Contents
      •  Agricultural commercialization conceptual framework
      •  Agricultural household models before and after 1985
          –  Separable vs Non-Separable household models
      •  Household modeling exercises
      •  Conclusions
      •  Resources
             Agricultural Commercialization
                  Conceptual Framework
       Food and cash    -      Food      =     Marketed 
       crop production        demand            surplus
                  Agricultural Commercialization
                         Conceptual Framework
       Labor, mgt   Weather               Preferences
      Land               Inputs    Population      Income
         Food and cash            -         Food          =        Marketed 
         crop production                  demand                    surplus
                         Food prices
           Infrastructure and           International 
           market efficiency           markets & trade
     Agricultural household models – Before 1985
     •  “Separable household models”
          – Maximize household income
          – Allocate income among consumption goods to maximize utility
     •  “Separable” in that production decisions are not affected 
        by consumption decisions 
     •  Marketed surplus is difference between optimal quantity 
        of production and optimal quantity of consumption
          – They could only be equal by coincidence so this should only 
            occur rarely
        Agricultural household models – Before 1985
             Model doesn’t explain several important patterns
        Prediction of separable model           Patterns in developing countries
    Farmers specialize in few commodities    Many farms are diversified, producing 
    according to comparative advantage       many food and cash crops
    Farmers allocate most land to            Small share of land allocated to cash 
    commercial crops                         crop production
    Farmers either buy or sell each crop     Many household grow and consume 
    (only rarely does optimal production =   staple crops, without buying or selling
    optimal consumption)