By Chrstopher L. Delgado, Jane Hopkins, Valerie A. Kelly
How a lot additional web source of revenue development may be had in rural components of Africa through expanding the spending strength of neighborhood families? the reply depends upon how rural families spend increments to source of revenue, even if the goods wanted might be imported to the neighborhood zone according to elevated call for, and, if no longer, no matter if elevated call for will result in new neighborhood construction or just to cost rises. for each buck in new farm source of revenue earned, at the least one additional-tional buck might be learned from progress multipliers, in keeping with Agricultural progress Linkages in Sub-Saharan Africa, study document 107, via 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
Cost of imported grain in West African ports to transport it to markets in the interior of West Africa (Delgado 1992). Furthermore, although grain can be imported by African price-taking countries in large quantities at a constant price, imported cereals such as rice and wheat that are consumed by urban dwellers in Africa often are much more expensive calories on a per unit basis than local grain. Since much of the population of West Africa is very poor and grain consumption is sensitive to real income, only a small share of the people can substitute expensive imported grains for local food items.
Households at all income levels have high marginal propensities to consume rurally produced goods, with values falling slightly as incomes rise. Low-income households spend 7 percent more of their incremental income on rurally produced goods and services than high-income households (Hazell and Röell 1983). Celis and Bliven (1991) examined consumption linkages in Zambia by estimating Engel function expenditures on various goods and services. Their estimates of marginal changes in budget shares indicate that 75 percent of incremental income went to food and 25 percent went to nonfood.
Sectoral and Tradability Classification of Goods and Services As discussed in Chapter 2, the expected magnitude of growth multipliers depends to a large extent on the assumptions about demand constraints included in the sectoral classification of goods and services into tradables and nontradables. Since farmers in Africa typically earn half their income from activities other than the production of crops and livestock, it is misleading to define “farm” and “nonfarm” by location. In fact, farm households are also rural nonfarm households, especially in West Africa (Hopkins, Kelly, and Delgado 1994).