Wealth distribution, peasant production and poverty traps in African smallholder agriculture

A model is developed for peasant households in land abundant areas who choose between two technologies for land preparation: a manual one and one using draught animals. For draught a minimum number of animals is required so that a technological non convexity exists. It follows that certain households are poverty trapped, that the initial distribution of wealth fully determines aggregate production and that wealth redistribution is equity and efficiency enhancing.Empirical evidence for Zimbabwe is presented to support the model’s stylised facts, the technology described and the model’s prediction with respect to the distribution of wealth. It is shown that collaboration between farmers is an alternative to wealth redistribution.