Small scale farming is critical to many people’s livelihoods in sub-Saharan Africa, yet there has been little or no growth in food crop productivity over the past 30 years. This failure leads us to questions about the effectiveness of agricultural liberalisation policies in reducing poverty.

Rural areas in sub-Saharan Africa suffer from low incomes and poorly developed local markets affected by seasonal variability. Along with poor roads, telecommunications and lack of information about prices, these factors have meant small scale producers have been unable to contribute to the growth in agriculture that sub-Saharan Africa needs to meet the food requirements of its population. Research from Imperial College London, UK and their partners in Africa, assesses market policies introduced by donors and governments to address these issues, in particular market liberalisation and reform.

While state intervention has had successes and failures, opening markets to the private sector and international competition has had limited success in enabling widespread agricultural development needed for poverty reduction.

Three main reasons explain the limited private sector response to liberalisation policies. First, the state has only partially implemented these policies which has limited incentives and raised risks for private investors. Second, there has been weak and inadequate support for market and private sector development. Finally, there are basic coordination problems that inhibit the development of liberalised markets needed for agricultural development in poor rural areas. The authors look at case-studies in grain (maize and rice), cash (tobacco, cotton and groundnut) and perennial (tea, cocoa and coffee) crop production in nine sub-Saharan countries to evaluate these reasons for current policy failures.

They find that:

• Liberalisation reforms were most successful in promoting agricultural exports and in some cases reducing consumer prices for staple foods.
• There was no success in developing input and output, or financial markets offering low priced, timely and reliable services that are critical for intensive cereal production.
• Large organisations that occupy dominant positions in agriculture markets are often necessary for supply chain coordination, but these tend to be absent from liberalised staple food markets.
• Both markets and states lack the capacity and incentives to provide the economic coordination needed for agricultural development.
• ‘One size fits all’ policies seldom work: different policies are needed for food and cash crops, for high and low input crops, for different areas and types of producers; and over time as an area develops.

The research suggests that:

• new polices are needed that draw on the strengths of, and involve both state led and market actors
• new roles are needed for governments, private businesses and civil society with mutually supportive roles for each with an emphasis on state action to improve coordination and reduce private investor risks from unstable markets
• governments need to be more accountable for their actions and to implement consistent and transparent policies
• governments should establish basic infrastructure, promote technical change, stabilise prices, and reduce risks for and encourage coordination between firms providing services to farmers in poor areas
• a major challenge for governments is to demonstrate their commitment to consistent and transparency, while also adjusting policies according to match development needs
• further research is needed into the impacts of different policies in different countries and systems.

Source(s):
‘Agricultural Liberalisation in sub-Saharan Africa’, EC-PREP Report, Imperial College London, by Andrew Dorward, Jonathan Kydd, Colin Poulton et, November 2004 Full document.
Further details about this research project 'Agricultural Liberalisation in sub Saharan Africa' Full document.

Funded by: UK Department for International Development (DFID) as part of the European Commission’s Poverty Reduction Effectiveness Programme (EC-PREP)

id21 Research Highlight: 27 June 2006

Further Information:
Andrew Dorward
Centre for Development and Poverty Reduction
Department of Agricultural Sciences
Imperial College London
Orwin House
Wye Campus
Ashford
Kent TN 25 5AH, UK

Tel: +44 (0)20 7594 2679
Contact the contributor: a.dorward@imperial.ac.uk

Imperial College, UK

Other related links:
'Walking tightropes: supporting farmer organisations for market access'

'Liberalised cotton markets in Africa: what could bring success?'

'High transport costs affect trade in east Africa'

'A labour market policy for poverty reduction in sub-Saharan Africa'

Eldis Resource Guide on Trade Liberalisation