Trade, Standards, and Poverty: Evidence from Senegal

SummaryIn the debate on trade and poverty it is argued that standards act as trade barriers and cause marginalization of the poor. This paper quantifies income and poverty effects of high-standards trade and integrates labor market effects, by using company and household survey data from the vegetable export chain in Senegal. We find that exports grew sharply despite increasing standards, contributing importantly to rural incomes and poverty reduction. Tightening standards induced a shift from smallholder contract farming to integrated estate production, altering the mechanism through which poor households benefit: through labor markets instead of product markets.