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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Large-scale agro-industrial investments and rural poverty: evidence from sugarcane in Malawi
Authors:Herrmann, Raoul
Grote, Ulrike
Year:2015
Periodical:Journal of African Economies (ISSN 0963-8024)
Volume:24
Issue:5
Pages:645-676
Language:English
Geographic term:Subsaharan Africa
Subjects:agroindustry
investments
poverty reduction
sugar
External link:https://doi.org/10.1093/jae/ejv015
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. The authors 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. Bibliogr., notes, ref., sum. [Journal abstract]
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