Maize Market Research Articles

Creating scarcity from abundance: bumper harvests, high prices, and the role of state interventions in zambian maize markets

In 2012/13 Zambia experienced a significant spike in maize meal prices, which coincided with three consecutive years (2010 - 2012) of record maize surpluses. This seemingly paradoxical price spike occurred in the wake of a dramatic escalation of the Government’s Food Reserve Agency (FRA ) interventions in the market, with the FRA purchasing approximately 80% of the available surplus during these surplus production years. Using a case study approach, this article explores Zambia’s maize price spikes amidst years of bumper harvests. The study findings reveal that maize procurement and marketing behavior of the Government through the FRA contributed to major structural changes to the maize market: (1) A withdrawal from the market by commercial mills. By purchasing majority of the maize on the market, the FRA limited the need for commercial mills to access maize directly from the market. This reduced competition in the wholesaling sector and concentrated maize supply chain around the FRA; (2) Rationing of the FRA maize sold at subsidized prices to commercial mills. The FRA depots were unable to consistently meet the demand requirements of the commercial milling sector and as a result, some mills were prioritized in terms of receiving FRA maize. Mills that could not consistently access subsidized maize from the FRA were put at a comparative disadvantage; (3) Exit of the commercial farming sector from maize production. Between 2010 and 2013 commercial maize production in Zambia halved, from 300,000 to less than 150,000 metric tonnes. This was due t o the price uncertainty created by FRA subsidies to commercial mills, which are the traditional markets for commercial farmers, as well as significant increase in smallholder production; and (4) Squeezing the informal processing sector out of the market. B y procuring the majority of the available surplus and selling it at subsidized rates to a selected group of commercial mills, the informal market, including small- scale traders, retailers, and hammer mills, were limited in their ability to participate in the market. This in turn undermined the market channel most often used by poorer urban and rural households. These structural changes in the organization of Zambia’s maize market led to a decline in available maize supplies and reduced levels of private- sec tor competition making the market vulnerable to unanticipated demand shocks.

Context Matters—Using an Agent-Based Model to Investigate the Influence of Market Context on the Supply of Local Biomass for Anaerobic Digestion

Biogas plant managers often face difficulties in obtaining feedstock at stable and affordable prices. The context in which the biogas plant manager needs to purchase the feedstock could be important when the biomass is also used in valorization trajectories besides anaerobic digestion. Using a combination of qualitative research and agent-based modelling, we investigated the effect of market context on the purchase of local biomass for anaerobic digestion. This paper details the institutional arrangements of our case study, the silage maize market in Flanders and the results of a scenario analysis, simulating nine different market contexts. Silage maize is an interesting case study, as it is both used for feed by farmers and as an input in biogas plants. The results show that mainly the time of entry into the market explains the difficulties in obtaining a stable supply of silage maize to biogas plants. Furthermore, we found a silage maize price increase for farmers in competition with a biogas plant, especially in case of a silage maize deficit in the market. The different institutional arrangements used have no significant effect. Our findings may guide biogas plant managers in assessing and reducing the consequences of the establishment of a biogas plant, competing for local biomass resources.

Price transmission in hog and feed markets of China

There is an increasing demand for feed as the industrialization of hog production in China. Land scarcity limits China's ability to continue increasing its hog production without feed imports, particularly soybean, and the feed markets are increasingly integrated into the global market. This study performs an analysis of price transmission between the hog price in China and feed prices, specifically domestic maize price and international soybean price, from January 2000 to April 2014. We identified a long-term stable equilibrium relationship between the three markets. However, further analyses show that there is no significant Granger causality between hog and feed market, and the long-run equilibrium partially results from Granger causality between the international soybean market and domestic maize market. This suggests that the domestic hog market has been distorted by different policies. The results also indicate that the efficiency of price transmission is very low and it takes about 11 months to correct one-half of any long-run disequilibrium for the hog market in China. Therefore, to stabilize hog price in China, only market intervention to regulate the maize and soybean markets would be insufficient and comprehensive measures need to be taken into account such as hog production modernization, agricultural insurance, epidemic surveillance etc.

