The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On

This paper explores how the elimination of Madagascar's Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Mar...

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Main Authors:	Cadot, Olivier, Dutoit, Laure, de Melo, Jaime
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGRICULTURAL ACTIVITIES AGRICULTURAL HOUSEHOLDS AGRICULTURE ASYMMETRIC INFORMATION BEANS CAPITAL MARKETS CARTEL CASH CROPS CASHEW NUTS CLIMATIC CONDITIONS CLOVES COCOA COFFEE COFFEE PRICES COLLUSION COMMODITY CONTESTABILITY COTTON COURNOT COMPETITION CROP CROP HUSBANDRY CROPLAND CULTIVATION CURING DATES DEVELOPMENT STRATEGY DISCOUNT RATE EXPENDITURE EXPORT CROPS EXPORTS EXTERNALITIES EXTREME POVERTY FAO FARM FARMER FARMER INCOMES FARMERS FARMING FARMS FERMENTATION FIXED PRICES FOOD CROPS FOOD INDUSTRY FREE MARKET GDP GOVERNMENT REGULATION HARVESTING HARVESTS INCOME INEFFICIENCY INVENTORIES LIQUIDITY MARGINAL PRODUCT MARKET CONDITIONS MARKET FAILURE MARKET FAILURES MARKET INCENTIVES MARKET POWER MARKET PRICE MARKET REFORMS MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MOLD MONOPOLY MONOPOLY RENTS NATIONAL INCOME NATURAL RESOURCES OVERVALUATION PEANUTS PEPPER PLANTATIONS PRICE CHANGE PRICE CHANGES PRICE CONTROLS PRICE INCENTIVES PRICE INDEX PRICE POLICY PRICE VARIATION PRICE VOLATILITY PRODUCE PRODUCER ORGANIZATION PRODUCER PRICE PRODUCER PRICES PRUNING SALES SEEDS SHARECROPPING STATISTICAL ANALYSIS STOCKS SUB-SAHARAN AFRICA SUBSTITUTE SUBSTITUTES SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGAR CANE SUPPLIER SUPPLIERS TAXATION TILLING TOBACCO TRADE REFORMS TREES TROPICAL CROPS TYING VANILLA WORLD MARKET WTO YIELDS
Online Access:	http://documents.worldbank.org/curated/en/2006/08/6962156/elimination-madagascars-vanilla-marketing-board-ten-years http://hdl.handle.net/10986/8374

