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Abstract

In Dhaka, the capital of Bangladesh—one of the poorest countries in Asia, where rice accounts for almost 70 percent of consumers’ caloric intake—the share of the less expensive coarse rice is shown to be rapidly decreasing in rice markets and the quality premium for the fine rice has been consistently on the rise in the last decades. It thus seems that the role of rice as only a cheap staple food is being redefined. The increasing demand for the more expensive varieties is seemingly associated with a more important off-farm food sector—in particular, milling, retailing, and branding—as well as a transformed milling industry. We further find that the labor rewards for growing different rice varieties are not significantly different and that farmers do not benefit directly from consumers’ increased willingness to pay for rice.

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