25-27 October 2007 | Miet Maertens and Johan F.M. Swinnen
This paper examines the impact of high-standards trade on poverty in Senegal, focusing on the vegetable export sector. It finds that despite increasing food standards in the EU, Senegal's vegetable exports have grown significantly, leading to substantial income gains and poverty reduction. The study uses company and household survey data to analyze how changes in the supply chain have affected poor households. It reveals that the shift from smallholder contract-based farming to large-scale integrated estate production has altered the mechanism through which poor households benefit, moving from product markets to labor markets. The poorest benefit more from working on large-scale farms than from contract farming. The paper also shows that high-standards vegetable exports have a positive impact on rural incomes and poverty reduction, even when realized through large-scale estate farming. The findings challenge the notion that increasing food standards and agro-industrialization lead to the marginalization of small farmers and poor households. Instead, they demonstrate that high-standards agricultural trade can directly reduce poverty and improve welfare, even if it is realized through large-scale agro-industrial production. The study concludes that high-standards agricultural production and trade can benefit rural incomes and reduce poverty, and that poor households can benefit from agricultural export development through the labor market rather than through product markets. The findings challenge the implicit assumption that high-standards food production and trade need to integrate farm households as primary producers in the supply chain to benefit rural incomes. Instead, they show that households involved as wage workers also reap significant benefits from high-standards trade. The study also highlights that high-standards agricultural export development in poor African countries is possible, despite the many constraints. This case study on Senegalese vegetable exports adds to the existing evidence of high-standards export development in Sub-Saharan Africa and shifts the balance from viewing standards as barriers to trade to the standards-as-catalysts view.This paper examines the impact of high-standards trade on poverty in Senegal, focusing on the vegetable export sector. It finds that despite increasing food standards in the EU, Senegal's vegetable exports have grown significantly, leading to substantial income gains and poverty reduction. The study uses company and household survey data to analyze how changes in the supply chain have affected poor households. It reveals that the shift from smallholder contract-based farming to large-scale integrated estate production has altered the mechanism through which poor households benefit, moving from product markets to labor markets. The poorest benefit more from working on large-scale farms than from contract farming. The paper also shows that high-standards vegetable exports have a positive impact on rural incomes and poverty reduction, even when realized through large-scale estate farming. The findings challenge the notion that increasing food standards and agro-industrialization lead to the marginalization of small farmers and poor households. Instead, they demonstrate that high-standards agricultural trade can directly reduce poverty and improve welfare, even if it is realized through large-scale agro-industrial production. The study concludes that high-standards agricultural production and trade can benefit rural incomes and reduce poverty, and that poor households can benefit from agricultural export development through the labor market rather than through product markets. The findings challenge the implicit assumption that high-standards food production and trade need to integrate farm households as primary producers in the supply chain to benefit rural incomes. Instead, they show that households involved as wage workers also reap significant benefits from high-standards trade. The study also highlights that high-standards agricultural export development in poor African countries is possible, despite the many constraints. This case study on Senegalese vegetable exports adds to the existing evidence of high-standards export development in Sub-Saharan Africa and shifts the balance from viewing standards as barriers to trade to the standards-as-catalysts view.