Commodity Market Reform in Africa : Some Recent Experience
Since the early 1980s, dramatic changes in export commodity markets, shocks associated with resulting price declines, and changing views on the role of the state have ushered in widespread reforms to agricultural commodity markets in Africa. The re...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2183608/commodity-market-reform-africa-some-recent-experience http://hdl.handle.net/10986/19160 |
| Summary: | Since the early 1980s, dramatic changes
in export commodity markets, shocks associated with
resulting price declines, and changing views on the role of
the state have ushered in widespread reforms to agricultural
commodity markets in Africa. The reforms significantly
reduced government participation in the marketing and
pricing of commodities. Akiyama, Baffes, Larson, and
Varangis examine the background, causes, process, and
consequences of these reforms and derive lessons for
successful reforms from experiences in markets for four
commodities important to Africa-cocoa, coffee, cotton, and
sugar. The authors' commodity focus highlights the
special features associated with these markets that affect
the reform process. They complement the current literature
on market reforms in Africa, where grain-market studies are
more common. The authors suggest that the types of market
interventions prior to reform are more easily classified by
crop than by country. Consequently, there are significant
commodity-specific differences in the initial conditions and
in the outcomes of reforms related to these markets. But
there are general lessons as well. The authors find that the
key consequences of reform have been significant changes in
or emergence of marketing institutions and a significant
shift of political and economic power from the public to the
private sector. In cases where interventions were greatest
and reforms most complete, producers have benefited from
receiving a larger share of export prices. Additionally, the
authors conclude that the adjustment costs of reform can be
reduced in most cases by better understanding the detailed
and idiosyncratic relationships between the commodity
subsector, private markets, and public services. Finally,
while there are significant costs to market-dependent
reforms, experiences suggest that they are a necessary step
toward a dynamic commodity sector based on private
initiative. This is particularly true in countries and
sectors where interventions were greatest and
market-supporting institutions the weakest. |
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