Imperfect Markets: a Case Study in Senegal

Abstract

Farmers in developing countries are confronted with imperfect markets. This has an impact on their production activities. When implementing developing projects these market imperfections should be taken into account. This paper is an attempt to discuss the impact of imperfect markets in the context of an irrigation project in village Pata, Senegal. The first section models the production decision of the agricultural household. The second section presents the irrigation project in Pata. The third section tests for the presence of imperfections in the credit and labour markets of Pata. I conclude by discussing the implications for the project.