Maize Market Research Articles

Maize market reform in Zimbabwe

A major constraint on the design and implementation of grain market liberalization throughout the world is governments' concerns with retaining enough influence over the evolving system to distribute prices and incomes to various groups in politically desired ways. This article considers the effects of alternative forms of maize market reform on various socioeconomic groups and the marketing board's operations in Zimbabwe. Based on results of a dual-market, spatial equilibrium model, partial and more complete reform create substantially different distributional effects. However, urban consumers and many rural small-holders would be better off with either consumers and many rural small-holders would be better off with either configuration of market reform consi-prices. The full benefits of market reform require active government support for the development of private trade.

Maize milling, market reform and urban food security: The case of Zimbabwe

Government policy in much of Eastern and Southern Africa has encouraged the development of highly centralized, large-scale milling facilities, which has in turn promoted the consumption of highly refined and expensive maize meal compared to that produced by small-scale hammer mills. Policies to develop competitive small-scale milling facilities in urban areas are apparently neglected because of the conventional perception in Eastern and Southern Africa that urban consumers strongly prefer the refined, industrially milled meals, and are not responsive to price differences between various types of maize meals. Results of consumer and miller surveys in Zimbabwe call into question the validity of these perceptions. Simulation analysis also indicates that the elimination of policy constraints that block small-scale millers' access to grain would reduce overall marketing costs, thereby allowing higher producer prices, lower consumer prices and/or lower government subsidies. The case of Zimbabwe suggests that market reform may considerably reduce the magnitude of the tradeoff between governments' food security and budget minimization objectives.

Trading responses to food market liberalization in Tanzania

Trading has been the only marketing function in Tanzania to shift rapidly and efficiently from parastatal institutions to private institutions. Private traders have made a major contribution to the movement of maize from producing areas (including, to some extent, remote surplus areas) to urban consumer centres and to consumer price stabilization. Traders, however, do not keep interseasonal stocks and do not own means of transport. There are very few or no barriers to entering the maize market, but there is evidence of barriers to expansion above certain business levels. Larger traders may benefit from economies of scale in the form of lower transport costs and lower purchasing prices. This article identifies the following as primary factors in accelerating the development of private trading: the development of marketplaces and storage structures, access to credit facilities for both traders and transporters, and long-term infrastructural policies to reduce transport costs.

Marketing maize and tef in western Ethiopia: Implications for policies following market liberalization

Ethiopia has recently eliminated fixed grain prices and has reduced its role in purchasing grain from farmers. Results indicate that private sector marketing of maize and tef is characterized by high risks and variable gross margins. Returns from storing grain for later sale can be high but predicting price movements is risky. Interspatial arbitrage is seriously flawed; correlations in prices between markets range from weak to strong. The government's restriction of the movement of grain and market interventions during the survey period are partly responsible for these trends. Proposed measures to improve marketing performance include (1) improving feeder roads, (2) providing credit to traders and transporters, (3) improving farm-level maize storage facilities, and (4) permitting markets in an area to be held on different days of the week.

Empirical testing of alternative price spread models in the South African maize market

ABSTRACTReduced‐form price spread models have been recently utilized by Wohlgenant and Mullen, and Thompson and Lyon to evaluate the economic factors affecting the marketing margins for agricultural products. Drawing on Gardner, Heien, Buse and Brandow, Waugh, Tomek and Robinson, and others they specify alternative retail‐farm price spread models and attempt to determine which best fit the data in the context of underlying theoretical rationale.This paper continues in the spirit of Wohlgenant and Mullen, and Thompson and Lyon by evaluating alternative specifications of the retail‐farm price spread for white maize in South Africa. However, several important differences do remain. Wohlgenant and Mullen analyzed the price spread for beef using annual data, while Thompson and Lyon modeled the price spread for oranges using weekly data. The time period under consideration can be expected to affect the choice of model because fixed markup rules that might be evident using a short‐run period of analysis (e.g., Thompson and Lyon) become untenable over the long run with underlying supply and demand shifts. In this paper, monthly data, which may be interpreted as an intermediate‐run period, are used along with dichotomous supply‐demand shifters. In addition, Brorsen et. al. have shown that price uncertainty affects the price spread in the marketing channels of agricultural commodities. Thus, the analysis in this paper extends the framework of Wohlgenant and Mullen, and Thompson and Lyon to include measures of price risk. Finally, like Brorsen et. al. this study pertains to the grain market, while Wohlgenant and Mullen, and Thompson and Lyon studied the marketing margin for non‐storable commodities.

Empirical testing of alternative price spread models in the South African maize market

Abstract Reduced-form price spread models have been recently utilized by Wohlgenant and Mullen, and Thompson and Lyon to evaluate the economic factors affecting the marketing margins for agricultural products. Drawing on Gardner, Heien, Buse and Brandow, Waugh, Tomek and Robinson, and others they specify alternative retail-farm price spread models and attempt to determine which best fit the data in the context of underlying theoretical rationale. This paper continues in the spirit of Wohlgenant and Mullen, and Thompson and Lyon by evaluating alternative specifications of the retail-farm price spread for white maize in South Africa. However, several important differences do remain. Wohlgenant and Mullen analyzed the price spread for beef using annual data, while Thompson and Lyon modeled the price spread for oranges using weekly data. The time period under consideration can be expected to affect the choice of model because fixed markup rules that might be evident using a short-run period of analysis (e.g., Thompson and Lyon) become untenable over the long run with underlying supply and demand shifts. In this paper, monthly data, which may be interpreted as an intermediate-run period, are used along with dichotomous supply-demand shifters. In addition, Brorsen et. al. have shown that price uncertainty affects the price spread in the marketing channels of agricultural commodities. Thus, the analysis in this paper extends the framework of Wohlgenant and Mullen, and Thompson and Lyon to include measures of price risk. Finally, like Brorsen et. al. this study pertains to the grain market, while Wohlgenant and Mullen, and Thompson and Lyon studied the marketing margin for non-storable commodities.

