Transaction costs and the marketable surplus of milk in smallholder farming systems of The Gambia

Authors: Somda, Jacques; Tollens, Eric; Kamuanga, Mulumba

Source: Outlook on Agriculture, Volume 34, Number 3, September 2005 , pp. 189-195(7)

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Abstract:

The neoclassical economic paradigm views market linkages as efficient mechanisms for trading. However, the validity of this position is questionable, as markets frequently do not possess the structural conditions necessary for perfect competition. In subsistence-farming systems, factors that prevent greater participation of smallholders in markets can be found from the production level to the access to markets themselves. This study investigates the transaction-cost factors operating in smallholder dairy farms in The Gambia. The results indicate that access to market at the farm gate, the number of local cows and the distance to the nearest city increase the likelihood of market participation by producers and the marketing of surpluses of dairy products. Increases in home consumption lead to decreases in sales and of farmers' participation in milk marketing. To achieve pro-poor rural growth, it is therefore essential to address explicitly the low productivity of dairy cattle, low capital endowments and market accessibility for smallholder farmers.

Keywords: TRANSACTION-COST FACTORS; MARKET PARTICIPATION; SMALLHOLDERS; MILK; THE GAMBIA

Document Type: Research article

DOI: http://dx.doi.org/10.5367/000000005774378784

Publication date: 2005-09-01

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Outlook on Agriculture is an international peer-review journal devoted to agricultural science, policy and strategy. The journal is published quarterly and provides analysis, reviews and commentary for an international and interdisciplinary readership. Special attention is paid to agricultural policy, international trade in the agricultural sector, strategic developments in food production, the role of agriculture in social and economic development, agriculture in developing countries, and environmental issues. Readers include academics, policy makers and practitioners. For more details go to www.ippublishing.com
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Transaction costs and the marketable surplus of milk in smallholder farming systems of The Gambia

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