We revisit a methodology to gauge the short-term effect of price changes on smallholder farmer's welfare that is popular amongst policy makers and academia. Realising that farmers face substantial seasonal price volatility over the course of an agricultural year, we pay particular attention to the timing of sales and purchases. In addition we depart from the implicit assumption that all farmers scattered across rural areas face the same prices when interacting with markets. Usingmaize marketing during the 2007-2008 agricultural season in a sample of smallholders in Tanzania as an illustration, we find that especially poor farmers face greater losses than what a standard analysis would suggest.We also relate ourmethodology to factors that are likely to affect potential benefits or costs frominter-temporal and spatial price dispersion, such as means of transport, access to price information and credit.
- Inter-temporal price variation
- Market participation
- Price changes
- Spatial price dispersion