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The impact of food aid on maize prices and production in Swaziland

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  • Mabuza, Majola Lawrence
  • Hendriks, Sheryl L.
  • Ortmann, Gerald F.
  • Sithole, M.M.
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    Abstract

    The objective of the study was to provide empirical evidence on whether food aid leads to depressed domestic maize prices and reduced maize production in subsequent years in Swaziland. The lack of empirical evidence has often resulted in premature negative conclusions about the impact of food aid on Swaziland’s maize industry. The study used secondary national data from 1985 to 2006. Variables used in the statistical analysis included quantity of cereal food aid; quantity of commercial maize imports; quantity of locally produced maize; official maize producer price; open market maize producer price; fertilizer price; fuel price; rainfall; and total area planted to maize. The impact of food aid was measured using the reduced form market equilibrium model consisting of maize quantity and maize producer price functions, estimated simultaneously through the two-stage least squares (2SLS) method. Analytical results revealed that food aid received by Swaziland does not lower prices of domestic maize and has no significant negative effect on the quantity of maize produced in subsequent seasons.

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    File URL: http://purl.umn.edu/49290
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    Bibliographic Info

    Article provided by Agricultural Economics Association of South Africa (AEASA) in its journal Agrekon.

    Volume (Year): 48 (2009)
    Issue (Month): 1 (March)
    Pages:

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    Handle: RePEc:ags:agreko:49290

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    Web page: http://www.aeasa.org.za/
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    Keywords: Financial Economics;

    References

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    1. Anonymous, 1997. "Meeting Food Aid and Price Support Objectives through Local Grain Purchase: A Review of the 1996 Experience in Ethiopia," Food Security Collaborative Working Papers 54956, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Christopher B. Barrett, 1998. "Food Aid: Is It Development Assistance, Trade Promotion, Both, or Neither?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 566-571.
    3. Abdulai, Awudu & Barrett, Christopher B. & Hazell, Peter, 2004. "Food aid for market development in Sub-Saharan Africa," DSGD discussion papers 5, International Food Policy Research Institute (IFPRI).
    4. Lavy, Victor, 1990. "Does food aid depress food production? The disincentive dilemma in the African context," Policy Research Working Paper Series 460, The World Bank.
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    Cited by:
    1. Garg, Teevrat & Barrett, Christopher B. & Gómez, Miguel I. & Lentz, Erin C. & Violette, William J., 2013. "Market Prices and Food Aid Local and Regional Procurement and Distribution: A Multi-Country Analysis," World Development, Elsevier, vol. 49(C), pages 19-29.

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