Are smallholders disadvantaged by ‘double sell low, buy high’ dynamics on rural markets in Madagascar?

Abstract

ABSTRACT Local markets in rural areas constitute the main means of market integration for smallholders in developing countries. They are used for selling and buying agricultural products and basic necessities. Frequently infrastructure is poor and transport costs high so that farmers’ access is restricted to few local markets. To understand local market dynamics we investigated the Mahafaly Plateau region in Madagascar as an example of a rural region in a developing country, where farmers depend on small local markets. We collected data on usage of markets and monitored prices for crops and livestock for two years on five markets. We find an extreme seasonality of market prices for crops and livestock. Given prevailing marketing strategies and price dynamics, farmers face a ‘double sell low, buy high’ challenge for crops and livestock leading to welfare losses, increased food insecurity and seasonal hunger.