Journal of Forest Economics > Vol 21 > Issue 3

Market-driven production with transaction costs outlook: Gum arabic collection systems in Senegal

G. Mujawamariya, Africa Rice Center (AfricaRice), Tanzania, G.Mujawamariya@cgiar.org K. Burger, Development Economics Group, Wageningen University, The Netherlands, M. D’Haese, Department of Agricultural Economics, Ghent University, Belgium,
 
Suggested Citation
G. Mujawamariya, K. Burger and M. D’Haese (2015), "Market-driven production with transaction costs outlook: Gum arabic collection systems in Senegal", Journal of Forest Economics: Vol. 21: No. 3, pp 111-130. http://dx.doi.org/10.1016/j.jfe.2015.05.001

Published: 0/8/2015
© 0 2015 G. Mujawamariya, K. Burger, M. D’Haese
 
Subjects
 
Keywords
JEL Codes:D24Q12Q13Q23
Transaction costsMarket-led productionAlternative-specific probit modelSemi-arid landsGum arabic
 

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In this article:
Introduction
Gum arabic production and marketing in Senegal
Methodology
Results
Discussion
Conclusion and implications

Abstract

Low returns from marketing of non-timber forest products such as gum arabic restrict the collection of these products. A hypothesis is tested that access to good markets motivates collectors to harvest and market gum arabic. Analyses of the choice of participation in group marketing, sale price, quantity of gum collected and the final choice of market outlet are done. Decision outcomes include fixed transaction costs at the collection stage and proportional costs at the marketing stage. Original data from 348 gum collectors in the Sylvopastoral zone and Eastern region of Senegal were used. Results confirm the stated hypothesis; indeed the marketing context and outcome play a big role in collection systems of gum arabic in Senegal. The costs incurred in finding the good market can be regarded as an investment, whereby the collector may continue to transact with the same trading partner (and hence in the same market). The need for infrastructural development, strengthening groups and market expansion are emphasised as key policy interventions.

DOI:10.1016/j.jfe.2015.05.001