Food marketing and pricing policy in Eastern and Southern Africa: A survey

Abstract

This article surveys the empirical record of grain marketing and pricing policy in Eastern and Southern Africa over 1930–1995. The paper addresses five key issues with major implications for food policy throughout Africa: (a) why the anticipated supply response to market liberalization has not yet occurred; (b) why the common assumption of state taxation of farmers to support a cheap food policy does not apply in most of the countries in the region; (c) why the temporary successes of the state-led approach to stimulating smallholder grain production were unsustainable; (d) why the elimination of government food subsidies associated with market reform has not adversely affected consumers; and (e) why the fiscal cost of the marketing systems at least initially worsened rather than improved after the reforms were implemented in most countries. The key future challenges for marketing policy are how to develop coordinated and financially sustainable input, finance and commodity marketing systems for raising productivity growth in smallholder agriculture while overcoming inherited agricultural dualism, and how to mitigate the effects of food price instability in a cost-effective manner.