The effects of price deregulation on maize marketing margins in South Africa
AbstractThere has been continuous controversy over the impact of food market reforms on food security in Africa. In South Africa, the government and media have often questioned the effects of price deregulation of maize meal, the major staple food, on consumers. This article determines the effect of retail price deregulation on the size of maize milling/retail margins in South Africa. Regression models of monthly milling/retail margins are run from the period May 1976 to December 2004. To assess the robustness of our findings, we estimate several different models of structural change, vary the sample period to examine the sensitivity of findings to unusual weather and market conditions in the region during episodes between 2001 and 2004, and run the models using different estimation techniques, OLS with Newey-West robust estimators and Feasible General Least Squares. In virtually all models, the results indicate that real maize milling/retailing margins in South Africa have increased by at least 20% since the deregulation of retail prices in 1991. Moreover, there is evidence of trend growth in the size of the milling margin over time. Simulations indicate that the deregulation of maize meal prices has entailed a transfer of at least US$179 million/year from consumers to agents in the marketing system. Further study is needed to understand why this outcome in South Africa differs from findings in other countries in the region concerning the effects of reform on food marketing margins.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Food Policy.
Volume (Year): 33 (2008)
Issue (Month): 3 (June)
Contact details of provider:
Web page: http://www.elsevier.com/locate/foodpol
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jayne, Thomas S. & Takavarasha, T. & van Zyl, Johan, 1994. "Interactions Between Food Market Reform and Regional Trade in Zimbabwe and South Africa: Implications for Food Security," Food Security International Development Working Papers 54703, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Tomek, William G. & Myers, Robert J., 1993. "Empirical Analysis Of Agricultural Commodity Prices: A Viewpoint," Working Papers 6847, Cornell University, Department of Applied Economics and Management.
- Wohlgenant, Michael K. & Mullen, John D., 1987. "Modeling The Farm-Retail Price Spread For Beef," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(02), December.
- Engle, Robert F & Lilien, David M & Robins, Russell P, 1987. "Estimating Time Varying Risk Premia in the Term Structure: The Arch-M Model," Econometrica, Econometric Society, vol. 55(2), pages 391-407, March.
- Jayne, T. S. & Jones, Stephen, 1997. "Food marketing and pricing policy in Eastern and Southern Africa: A survey," World Development, Elsevier, vol. 25(9), pages 1505-1527, September.
- Tschirley, David & Donovan, Cynthia & Weber, Michael T., 1996. "Food aid and food markets: lessons from Mozambique," Food Policy, Elsevier, vol. 21(2), pages 189-209, May.
- Jayne, T. S. & Argwings-Kodhek, Gem, 1997. "Consumer response to maize market liberalization in urban Kenya," Food Policy, Elsevier, vol. 22(5), pages 447-458, October.
- Tschirley, David L. & Jayne, Thomas S., 2008.
"Food Crises and Food Markets: Implications for Emergency Response in Southern Africa,"
Food Security International Development Working Papers
54559, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Tschirley, David L. & Jayne, Thomas S., 2008. "Food Crises and Food Markets: Implications for Emergency Response in Southern Africa," Food Security International Development Policy Syntheses 54508, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Mabiso, Athur & Weatherspoon, Dave D., 2008. "Fuel and Food Tradeoffs: A Preliminary Analysis of South African Food Consumption Patterns," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6126, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Anonymous, 2010. "Smallholder Marketing Behavior and Urban Consumption Patterns in Eastern and Southern Africa," Food Security Collaborative Policy Briefs 62155, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Tschirley, David L. & Jayne, T.S., 2010. "Exploring the Logic Behind Southern Africa's Food Crises," World Development, Elsevier, vol. 38(1), pages 76-87, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.