The Impact of Ethnic Violence in Kenya on Wheat and Maize Markets

We study the impact of post-election ethnic violence in Kenya on the wheat and maize market in Mombasa and find empirical evidence that for these food markets, there is no impact on prices following violence. Using a data set of a flour producing firm, we identify the degree of persistence in prices and quantities by means of techniques based on long memory and long range dependence. Prices are found to be highly persistent in both wheat and maize flour, with orders of integration which are around one or even above one. On the contrary, quantities, though also persistent, appear to be fractionally integrated, with orders of integration in the interval (0, 0.5) pointing towards stationarity, long memory and mean reverting behaviour. Violence is associated with an insignificant increase in prices of both products and a significant decrease in quantities. An external validity check on the impact of post-election ethnic violence on food prices in Nigeria yields consistent results.

Keine erhöhte Volatilität auf Agrarmärkten durch Optionshandel

Der Handel mit Optionen gewinnt auf volatileren Agrarmarkten zunehmend an Bedeutung. Nun stellt sich die Frage, ob der Optionshandel ein sinnvolles Instrument zur Risikoabsicherung von Landwirten und Landhandlern darstellt oder ob er vielmehr ein Treiber der Agrarpreisvolatilitat ist. Die Autoren schliesen aus okonometrischen Schatzungen am Beispiel des MATIF-Kornermaismarktes, dass der Optionshandel die Volatilitat nicht erhoht.

PROFITABILITY AND MARKETING EFFICIENCY OF MAIZE IN KWANDE LOCAL GOVERNMENT AREA OF BENUE STATE, NIGERIA

The paper presents profi tability and marketing effi - ciency of maize in Kwande Local Government Area of Benue State, Nigeria. Stratifi ed random sampling was used to select three hundred (300) maize marketers comprising producers (210), wholesalers (32) and retailers (58) in eight (8) major markets in the study area. Primary data were collected using structured questionnaires. Data were analyzed using descriptive statistics, marketing margin and marketing effi ciency. It was found that maize marketing in the study area was dominated by males (64.7%) and young people (55.0%) who are energetic enough to withstand the stress involved in the business. The marketing margin of an average maize marketer in the study area was N2,012.00 per 100kg and the percentage marketing margin was 37.2%. This showed that maize marketing in the study area was profi table and 100% retail price paid by the fi nal consumer resulted in farm-to-retail price spread or marketing margin of 37.2%. The marketing effi ciency (0.28) of mai ze in the study area indicated that the marketers were ineffi cient in maize business. It was recommended that government, non-governmental organizations and the rural populace should strive hard to improve the transportation network and the marketers should belong to marketing associations so that they can collectively access loans from rural banking institutions

Inter-Temporal and Spatial Price Dispersion Patterns and the Well-Being of Maize Producers in Southern Tanzania

We revisit a methodology to gauge the short-term effect of price changes on smallholder farmer’s welfare that is popular amongst policy makers and academia. Realising that farmers face substantial seasonal price volatility over the course of an agricultural year, we pay particular attention to the timing of sales and purchases. In addition we depart from the implicit assumption that all farmers scattered across rural areas face the same prices when interacting with markets. Using maize marketing during the 2007–2008agricultural season in a sample of smallholders in Tanzania asan illustration, we find that especially poor farmers face greater losses than what a standard analysis would suggest. We also relate our methodology to factors that are likely to affect potential benefits or costs from inter-temporal and spatial price dispersion, such as means of transport, access to price information and credit.

Can Crop Purchase Programs Reduce Poverty and Improve Welfare in Rural Communities? Evidence from the Food Reserve Agency in Zambia

The last decade has seen a resurgence of parastatal crop marketing institutions in sub-Saharan Africa, many of which cite improving food security and incomes as key goals. However, there is limited empirical evidence on the welfare effects of these programs. This article considers one such program, the Zambian Food Reserve Agency (FRA), which purchases maize from smallholder farmers at a pan-territorial price that typically exceeds maize market prices in surplus production areas. Using both fixed effects and an instrumental variables approach combined with correlated random effects, we estimate the effects of the FRA's maize marketing activities on smallholder farm household welfare. Results suggest that FRA activities have positive direct welfare effects on the small minority of smallholder households that are able to sell to it. However, the results also suggest negative indirect FRA effects, as higher levels of FRA activity in a district are associated with higher levels of poverty.

