Economies of scope and the cash crop — Food crop debate in Senegal

Abstract

The government of Senegal plans to achieve national food self-sufficiency by inducing farmers to switch away from cash crops toward food-crop production. This paper examines selected economic consequences of the planned substitution using empirical data recently collected in southeastern Senegal. Cost function estimates suggest that farmers are currently producing “too much” food-crop and “too little” cash-crop output, given existing technology and observed relative prices. Moreover, economies of scope in producing both food crops and cash crops on the same farm result in a 22% cost saving relative to growing both types of crops on separate, specialized farms.