Abstract
In sub-Saharan Africa, agricultural reforms such as market liberalization and loan schemes greatly affect the agricultural and industrial sectors. The withdrawal of government institutions and adoption of structural adjustment programmes (SAP) have not always been a win-win situation for the different stakeholders of the agricultural sector. This paper assesses the influence of market liberalization on the groundnut sector in Senegal. Using market variables including production, marketing and trade, it analyzes the market performance of groundnuts before and after market liberalization in 2010. The coefficient of variation and the corrected coefficient of variation for producer prices were applied and the results show that the values for both coefficient of variation and corrected coefficient of variation were higher in the pre-liberalization period. There was less volatility after market liberalization and prices were much higher in the post-liberalization period. Market liberalization has generally favoured farmers whereas it has been bad for local processing industries. It is necessary for the government to provide alternative policy interventions to achieve inclusive welfare from market liberalization.
Highlights
Agriculture plays an important role in the economic growth of many developing countries where it contributes towards food security, job creation, provision of raw material, and trade
In order to determine how to mitigate the negative effects of groundnut market liberalization, this paper examines issues related to the approaches and effects of agricultural market reforms in Senegal
This study examined the market liberalization in Senegal and how it influences the groundnut sector especially farmers and processing industries
Summary
Agriculture plays an important role in the economic growth of many developing countries where it contributes towards food security, job creation, provision of raw material, and trade. Agricultural reforms which mainly advocate for market liberalization and withdrawal of government institutions have been the topic of several controversial debates These debates have resulted from the inconsistency observed in the impacts of SAP and their differential implementation per country [1, 3]. Market reform and market liberalization often involve the process of reducing government regulations and restrictions in a market in exchange for greater private sector participation as well as encourage long-term market efficiency and economic development [4,5,6]. This is because, liberalized markets are free from direct and physical controls imposed by governments. While some countries such as Senegal implemented market liberalization according to SAP, many others reversed the proposed SAP measures [7,8]
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