Reforming agricultural markets in Africa

"Since the early 1980s, almost all African governments have embarked on economic reform programs to reduce state intervention in the economy and to allow markets to play a larger role. In the agricultural sector these programs were designed to eliminate price controls on agricultural commodities, disband or privatize state farms and state-owned enterprises, reduce the heavy taxation of agricultural exports, phase out subsidies on fertilizer and other inputs, and allow greater competition in agricultural markets. These measures have been highly controversial. Proponents argue that the reforms have improved market efficiency, reduced budget deficits, stimulated export production, and increased the share of the final price received by farmers. Opponents argue that the reforms have destabilized agricultural prices, widened the income distribution gap, and reduced access to low-cost inputs. Reforming Agricultural Markets in Africa by Mylène Kherallah, Christopher Delgado, Eleni Gabre-Madhin, Nicholas Minot, and Michael Johnson, published by The Johns Hopkins University Press for IFPRI, reviews the experience of the last 20 years. It evaluates the degree to which the reforms have actually been implemented, their impact on agricultural production and prices, and the net effect on the well-being of African households." Author's Introduction.

The road half traveled

This brief reviews the extensive evidence on agricultural market reforms in Sub-Saharan Africa and summarizes the impact reforms have had on market performance, agricultural production, use of modern inputs, and poverty. It offers eight recommendations for completing the reform process and developing a new agenda for agricultural markets in Sub-Saharan Africa.

The road half traveled

During the past two decades, most countries in Sub-Saharan Africa undertook extensive economic reforms to reduce the role of the government and increase the role of the market in their economies. Because of the importance of the agricultural sector in the region, agricultural market reforms occupied a central place in these liberalization efforts. Agricultural reforms included the removal of price controls, deregulation of agricultural marketing, closure of state-owned enterprises that monopolized agricultural trade, and changes in the foreign exchange market to provide greater incentives for exports. The expectation was that improving price incentives for farmers and reducing government intervention in the agricultural sector would be enough to generate a supply response and allow well-functioning markets to emerge quickly. Almost two decades later, the general consensus is that the reform programs in Sub-Saharan Africa have not met expectations. At the beginning of the 21st century, Sub-Saharan Africa confronts a number of daunting problems: extensive hunger, malnutrition, poverty, resource degradation, and the spread of AIDS. Because the majority of the region's population remains dependent on agriculture for its livelihood, well-functioning and efficient agricultural markets continue to be key to improving Sub-Saharan Africa's economic health. This report reviews the extensive evidence on agricultural market reforms in Sub-Saharan Africa and summarizes the impact reforms have had on market performance, agricultural production, use of modern inputs,and poverty. The report offers eight recommmendations for completing the reform process and developing a new agenda for agricultural markets in Sub-Saharan Africa.

Revisiting the 'Cotton Problem': A Comparative Analysis of Cotton Reforms in Sub-Saharan Africa

The cotton sector has been amongst the most regulated in Africa, and still is to a large extent in West and Central Africa (WCA), despite repeated refirm recommendations by international donors. On the other hand, orthodox refirms in East and Southern Africa (ESA) have not always yielded the expected results. This paper uses a stylised contracting model to investigate the link between market structure and equity and efficiency in sub-Saharan cotton sectors; explain the outcomes of refirms in ESA; and analyze the potential consequences of orthodox refirms in WCA. We argue that the level of the world price and of government intervention, the nature of pre-refirm institutional organisation, as well as the degree of parastatal inefficiency, all contribute to making refirms less attractive to firmers and governments in WCA today, as compared to ESA in the 1990s.We illustrate our arguments with empirical observations on the perfirmance of cotton sectors across sub-Saharan Africa

The transaction costs in biotechnology

This paper aims to relate the principles of Ronald Coase Theorem with negative impacts of biotechnology, taking cases of specific research groups and medium-sized companies in biotechnology. We consider an application of economic theory on transaction costs (TTC) provides a good foundation for understanding the underlying problems of this sector, even more, when analyzing the political economy of biotechnology since the transaction costs can best viewed their limitations and the limited scope of government policy. In biotechnology it is possible to get a policy that combines both equity and efficiency, that is, a wider range of policy applications to improve the living standards of people in Colombia