Price Signals and Supply Responses for Staple Food Crops in Sub-Saharan Africa

We investigate the supply response for main staple food crops in Sub-Saharan Africa over the period 2005-2013 using an innovative dataset recently developed by FAO’s “Monitoring and Analysing Food and Agricultural Policies” (MAFAP) programme. Relying on dynamic panel techniques, we observe that acre...

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Bibliographic Details
Published in:Applied economic perspectives and policy 2018-06, Vol.40 (2), p.276-296
Main Authors: Magrini, Emiliano, Balié, Jean, Morales-Opazo, Cristian
Format: Article
Language:English
Subjects:
Agricultural policy
Agricultural practices
agriculture commodities
Cost analysis
Crops
dynamic panel data
Economic models
Farmers
Food
Food supply
Incentives
Longitudinal studies
Price elasticity
price incentives
Producer prices
Submitted Article
supply response
Transaction costs
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Summary:We investigate the supply response for main staple food crops in Sub-Saharan Africa over the period 2005-2013 using an innovative dataset recently developed by FAO’s “Monitoring and Analysing Food and Agricultural Policies” (MAFAP) programme. Relying on dynamic panel techniques, we observe that acreage, production and yields respond to price signals, even if with a limited intensity. Moreover, we find that direct price incentives arising from border protection, government interventions in domestic markets, and price shocks at the border stimulate farmers’ supply. We also show that omitting transaction costs from the analysis leads to underestimation of the price elasticity of supply. Conversely, using wholesale instead of farm gate prices as proxy for producer prices leads to overestimation of this price elasticity.
ISSN:2040-5790
2040-5804
DOI:10.1093/aepp/ppx037