By Chrstopher L. Delgado, Jane Hopkins, Valerie A. Kelly
How a lot additional internet source of revenue progress should be had in rural parts of Africa by way of expanding the spending energy of neighborhood families? the reply is dependent upon how rural families spend increments to source of revenue, no matter if the goods wanted might be imported to the neighborhood zone based on elevated call for, and, if no longer, even if elevated call for will result in new neighborhood creation or just to cost rises. for each greenback in new farm source of revenue earned, no less than one additional-tional buck might be discovered from progress multipliers, in keeping with Agricultural development Linkages in Sub-Saharan Africa, learn record 107, by means of Christopher L. Delgado, Jane Hopkins, and Valerie A. Kelly, with Peter Hazell, Anna A. McKenna, Peter Gruhn, Behjat Hojjati, Jayashree Sil, and Claude Courbois.
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Extra info for Agricultural Growth Linkages in Sub-Saharan Africa
By splitting the tradables sector, to allow for both agricultural and nonagricultural goods, the model presented here makes it possible to examine the effects of technological change or other supply shifters for both agriculture and nonagriculture on rural growth linkages. An important qualification of this model is the embedded assumption that the supply of nontradables is perfectly elastic with respect to price. Where this assumption does 34 not hold strictly, some of the estimated multiplier is monetary rather than real: producers of nontradables reap higher unit prices in addition to real income gains from expanded output.
However, purchasing power differs substantially between the two zones studied in Senegal. The central Groundnut Basin, closer to Dakar, has higher purchasing power on average than the more remote southeastern Groundnut Basin, where purchasing power is closer to that of the other West African countries studied. Other structural differences of note between the sample countries are the relative openness of the economies and the relative importance of agriculture in national income. In 1989, imports as a share of GDP were highest in Zambia, at 34 percent, compared with 32 percent in Senegal, 29 percent in Burkina Faso, 28 percent in Zimbabwe, and 22 percent in Niger (World Bank 1992).
Substitution will occur at the margin, but the real income penalty of switching to rice is high in a 31 low-income area. Therefore, the elasticity of substitution is low; coarse grain prices have plenty of latitude to fluctuate without inducing additional large stabilizing inflows of rice. Overall, Sahelian millet and sorghum are classified as nontradables with respect to world markets, except for Niger, where an active coarse grains trade with Nigeria suggests that this would be inappropriate.