Using detailed trader surveys in Benin, Madagascar, and Malawi, this paper investigates the presence of increasing returns in agricultural trade. After analyzing margins, costs, and value added, we find little evidence of returns to scale.

Most countries in sub-Saharan Africa have reduced or eliminated fertilizer subsidies and liberalized input marketing as part of the reform process that began in the early 1980s.

The paper analyzes the welfare impacts of alternative sequencing scenarios of agricultural market reforms in Malawi using a profit maximization approach.