Reform of one‐channel marketing systems: Expanding the debate and agenda for research

The recent exchange between Groenewald and Brand on the report tabled by the Committee of Inquiry into maize marketing arrangements makes for interesting reading. Professor Groenewald raises a wide...

AN ECONOMIC ANALYSIS OF BEEF STOCKING RATES / 'n EKONOMIESE ANALISE VAN VLEISBEES WEIBELADINGS

ABSTRACT The Land Conversion Scheme and the prevailing maize and meat market situations have given rise to renewed interest in livestock production from cultivated pasture. The model developed by Jones and Sandland (1974) is used to determine optimum stocking rates under various circumstances. A micro-computer model, OPTSR, is developed for relatively quick solutions.

The economics of triangular food aid transactions

It has been shown that triangular food aid transactions (TFATs) could create, in certain circumstances, price Increases on world food markets. Two typical cases have been identified: the price-inelastic Zimbabwe white maize market — where such price effects are likely — and the price-elastic Thai rice case — where they are unlikely. In the Zimbabwe case, and to a lesser extent in the Thai case, TFATs are an inefficient way of transferring resources to developing countries. However, TFATs can become efficient if the additional benefits in terms of cost-effectiveness and timeliness outweigh the resource transfer losses. If the transfer of resources to the supplier leads to a real increase in food supply, this could also offset the negative effects of the switch from bilateral to triangular transactions.

Malnutrition, household income and food security in rural Malawi

Despite gains made in national maize production and surplus crops Malawi has faced shortages even during years of good harvest as evidenced by widespread household food insecurity child malnutrition and mortality. In 1977 nationally about 1/3 of all children died before the age of 5. Infant mortality rates ranged from a low of 137/1000 live births to a high of 233/1000. Agricultural production has benefitted only those farmers with land and resources. A conceptual framework examined this problem at the level of the individual child at the household level and the national level. The immediate causes of child malnutrition were identified as feeding patterns (very low calorie intake results in stunted growth) child disease (debilitating disease like malaria rose over 300% from 1980 to 1988 among children under 1 year old) and child care practices (70% of women are full-time farmers with little time for food preparation). Maternal nutritional status is poor thus nearly 20% of children are born with low birth weight. Seasonality affects food supply and nutrition as 35% of children may be underweight in the pre-harvest period. The underlying causes of household food insecurity are: small landholdings (during 1980-81 37% of households cultivated less than 0.7 hectare) low soil fertility low income levels and limited employment and labor constraints in agricultural production. The basic causes of poor household and nutritional security are: agricultural resource base and environmental factors limited external aid rapid population growth (at 3.2% per year) the national economy and the governing policies and the international economic order. Various macroeconomic policy initiatives could have a significant impact on these small plots e.g. active promotion of hybrid maize increased producer prices and liberalization of maize marketing. Policy options that could increase food security constitute more focus on women in agricultural development agricultural research immediate income transfer programs high value cash crops nonfarm income labor-saving devices and nutrition education.

Review of the report of the Committee of Enquiry into alternative marketing arrangements for maize

Problems in the maize industry induced the Minister of Agriculture to appoint a Committee of Enquiry into maize marketing arrangements. Maize and winter grains are marketed under one‐channel fixed price schemes operated by the Maize and Wheat Boards, which are statutory monopolies. Floor prices are used in sorghum marketing. The Committee recommends retention of one‐channel marketing for all grains, operating under a single selling organization. It also recommends the creation of a grain floor where buyers can negotiate with the sole selling agency, which will also control exports and imports. The proposals amount to further monopolization in grain marketing. It is argued that these proposals will induce greater inefficiency in the grain sector; the important problems will not be solved. The Committee gives attention to neither food problems of the poorer part of the population nor production problems nor cross‐subsidiation. Long— term market effects are not sufficiently addressed; nor are international d...

Agricultural marketing and socialist accumulation: A case study of maize marketing in Mozambique

This article analyses maize marketing and its implications for producers, traders and consumers in one area of Mozambique before and after Independence. On the basis of this case, it discusses some of the policy problems encountered by the Mozambican government between 1977 and 1983 in planning agricultural marketing in the context of the wider objective of socialist transformation and development of agriculture.

An improved maize marketing system for African countries: The case of Zimbabwe

Access to food is essential to survival, and access to markets is essential for development. Most parastatal marketing systems in Africa have failed either to provide adequate links between surplus and deficit areas, or to extend markets to scattered smallholders, or both. The parastatal system does provide a legitimate need, but it has been frequently misapplied. This article proposes a system for Zimbabwe which retains government control of national stocks and enables the parastatal to stabilize prices, at the same time ensuring a more rational delivery system in rural areas with prices reflecting storage and transport costs. The local population is encouraged to fulfill local needs, thus avoiding the expense of directing all marketing and processing through the urban areas. A more localized system will also have greater multiplier effects.