Conservation agriculture practices and participation in Manica and Tete Maize Markets, Mozambique

This paper analyses the marketing of maize and use of conservation agriculture practices (CAPs) by smallholder farmers in Mozambique. Specifically the factors associated with the likelihood households participate in maize markets as a vendor or buyer, and the subsequent quantity of maize transacted are examined. Of particular interest is the relationship between the adoption of CAPs practices and the likelihood a household sold or purchased maize and the quantity of maize exchanged. Use of CAPs may enhance the food security of smallholder farmers in this region. Households using CAPs were more likely to sell maize but less likely to purchase maize for household consumption. However, the overall quantity of maize transacted by CAPs adopters was not different from other households. Market transactions were more evenly distributed throughout the year for CAPs adopters as compared to other households whose transactions were concentrated during times when food was scarce.

Can Crop Purchase Programs Reduce Poverty and Improve Welfare in Rural Communities? Evidence from the Food Reserve Agency in Zambia

The last decade has seen a resurgence of parastatal crop marketing institutions in sub-Saharan Africa, many of which cite improving food security and incomes as key goals. However, there is limited empirical evidence on the welfare effects of these programs. This article considers one such program, the Zambian Food Reserve Agency (FRA), which purchases maize from smallholder farmers at a pan-territorial price that typically exceeds maize market prices in surplus production areas. Using both fixed effects and an instrumental variables approach combined with correlated random effects, we estimate the effects of the FRA's maize marketing activities on smallholder farm household welfare. Results suggest that FRA activities have positive direct welfare effects on the small minority of smallholder households that are able to sell to it. However, the results also suggest negative indirect FRA effects, as higher levels of FRA activity in a district are associated with higher levels of poverty.

Marketing system of maize in Gaibandha district of Bangladesh

The present study examined the marketing system of maize in Gaibandha district of Bangladesh. In the study area, farmer, Faria, 1 wholesaler, Aratdar 2 and feed mill were the market participants. Marketing of maize started from farmers and reached to the feed mills through different channels. Farmers did not take part in processing activities. Van 3 , Votvoti 4 , pick-up, truck and by-cycle were the common modes of transportation. Market information was collected through mobile phone, personal visit to the market, discussion with fellow farmers and traders. Price of maize was determined through the supply and demand situation of the market. The marketing cost per 100 kg maize for Farias, wholesalers and Aratdars were Tk. 61.48, Tk. 122.75, and Tk. 96.80, respectively. Cost of marketing for wholesalers was the highest among all intermediaries and the lowest for Farias. The marketing cost incurred by all intermediaries was Tk. 281.03 per 100 kg maize. Transportation cost was the highest (46.42%) and information search cost was the lowest (1.35%) of the total marketing cost. Knowledge about marketing system is needed for farmers and other market participants to do their business better.

Information Service and Integration of Maize Markets in Togo

In the framework of liberalization policies, a market information service (SIM) was created in 2008 in Togo. This public service entrusted in collecting and disseminating information about the mercurial of agricultural products aimed to improve the spatial integration of agricultural markets through the development of arbitrage. This paper assesses the impact of price dissemination on the spatial integration of maize markets. To this end, the weekly retail maize prices collected from 13 markets for the period without service (2003-2007) and the period with service (2008-2012) are considered. The results show that the impact of price dissemination on the spatial integration of maize markets is mitigated. By reference to Lome, neither rural markets nor northern markets have significantly improved their level of long-term and short-term spatial integration. To improve the efficiency of the service, it is necessary to understand the need of the sector’s stakeholders in order to revise the current format of the market information service.

Competition in Kenya and Its Impact on Income and Poverty: The Case of Sugar and Maize

This paper investigates the link between competitive, well-functioning food markets and consumer welfare. The paper explores two key food markets in Kenya – sugar and maize – and argues that a variety of factors conspire to distort market prices upwards. Distortionary factors include import tariff policy, non-tariff barriers, potential anticompetitive conduct by firms and direct state intervention. Changes in prices are associated with welfare effects on consumers, using the most recent available representative household survey data – the Kenya Integrated Household Budget Survey (KIHBS) 2005/6. Relaxing trade barriers to allow sugar prices to fall by even only 20 percent could reduce poverty by 1.5 percent. Similarly, adjusting government interventions in the maize market, that have been shown to inflate maize prices by around 20 percent on average, could reduce poverty by 1.8 percent. More competitive prices have a larger effect on the poorest households in both urban and rural areas, therefore the relevance of effective competition policies for poverty reduction strategies.

