Faith & Economics
NUMBER 50, Fall 2007

Symposium: Making Markets Work for the Rural Poor

Introduction to a Special Issue on Making Markets Work for the Rural Poor
Christopher B. Barrett and Thomas Reardon 

Livestock Markets in West Africa: Potential Tools for Poverty Reduction?
Timothy O. Williams and Iheanacho Okike 

Abstract: Drawing on surveys of traders and weekly sales transactions data collected from January 2000 – June 2001 in three frontier markets linking four countries, this paper evaluates how livestock markets currently function in relation to poor livestock producers and traders in the central corridor of West Africa. Empirical analysis indicates that although market preferences appear to be well transmitted through prices to small-scale livestock producers, they are still largely unable to supply in sufficient quantity top quality animals demanded by buyers. Limited own financial resources and access to external finance prevent small-scale livestock traders from expanding their business activities at the same time that high transport and handling costs and taxes hinder the performance of large-scale traders engaged in cross-border trade. This information provides insights into the challenges confronting market participants and how they can be assisted through program and policy interventions to take advantage of market opportunities.

The Dynamics of the Global Fruit and Vegetable Chains: Export-Oriented Agriculture as a Pro-Poor Strategy?
Ruerd Ruben and Koos van Eyk 

Abstract: Exports of high-value fruits and vegetables are increasingly considered a key strategy for economic development. While favorable climate conditions and low labor costs provide promising opportunities for subcontracting production to developing countries, stable access to markets also depends on options for quality upgrading that determine dynamic comparative advantage. This article addresses the question whether fruit and vegetable exports also have potential as a sustainable pro-poor development strategy. We analyze the trade and value-added structure within global fruit and vegetable chains, focusing attention on the governance regimes and the role of smallholders. After initial growth in market shares, the participation of the least-developed countries decreased in recent years. The replacement of outgrowing arrangements by supply chain coordination with integrated quality management poses major constraints to smallholder involvement, unless specific arrangements are in place. In such more integrated supply chains, cost motives are less relevant while strategic sourcing and functional upgrading become increasingly important.

Market Participation by Rural Households in a Low-Income Country: An Asset-Based Approach Applied to Mozambique
Duncan Boughton, David Mather, Christopher B. Barrett, Rui Benfica, Danilo Abdula, David Tschirley, and Benedito Cunguara 

Abstract: The transformation from a subsistence-oriented agricultural sector to one where farmers are integrated into product, input, and service markets is at the heart of many poverty reduction strategies. But this transformation is occurring painfully slowly in Africa. To speed up the process, significant investments are being made in public goods such as roads and market information to promote farmer-to-market linkages. This paper examines the relationship between assets and market access for different types of crop market in Mozambique using a Heckman two-stage regression model and data from a nationally representative rural household survey conducted in 2002. Evidence of increasing returns to household assets in all crop market types is explored further using a non-parametric approach. The evidence indicates that only a small proportion of Mozambican smallholders currently have a sufficient asset base to participate profitably in crop markets. We conclude that while investment in public goods is a necessary condition for transformation to occur, attention must also be given to facilitate growth in household assets.

Transformational Development: Mitigating Rural Poverty with the Poor
Paul N. Wilson and John E. Stapleford

Abstract: Foreign aid programs have come under increasing scrutiny in recent years as policy makers and analysts question the efficiency and effectiveness of government to government programs. The biblical command to care for the poor has led some Christian non-governmental organizations to develop transformational development programs directed at both the physical and spiritual needs of the poor. This development approach confronts locally-accepted world-
and life-views, builds positive community networks, and promotes political and economic entrepreneurship while working directly with the beneficiaries in a manner that promotes mutual accountability. Transformational development program experience indicates that personal morality, project scale, and human relationships matter as the poor struggle to escape their poverty trap.

Book Reviews

Economics in Christian Perspective: Theory, Policy, and Life Choices
by Victor V. Claar and Robin J. Klay
Reviewed by John E. Anderson 

Alternatives to Economics: Christian Socio-Economic Perspectives
by Clive Beed and Cara Beed
Reviewed by Jim Halteman 

The Bourgeois Virtues: Ethics for an Age of Commerce
by Deidre McCloskey
Reviewed by Paul Oslington