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Price Incentives, Non‐price Factors and Agricultural Production in Sub‐Saharan Africa: A Cointegration Analysis

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  • Rainer Thiele

Abstract

This paper deals with the question of how responsive farmers in Sub-Saharan Africa (SSA) are to changes in incentives. Employing Johansen's multivariate cointegration approach, it investigates for ten selected SSA countries the long-run effect of pricing policies, macroeconomic distortions, and certain non-price factors on agricultural production. It turns out that – in those cases where cointegration relationships are found-estimated supply elasticities tend to lie between 0.20 and 0.50. Among the non-price factors, drought episodes have significantly impaired agricultural growth in six out of ten sample countries.

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Bibliographic Info

Article provided by African Development Bank in its journal African Development Review.

Volume (Year): 15 (2003)
Issue (Month): 2‐3 ()
Pages: 425-438

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Handle: RePEc:adb:adbadr:860

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References

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  1. Mamingi, Nlandu, 1997. "The impact of prices and macroeconomic policies on agricultural supply: a synthesis of available results," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 16(1), March.
  2. Phillips, P.C.B., 1986. "Testing for a Unit Root in Time Series Regression," Cahiers de recherche 8633, Universite de Montreal, Departement de sciences economiques.
  3. Mamingi, Nlandu, 1997. "The impact of prices and macroeconomic policies on agricultural supply: a synthesis of available results," Agricultural Economics, Blackwell, vol. 16(1), pages 17-34, March.
  4. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
  5. Schiff, Maurice & Montenegro, Claudio E., 1995. "Aggregate agricultural supply response in developing countries : a survey of selected issues," Policy Research Working Paper Series 1485, The World Bank.
  6. Rainer Thiele, 2000. "Estimating the Aggregate Agricultural Supply Response: A Survey of Techniques and Results for Developing Countries," Kiel Working Papers 1016, Kiel Institute for the World Economy.
  7. Jeroen J.M. Kremers & Neil R. Ericsson & Juan J. Dolado, 1992. "The power of cointegration tests," International Finance Discussion Papers 431, Board of Governors of the Federal Reserve System (U.S.).
  8. David E. Rapach, 2002. "Are Real GDP Levels Nonstationary? Evidence from Panel Data Tests," Southern Economic Journal, Southern Economic Association, vol. 68(3), pages 473-495, January.
  9. Marc Nerlove, 1979. "The Dynamics of Supply: Retrospect and Prospect," Discussion Papers 394, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  11. Andrew McKay & Oliver Morrissey & Charlotte Vaillant, 1999. "Aggregate supply response in Tanzanian agriculture," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 107-123.
  12. Rainer Thiele, 2002. "The Bias Against Agriculture in Sub-Saharan Africa: Has It Survived 20 Years of Structural Adjustment Programs?," Kiel Working Papers 1102, Kiel Institute for the World Economy.
  13. R. L. Voortman & B. G. J. S. Sonneveld & M. A. Keyzer, 2000. "African Land Ecology: Opportunities and Constraints for Agricultural Development," CID Working Papers 37, Center for International Development at Harvard University.
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Cited by:
  1. Olubode-Awosola, O.O. & van Schalkwyk, H.D. & Jooste, A., 2008. "Mathematical modeling of the South African land redistribution for development policy," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 841-855.
  2. Francesco Caracciolo & Fabio Gaetano Santeramo, 2013. "Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?," African Development Review, African Development Bank, vol. 25(1), pages 42-54, 03.
  3. Johnson, Michael E. & Takeshima, Hiroyuki & Gyimah-Brempong, Kwabena, 2013. "Assessing the potential and policy alternatives for achieving rice competitiveness and growth in Nigeria:," IFPRI discussion papers 1301, International Food Policy Research Institute (IFPRI).
  4. Olubode-Awosola, O.O. & Oyewumi, Olubukola Ayodeju & Jooste, Andre, 2006. "Vector error correction modelling of Nigerian agricultural supply response," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(4), December.
  5. Luis Lanteri, 2009. "Response of the Argentine Soybean Sown Area to Prices," BCRA Working Paper Series 200944, Central Bank of Argentina, Economic Research Department.

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