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Why is smallholder market participation so important to economic growth and poverty reduction? The answer traces its origins at least to Adam Smith and David Ricardo: given a household’s desire for a diverse consumption bundle, it can either undertake production of all such goods and services for autoconsumption, or it can specialize in production of those goods in which it is relatively skilled, consuming some portion and trading the surplus for other goods and services it desires but for which it holds no comparative advantage in production. The welfare gains that result from choosing market-oriented production and exchange emerge not just from the one-off, static welfare effects of trade according to comparative advantage, but perhaps even more from the opportunities that emerge from larger-scale production in the presence of nontrivial fixed or sunk costs of production (Romer, 1994) and from dynamic …