Economies of scope and the cash crop–food crop debate in Senegal

The government of Senegal plans to achieve national food self-sufficiency by inducing farmers to switch away from cash crops toward food-crop production. This paper examines selected economic consequences of the planned substitution using empirical data recently collected in south-eastern Senegal. Cost function estimates suggest that farmers are currently producing ‘too much’ food-crop and ‘too little’ cash-crop output, given existing technology and observed relative prices. Moreover, economies of scope in producing both food crops and cash crops on the same farm result in a 22% cost saving relative to growing both types of crops on separate, specialized farms.