States and Political Intervention in Markets: A Case Study from Africa

The paper describes agricultural policies in Africa and seeks to account for them. Agricultural policy is defined as that set of decisions and choices by governments which influence the prices farmers face in the markets which determine the real value of their incomes. These include the markets for the commodities produced by farmers, the goods which they employ in farming, and the goods which they buy from urban industry. The pattern of government intervention is highly adverse to the interests of most farmers. Governments lower the prices of farm products and adopt policies which raise the prices of commodities produced by urban industry. While they tend to subsidize the prices of farm inputs, the benefits of this policy are consumed by the privileged few. The paper explores three explanations for the pattern of public policy. One treats the state as an agency for maximizing the welfare of society and sees policy choices as decisions made out of a regard for what is socially best. The second treats the government as an agency which responds to private interests and regards public policy as an outcome of lobbying efforts by groups seeking favorable decisions by governments. The third treats the government as an agency which seeks to retain political power and interprets policy as an instrument utilized by those who seek to control the behavior of their populations. Each approach is shown to explain some but not all aspects of government policies toward farming in Africa. And of the three, the first is shown to be least satisfactory.