Agricultural Markets in Benin and Malawi: The Operation and Performance of Traders

Abstract

Based on original trader surveys, this paper examines how agricultural traders operate in Benin and Malawi. Results indicate that the largest transaction costs are search and transport. The use of modern technology is limited. Search methods rely principally on personal visits by the trader, and quality control requires the presence of the trader at the time of purchase. This increases costs, as the trader has to travel a lot, and makes it difficult for trading enterprises to grow. Since enterprises remain very small, personal transport and search time represent a non-negligible share of marketing costs.