Vulnerable Places, Vulnerable People

Vulnerable Places, Vulnerable People

Trade Liberalization, Rural Poverty and the Environment

Edited by Jonathan A. Cook, Owen Cylke, Donald F. Larson, John D. Nash and Pamela Stedman-Edwards

While some argue that trade liberalization has raised incomes and led to environmental protection in developing countries, others claim that it generates neither poverty reduction nor sustainability. The detailed case studies in this book demonstrate that neither interpretation is universally correct, given how much depends on specific policies and institutions that determine ‘on-the-ground’ outcomes. Drawing on research from six countries around the developing world, the book also presents the unique perspectives of researchers at both the world’s largest development organization (The World Bank) and the world’s largest conservation organization (World Wildlife Fund) on the debate over trade liberalization and its effects on poverty and the environment.

Chapter 5: Trade Liberalization, Rural Poverty and the Environment: Two Studies of Agricultural Exports in Madagascar

Bart Minten, Philippe Méral, Lalaina Randrianarison and Johan Swinnen

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics, environmental geography


Bart Minten, with Philippe Méral, Lalaina Randrianarison and Johan Swinnen While Madagascar is one of the poorest countries in sub-Saharan Africa, it is also one of the world’s richest in biodiversity. The predominantly rural population relies heavily on the natural resources that also support the island’s remarkable diversity of species. Madagascar has drawn international attention in recent years because of its environmental assets, and substantial investments have slowed environmental degradation. Liberalization of the Malagasy economy began in the 1980s and has led to a rapid increase in both imports and exports over the last 20 years. But the growth of trade has had little impact on economic opportunities for Madagascar’s rural population, and rural exports on the whole have declined (Cadot et al., 2005; Moser et al., 2005). Rural poverty still runs above 77 percent, despite the economic reforms. This aggregate picture, however, conceals the fact that new international trade opportunities have had dramatic impacts for some rural people and places. This study looks at two cases where changing trade rules have had important effects on poverty and the environment. First, we look at the rapid expansion of maize production in southwest Madagascar, a case that illustrates the contribution of trade to agricultural land extensification and deforestation and its links to changing environmental mores. Second, we look at contract farming of high-value vegetables, which illustrates the opportunities trade can afford the poor and the contribution the private sector can make to sustainable agriculture through intensification. To carry out these...

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