Details
| Original language | English |
|---|---|
| Pages (from-to) | 645-676 |
| Number of pages | 32 |
| Journal | Journal of African economies |
| Volume | 24 |
| Issue number | 5 |
| Early online date | 27 Aug 2015 |
| Publication status | Published - Nov 2015 |
Abstract
This article investigates the potential household welfare implications of large-scale agro-industry investments in Sub-Saharan Africa. Specifically, it compares the income and poverty of households integrated into a Malawian sugar investment with those households not integrated. Two different supply-chain set-ups are studied: smallholder outgrower and vertically integrated estate-production systems. Potential selection bias is addressed using propensity score matching and a number of robustness checks. We find significant positive income differences between participants in either supply-chain set-up and the respective counterfactual. Overall, income poverty is significantly lower among outgrowers relative to the counterfactual, whereas in the case of estate workers these differences are only significant for the extreme poverty line. Qualitative interviews confirm these results, but they also allude to risks for the rural poor associated with social conflicts in the expansion of new outgrower schemes as well as a lack of transparency in the operation of existing schemes, which are likely to undermine the poverty-reducing potentials of such investments.
Keywords
- Agro-industrial investments, Estate employment, Malawi, Outgrowers, Sugarcane
ASJC Scopus subject areas
- Social Sciences(all)
- Development
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
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In: Journal of African economies, Vol. 24, No. 5, 11.2015, p. 645-676.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Large-scale agro-industrial investments and rural poverty
T2 - Evidence from sugarcane in Malawi
AU - Herrmann, Raoul
AU - Grote, Ulrike
PY - 2015/11
Y1 - 2015/11
N2 - This article investigates the potential household welfare implications of large-scale agro-industry investments in Sub-Saharan Africa. Specifically, it compares the income and poverty of households integrated into a Malawian sugar investment with those households not integrated. Two different supply-chain set-ups are studied: smallholder outgrower and vertically integrated estate-production systems. Potential selection bias is addressed using propensity score matching and a number of robustness checks. We find significant positive income differences between participants in either supply-chain set-up and the respective counterfactual. Overall, income poverty is significantly lower among outgrowers relative to the counterfactual, whereas in the case of estate workers these differences are only significant for the extreme poverty line. Qualitative interviews confirm these results, but they also allude to risks for the rural poor associated with social conflicts in the expansion of new outgrower schemes as well as a lack of transparency in the operation of existing schemes, which are likely to undermine the poverty-reducing potentials of such investments.
AB - This article investigates the potential household welfare implications of large-scale agro-industry investments in Sub-Saharan Africa. Specifically, it compares the income and poverty of households integrated into a Malawian sugar investment with those households not integrated. Two different supply-chain set-ups are studied: smallholder outgrower and vertically integrated estate-production systems. Potential selection bias is addressed using propensity score matching and a number of robustness checks. We find significant positive income differences between participants in either supply-chain set-up and the respective counterfactual. Overall, income poverty is significantly lower among outgrowers relative to the counterfactual, whereas in the case of estate workers these differences are only significant for the extreme poverty line. Qualitative interviews confirm these results, but they also allude to risks for the rural poor associated with social conflicts in the expansion of new outgrower schemes as well as a lack of transparency in the operation of existing schemes, which are likely to undermine the poverty-reducing potentials of such investments.
KW - Agro-industrial investments
KW - Estate employment
KW - Malawi
KW - Outgrowers
KW - Sugarcane
UR - http://www.scopus.com/inward/record.url?scp=84949568587&partnerID=8YFLogxK
U2 - 10.1093/jae/ejv015
DO - 10.1093/jae/ejv015
M3 - Article
AN - SCOPUS:84949568587
VL - 24
SP - 645
EP - 676
JO - Journal of African economies
JF - Journal of African economies
SN - 0963-8024
IS - 5
ER -