The Implementation and Results of IMF/World Bank-Supported Agricultural Reforms: The Case of Sudan's Gezira Scheme

Abstract

The Sudanese economy is a textbook example of a monoculture economy, in view of its primary dependence on cotton. The crop is the country's principal foreign exchange earner. Sudan's external payments crises have always been associated with crises in cotton production and/or exports. This is particularly the case in the late 1970s and early 1980s when the Sudan experienced acute balance of payments or foreign exchange crises. Those crises were associated with a precipitous decline in cotton yields and production.1 As Table 1 shows, yields and output experienced a steady decline that became particularly pronounced in 1979/80 and 1980/81. The fall in the crop's output had a negative impact on export volumes and earnings, though decline in export prices also seems to have some adverse effect on earnings. Since cotton was, and still is, the country's principal foreign exchange earner, the decline in exports coupled with a rise in Sudan's oil import bill in the mid and late 1970s and early 1980s led to unprecedented current account deficits. Most of Sudan's cotton (more than 80 percent) is produced in the Gezira Scheme, a public irrigation scheme set up early in this century. The parastatali cotton yields declined precipitously in the late 1970s and early 1980s. This was attributed to the inefficiency of its financial and production relationships which had created a structure of incentives against cotton cultivation. In the early 1980s, the Government of Sudan implemented marketoriented reforms, supported by the World Bank and the International Monetary Fund, in the agricultural parastatali financial and production relationships to reverse