Is Chinese or American maize price effective for trading and policy-making reference?

Purpose – The purpose of this paper is to discover an effective maize price for trading and policy-making reference by assessing the price transmission of the US spot and futures maize prices to Chinese counterparts. Design/methodology/approach – The authors apply a systematic, quantitative method to analyze the integration between US and Chinese maize markets. Based on the residuals of the variables through error correction model, the directed acyclic graph (DAG) among six price variables is conducted. With consideration of the dependence on and direction of six price variables, the variance decomposition of each variable is calculated. Findings – This paper shows that the vertical price transmission passes from wholesale price to farm-gate price. The horizontal price transmission ranges from spot price to futures price at the domestic market and from the American spot price to domestic spot price, from the American spot price to domestic futures price and from the American futures price to domestic futures price. The American maize spot and futures prices, and in particular the spot price, have greater effects on domestic maize prices contemporaneously. It also indicates that the American spot price is the leader price in the long run at both maize markets. Originality/value – This paper contributes by using the DAG method in this paper. It also contributes by helping policy makers and market participants find the leading prices and offers insight into ways of gaining power of price setting in the maize market.

Creating scarcity from abundance: Bumper harvests, high prices, and the role of state interventions in Zambian maize markets

In 2012/13 Zambia experienced a significant spike in maize meal prices, which coincided with three consecutive years (2010 - 2012) of record maize surpluses. This seemingly paradoxical price spike occurred in the wake of a dramatic escalation of the Government’s Food Reserve Agency (FRA) interventions in the market, with the FRA purchasing approximately 80% of the available surplus during these surplus production years. Using a case study approach, this article explores Zambia’s maize price spikes amidst years of bumper harvests. The study findings reveal that maize procurement and marketing behavior of the Government through the FRA contributed to major structural changes to the maize market: (1) A withdrawal from the market by commercial mills. By purchasing majority of the maize on the market, the FRA limited the need for commercial mills to access maize directly from the market. This reduced competition in the wholesaling sector and concentrated maize supply chain around the FRA; (2) Rationing of the FRA maize sold at subsidized prices to commercial mills. The FRA depots were unable to consistently meet the demand requirements of the commercial milling sector and as a result, some mills were prioritized in terms of receiving FRA maize. Mills that could not consistently access subsidized maize from the FRA were put at a comparative disadvantage; (3) Exit of the commercial farming sector from maize production. Between 2010 and 2013 commercial maize production in Zambia halved, from 300,000 to less than 150,000 metric tonnes. This was due to the price uncertainty created by FRA subsidies to commercial mills, which are the traditional markets for commercial farmers, as well as significant increase in smallholder production; and (4) Squeezing the informal processing sector out of the market. By procuring the majority of the available surplus and selling it at subsidized rates to a selected group of commercial mills, the informal market, including small-scale traders, retailers, and hammer mills, were limited in their ability to participate in the market. This in turn undermined the market channel most often used by poorer urban and rural households. These structural changes in the organization of Zambia’s maize market led to a decline in available maize supplies and reduced levels of private-sector competition making the market vulnerable to unanticipated demand shocks. Keywords: Maize, price spikes, bumper harvests, subsidies, markets, traders, agriculture, Zambia

Market-level assessment of the economic benefits of atrazine in the United States.

BACKGROUNDAtrazine and other triazine herbicides are widely used in US maize and sorghum production, yet the most recent market-level assessment of the economic benefits of atrazine is for market conditions prevalent in the early 1990s, before commercialization of transgenic crops. Grain markets have changed substantially since that time; for example, the size of the US maize market increased by 170% from 1990–1992 to 2007–2009. This paper reports a current assessment of the economic benefits of atrazine.RESULTSYield increases and cost changes implied by triazine herbicides are projected to reduce maize prices by 7–8% and sorghum prices by 19–20%. Projected consumer benefits from lower prices range from $US 3.6 to 4.4 × 109 annually, with the net projected economic benefit for triazine herbicides to the US economy ranging from $US 2.9 to 3.4 × 109 annually because lower prices imply reduced producer income. Productivity gains from triazine herbicides maintain an estimated 270 000–390 000 ha of land in non-crop uses that generate environmental benefits not accounted for in this analysis.CONCLUSIONEven in the current era, with transgenic varieties dominating crop production, atrazine and the other triazine herbicides continue to be a key part of maize and sorghum production and generate substantial economic benefits. © 2013 The Authors. PestManagement Science published by JohnWiley & Sons Ltd on behalf of Society of Chemical Industry.

