@article{Kinkpe:333311,
      recid = {333311},
      author = {Kinkpe, Thierry and Luckmann, Jonas and Grethe, Harald},
      title = {Improving livelihoods in agriculture-based economies  through processing sector development: A CGE analysis on  Benin},
      address = {2021},
      year = {2021},
      note = {Presented during the 24th Annual Conference on Global  Economic Analysis (Virtual Conference)},
      abstract = {Most of the agriculture-based economies in Africa are  exporting raw materials to developed economies while in  return an important share of processed food is imported. In  many African countries, the investment level in agriculture  is low. It has been proven that increasing agricultural  production without ensuring development of the value chain  (processing, trade) may end-up in welfare loss for farmers  as often farm-gate prices decrease more than production  costs (technological treadmill). However, until now there,  little research has been conducted on the economy-wide  effects of value chain development. This paper aims at  contributing to fill this gap in the literature by  analyzing the effect of the development of the food  processing sector along with agricultural productivity  gains on agricultural prices and welfare in an  agriculture-based economy, taking the example of Benin,  West Africa. A comprehensive Social Accounting Matrix (SAM)  was developed for Benin for the year 2019 and applied to a  static computable general equilibrium model. Increasing  food processing has positive effects for the economy as a  whole as it generates additional demand for agricultural  products and thereby results in increased returns to land,  unskilled (agricultural) labor and capital. The additional  value added through processing resulted in an increase in  GDP and higher income as well as total welfare for rural  and urban households. The processing boosting policies are  pro-poor.},
      url = {http://ageconsearch.umn.edu/record/333311},
}