Agricultural Prices and Income Distribution among Farmers: A Whole-Household, Multi-Country, Multi-Year Analysis
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Recent studies have emphasized that the poorest farmers are often net buyers of
key commodities and therefore harmed by rising prices. We use LSMS data from
Tanzania, Vietnam and Guatemala to test the degree of net purchases or sales by
income level. We find that poorer farmers may be net buyers of individual crops,
but only the poorest are net buyers of all crops. More generally, net sales among
poor farmers are low. We conclude that agricultural price changes have a diverse
but limited influence on poor farmers’ welfare, because their farm sales tend to be
offset by food purchases.