The Regulation of Rural Markets in Africa

Abstract

This paper argues that government policy in Africa tends to produce a harsh economic environment for the producers of agricultural products, and that a major effect may well be declines in agricultural production in that continent. Government bureaucracies control agricultural markets and set prices within them. Commercial policy is manipulated in ways that adversely affect the incomes of farmers. Pricing policies tend to be low price policies. A variety of pressures—some deriving from the need for taxes and foreign exchange; others from political pressures brought to bear by organized interests drive these policy choices. But the general result is a weakening of the incentives for agriculture.