Influence of interlocked transactions on gum arabic production and marketing in Senegal

Abstract

Interlocked relationships are characterised by traders’ supply of inputs and cash to producers on credit, to be reimbursed at sale time based on a pre-defined price which is often lower than the prevailing market price. The study analyses determinants of choice of interlocking in the gum sector in Senegal and the effect of interlocking on market participation and gum production. Data from 422 gum producers in Northern and Eastern regions of Senegal are used. About 41% of respondents are involved into interlocking with village shop-owners or mobile traders. Interlocking positively influences market participation and production as found through a Heckman selection model.Marketing,