id	okr-10986-8374
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spelling	okr-10986-83742021-04-23T14:02:41Z The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On Cadot, Olivier Dutoit, Laure de Melo, Jaime AGRICULTURAL ACTIVITIES AGRICULTURAL HOUSEHOLDS AGRICULTURE ASYMMETRIC INFORMATION BEANS CAPITAL MARKETS CARTEL CASH CROPS CASHEW NUTS CLIMATIC CONDITIONS CLOVES COCOA COFFEE COFFEE PRICES COLLUSION COMMODITY CONTESTABILITY COTTON COURNOT COMPETITION CROP CROP HUSBANDRY CROPLAND CULTIVATION CURING DATES DEVELOPMENT STRATEGY DISCOUNT RATE EXPENDITURE EXPORT CROPS EXPORTS EXTERNALITIES EXTREME POVERTY FAO FARM FARMER FARMER INCOMES FARMERS FARMING FARMS FERMENTATION FIXED PRICES FOOD CROPS FOOD INDUSTRY FREE MARKET GDP GOVERNMENT REGULATION HARVESTING HARVESTS INCOME INEFFICIENCY INVENTORIES LIQUIDITY MARGINAL PRODUCT MARKET CONDITIONS MARKET FAILURE MARKET FAILURES MARKET INCENTIVES MARKET POWER MARKET PRICE MARKET REFORMS MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MOLD MONOPOLY MONOPOLY RENTS NATIONAL INCOME NATURAL RESOURCES OVERVALUATION PEANUTS PEPPER PLANTATIONS PRICE CHANGE PRICE CHANGES PRICE CONTROLS PRICE INCENTIVES PRICE INDEX PRICE POLICY PRICE VARIATION PRICE VOLATILITY PRODUCE PRODUCER ORGANIZATION PRODUCER PRICE PRODUCER PRICES PRUNING SALES SEEDS SHARECROPPING STATISTICAL ANALYSIS STOCKS SUB-SAHARAN AFRICA SUBSTITUTE SUBSTITUTES SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGAR CANE SUPPLIER SUPPLIERS TAXATION TILLING TOBACCO TRADE REFORMS TREES TROPICAL CROPS TYING VANILLA WORLD MARKET WTO YIELDS This paper explores how the elimination of Madagascar's Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between freight on board (FOB) and farmgate prices have spectacularly narrowed down, but this effect is dwarfed by that of world-price volatility. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited competition there is among them has contributed to raise purchase prices and the cash income of vanilla farmers. But the effect on farmers' consumption remains small because a large part of it is self-consumed. The effect on aggregate measures of poverty and inequality is even smaller, even at the regional level. After taking into account the reduction in Madagascar's monopoly power on the world vanilla market implied by the elimination of the Marketing Board, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty. 2012-06-18T21:48:35Z 2012-06-18T21:48:35Z 2006-08 http://documents.worldbank.org/curated/en/2006/08/6962156/elimination-madagascars-vanilla-marketing-board-ten-years http://hdl.handle.net/10986/8374 English Policy Research Working Paper; No. 3979 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Madagascar
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGRICULTURAL ACTIVITIES AGRICULTURAL HOUSEHOLDS AGRICULTURE ASYMMETRIC INFORMATION BEANS CAPITAL MARKETS CARTEL CASH CROPS CASHEW NUTS CLIMATIC CONDITIONS CLOVES COCOA COFFEE COFFEE PRICES COLLUSION COMMODITY CONTESTABILITY COTTON COURNOT COMPETITION CROP CROP HUSBANDRY CROPLAND CULTIVATION CURING DATES DEVELOPMENT STRATEGY DISCOUNT RATE EXPENDITURE EXPORT CROPS EXPORTS EXTERNALITIES EXTREME POVERTY FAO FARM FARMER FARMER INCOMES FARMERS FARMING FARMS FERMENTATION FIXED PRICES FOOD CROPS FOOD INDUSTRY FREE MARKET GDP GOVERNMENT REGULATION HARVESTING HARVESTS INCOME INEFFICIENCY INVENTORIES LIQUIDITY MARGINAL PRODUCT MARKET CONDITIONS MARKET FAILURE MARKET FAILURES MARKET INCENTIVES MARKET POWER MARKET PRICE MARKET REFORMS MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MOLD MONOPOLY MONOPOLY RENTS NATIONAL INCOME NATURAL RESOURCES OVERVALUATION PEANUTS PEPPER PLANTATIONS PRICE CHANGE PRICE CHANGES PRICE CONTROLS PRICE INCENTIVES PRICE INDEX PRICE POLICY PRICE VARIATION PRICE VOLATILITY PRODUCE PRODUCER ORGANIZATION PRODUCER PRICE PRODUCER PRICES PRUNING SALES SEEDS SHARECROPPING STATISTICAL ANALYSIS STOCKS SUB-SAHARAN AFRICA SUBSTITUTE SUBSTITUTES SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGAR CANE SUPPLIER SUPPLIERS TAXATION TILLING TOBACCO TRADE REFORMS TREES TROPICAL CROPS TYING VANILLA WORLD MARKET WTO YIELDS
spellingShingle	AGRICULTURAL ACTIVITIES AGRICULTURAL HOUSEHOLDS AGRICULTURE ASYMMETRIC INFORMATION BEANS CAPITAL MARKETS CARTEL CASH CROPS CASHEW NUTS CLIMATIC CONDITIONS CLOVES COCOA COFFEE COFFEE PRICES COLLUSION COMMODITY CONTESTABILITY COTTON COURNOT COMPETITION CROP CROP HUSBANDRY CROPLAND CULTIVATION CURING DATES DEVELOPMENT STRATEGY DISCOUNT RATE EXPENDITURE EXPORT CROPS EXPORTS EXTERNALITIES EXTREME POVERTY FAO FARM FARMER FARMER INCOMES FARMERS FARMING FARMS FERMENTATION FIXED PRICES FOOD CROPS FOOD INDUSTRY FREE MARKET GDP GOVERNMENT REGULATION HARVESTING HARVESTS INCOME INEFFICIENCY INVENTORIES LIQUIDITY MARGINAL PRODUCT MARKET CONDITIONS MARKET FAILURE MARKET FAILURES MARKET INCENTIVES MARKET POWER MARKET PRICE MARKET REFORMS MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MOLD MONOPOLY MONOPOLY RENTS NATIONAL INCOME NATURAL RESOURCES OVERVALUATION PEANUTS PEPPER PLANTATIONS PRICE CHANGE PRICE CHANGES PRICE CONTROLS PRICE INCENTIVES PRICE INDEX PRICE POLICY PRICE VARIATION PRICE VOLATILITY PRODUCE PRODUCER ORGANIZATION PRODUCER PRICE PRODUCER PRICES PRUNING SALES SEEDS SHARECROPPING STATISTICAL ANALYSIS STOCKS SUB-SAHARAN AFRICA SUBSTITUTE SUBSTITUTES SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGAR CANE SUPPLIER SUPPLIERS TAXATION TILLING TOBACCO TRADE REFORMS TREES TROPICAL CROPS TYING VANILLA WORLD MARKET WTO YIELDS Cadot, Olivier Dutoit, Laure de Melo, Jaime The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
geographic_facet	Africa Madagascar
relation	Policy Research Working Paper; No. 3979
description	This paper explores how the elimination of Madagascar's Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between freight on board (FOB) and farmgate prices have spectacularly narrowed down, but this effect is dwarfed by that of world-price volatility. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited competition there is among them has contributed to raise purchase prices and the cash income of vanilla farmers. But the effect on farmers' consumption remains small because a large part of it is self-consumed. The effect on aggregate measures of poverty and inequality is even smaller, even at the regional level. After taking into account the reduction in Madagascar's monopoly power on the world vanilla market implied by the elimination of the Marketing Board, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty.
format	Publications & Research :: Policy Research Working Paper
author	Cadot, Olivier Dutoit, Laure de Melo, Jaime
author_facet	Cadot, Olivier Dutoit, Laure de Melo, Jaime
author_sort	Cadot, Olivier
title	The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
title_short	The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
title_full	The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
title_fullStr	The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
title_full_unstemmed	The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On
title_sort	elimination of madagascar’s vanilla marketing board, ten years on
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/08/6962156/elimination-madagascars-vanilla-marketing-board-ten-years http://hdl.handle.net/10986/8374
_version_	1764406350926839808

The Elimination of Madagascar’s Vanilla Marketing Board, Ten Years On

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