Changing food prices and rural welfare: a nonparametric examination of the Cote d'Ivoire

This article examines how rural households vary across the income distribution, especially with respect to food crops. Net food sales as a percentage of total expenditure do not seem to be of any consequence at any level of welfare. A large majority of households sell some type of food, but the magnitudes are such that very little quantity is sold. Income elasticities with respect to prices are small. The small magnitude of sales suggests agricultural households in the Cote d'Ivoire grow crops to consume and only sell the surplus when the harvest is especially good. This is further supported by the diversification observed. The policy implication is that there is no clear-cut set of small price changes that could significantly increase the marketed surplus of food. This also means that structural adjustment policies can be pursued with the knowledge that poor households will not be devastated. A price increase does not necessarily benefit only large, well-off farms. -Author