximity to cities has a strong positive effect on agricultural output prices and on uptake of modern inputs and yields on farms, the effects on prices and intensification measures are lower for farmers in the rural hinterlands of secondary towns compared to primate cities.

Suggested Citation

  • Joachim Vandercasteelen & Seneshaw Tamru Beyene & Bart Minten & Jo Swinnen, 2017. "Secondary towns, agricultural prices, and intensification: evidence from Ethiopia," Working Papers of Department of Economics, Leuven 579601, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:579601
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    References listed on IDEAS

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    Cited by:

    1. Ameye, H., 2018. "Secondary Towns The Nutritional Sweet Spot. A study of East Africa," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277211, International Association of Agricultural Economists.

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    Keywords

    urbanization; cities; secondary towns; Ethiopia; sub-Saharan Africa; agricultural prices; intensification;
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