Measuring Spatial Integration in Niger Grain Markets

This paper investigates the spatial integration of Niger cereal markets using monthly retail prices of four staple crops consumed daily in the country. We used co-integration techniques to analyze the price relationship between six main markets. The results revealed high co-integration in Millet and Maize market pairs. On the Contrary, the study indicates also high absence of co-integration in most of Rice and Sorghum markets. Many factors such as poor infrastructures, government interventions, may be major impediments to spatial integration between markets. Development of private grain marketing will help to improve trading between markets, thereby increasing competition and circulation of grain from surplus areas to supply deficit areas.

Effect of Price and Non-price Incentives on Production and Marketable Surplus of Food Crops Supply in Ghana

Aim: This study examined food crop farmers’ supply responsiveness to selected price and non-price variables. Study Design: Cross-sectional design Place and Duration of Study : The study was carried out in Ejura Sekyeredumasi District in the Ashanti Region of Ghana and data was collected in November 2013. Methodology: A simple random sampling technique was used to sample 250 farmers for the study. Structured questionnaire was used to solicit information from the sampled farmers on production and marketing of maize and cassava. The study used a modified Nerlovian supply model to analyse the data in order to assess farmers’ supply responsiveness to selected price and non-price variables. Results: The results of the study revealed that food crop farmers respond favourably and promptly to incentive package (price or non-price factors) and this reflected in farmers’ output and farm management practices. Conclusion: The study provides evidence to support price incentives and non-price factors on food crop supply response. It suggests that a strong complementary policy instrument involving price and non-price factors will provide a fillip to agricultural productivity.

The transmission of world maize price to South African maize market: a threshold cointegration approach

AbstractThis article seeks to provide an explanation for the relationship between domestic maize price in South Africa and world maize prices in order to evaluate comovement and transmission of world prices to domestic prices in sub‐Sahara African countries. This is done by comparing nested and nonnested models that capture different forms of nonlinearity in the price spread. Adopting a Bayesian approach that allows for comparison of models using Bayes factor, we found that the relationship between South African price and world price for maize indicates the presence of nonlinearity in price transmission with three regimes that is triggered by the price spread in previous period.

Maize dependence or market integration? Caries prevalence among indigenous maya communities with maize‐based versus globalized economies

The relationship between diet and oral health is widely known, yet data on dental caries prevalence is lacking for many indigenous groups with traditional or rapidly modernizing diets. This research documents caries prevalence in two Maya communities from northern Yucatán (Mexico) with significantly different levels of market integration, subsistence, and diet: Yalsihón, with a traditional, maize-based subsistence economy, and Dzilam, with access to globalized food markets. Each sample was subdivided by sex into 15-19, 20-24, and 25-30 years-of-age classes. Caries prevalence was considered separately both when the lesion affected the enamel superficially (grade 1+) and when it reached the dentin (grade 2+). In both villages, females of all age classes manifest more caries than males. Results show higher prevalence of caries at Dzilam than at Yalsihón, except for grade 1+ caries among 15-19-year-old males and grade 2+ caries among 15-19-year-old females. Though differences are not significant, earlier pregnancies among 15-19-year-old females at Yalsihón could be a causative factor. A survey indicated a more balanced diet at Yalsihón despite a heavier intake of maize than at Dzilam. Striking differences were documented in the ingestion of soda and globalized foods; sodas were virtually absent at Yalsihón, while at Dzilam they were ingested daily in great quantities. The decline in oral health at Dzilam is inferred to result from consumption of industrially processed foods and drinks, while a traditional diet leads to less caries despite daily heavy consumption of maize, which must be considered when interpreting caries rates in archaeological samples.