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Maize marketing and trade policy in a pro-poor agricultural growth strategy: Insights from household surveys in Eastern and Southern Africa
14 June 2005
TS Jayne, B Zulu, D Mather, E Mghenyi, E Chirwa and D Tschirley

Acknowledgements: Paper prepared for the Conference on "Toward Improved Maize Marketing and Trade Policies in the Southern Africa Region", sponsored by FANRPAN, June 21-22, 2005, Centurion Park Hotel, Centurion, South Africa


This paper draws on insights generated from previous and on-going research on agricultural marketing and policy issues in the Department of Agricultural Economics at Michigan State University. Support for this analysis was provided by the Rockefeller Foundation, USAID/EGAT and Africa Bureau, and the World Bank. Support from USAID missions in Kenya, Mozambique, and Zambia is acknowledged for their role in financing the collection and analysis of household survey data reported in this study.

TS Jayne and D Tschirley are Professors, International Development, Department of Agricultural Economics at Michigan State University. B Zulu is a Research Fellow at the Food Security Research Project, Lusaka, Zambia. E Chirwa is a faculty member at the University of Malawi, Chancellor College. D Mather is Assistant Professor, International Development, Michigan State University. E Mghenyi is a graduate research assistant in the Department of Agricultural Economics at Michigan State University.

Introduction

There is widespread recognition that the existing food marketing policy environment in most of eastern and southern Africa is not generating the growth in farm productivity required to raise living standards and reduce poverty. One of the regions major development challenges is to identify and put into place the policies, institutions, and investments that will enable agricultural marketing systems to catalyze productivity growth on the millions of smallholder farms in the region.

There is also widespread agreement on the broad ingredients of an agricultural marketing system capable of promoting farm productivity growth in eastern and southern Africa: these involve the three "Is" of institutions, incentives, and investments (Gabre-Madhin, 2005; Coulter, 2005). Problems of uncertainty, price instability, access to markets, and weak coordination between the various stages in the food supply chain, pose major challenges for marketing actors and African policy makers. The role of institutions is to provide a certain amount of predictability about the behavior of other actors in the value chain, to provide incentives that channel behavior toward investing in cost-reducing technology throughout the entire agricultural supply chain, and to protect the interests of the poor. However, such discussions about the three Is seldom offer much specific implementation guidance for policy makers. To be helpful to policy makers in the region, we need to know how to translate these three Is into concrete and practical implementation (Omamo, 2001).

Of course, guidance can be gleaned from experience -- what has worked and not worked in the past. However, learning from experience requires an accurate characterization of the policy environment being studied. While the food marketing policy environment in eastern and southern Africa since 1990 has produced unimpressive results over the past decade, this paper argues that the empirical record has been largely mischaracterized, and that the policy implications arising from a more precise understanding of the food marketing policy environment over the past decade will sharpen our understanding of what is still needed to incorporate the three Is in practice into the food marketing systems in the region.

The objective of this paper is to identify the major policy directions and some specific actions that governments might consider to enable domestic and regional food markets to kick-start pro-poor agricultural growth. We start by reviewing the policy environment in Malawi, Zambia, Zimbabwe, and Kenya since 1970. Then, based on recent nationwide surveys of small-scale farm households in Kenya, Malawi, Mozambique, and Zambia, we discuss the implications of smallholder production and marketing behavior for the design of food marketing and trade policies in the region. These nationwide survey findings provide an updated empirical foundation for discussion of the role of food marketing and trade within the context of pro-poor agricultural growth strategies in Eastern and Southern Africa. The paper argues that some of the conventional wisdom guiding food policy debates in the region may warrant reconsideration as smallholder land allocation and food production and marketing patterns have changed over time.

Lastly, we attempt to spell out parts of a specific policy agenda for maize marketing systems to catalyze small farm productivity growth and food security. The intent of the paper is not to deal with implementation modalities, which would be premature since no government has yet to explicitly endorse the policy positions taken in the paper. Moving from this policy agenda to concrete implementation modalities the how questions raised by Omamo (2003) will require intensive and country-specific consultations between policy makers and analysts.

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