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What Should be the Focus of Agricultural Policy Reforms in Sub-Saharan Africa? A CGE Analysis

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  • Jean Balié
  • Badri Narayanan

    (Badri Narayanan, University of Washington, Seattle, WA, United States.)

Abstract

While a lot of research has been conducted on agricultural subsidies and other forms of policy transfers in developed and developing countries alike, substantial data constraints have characterised those conducted in developing countries. For this study, we employ a novel and uniquely developed dataset on these policies in Sub-Saharan Africa (SSA), to analyse the impact of policy reforms, using the latest available GTAP 9.1 Data Base, in the widely employed GTAP framework, for the first time. We simulate the scenarios of removal of output subsidies, removal of ‘market development gaps’ within and outside the country. Our results indicate that removing market development gaps is likely to increase the agricultural output without affecting trade much, while removing the subsidies could harm output a lot by import-substitution of the costly domestic output. We conclude that governments in SSA may do well to focus on developing their markets better rather than cutting the assistance to their farmers, which could in fact be counter-productive instead of raising the efficiency of domestic farmers through competition. JEL Classification: C68, Q11, Q13, Q17, Q18

Suggested Citation

  • Jean Balié & Badri Narayanan, 2019. "What Should be the Focus of Agricultural Policy Reforms in Sub-Saharan Africa? A CGE Analysis," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 13(4), pages 401-435, November.
    • Handle: RePEc:sae:mareco:v:13:y:2019:i:4:p:401-435
    DOI: 10.1177/0973801019868392
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    References listed on IDEAS

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    6. Timothy A. Wise, "undated". "The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform," GDAE Working Papers 04-02, GDAE, Tufts University.
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    Cited by:

    1. Kwaw-Nimeson, Enoch & Tian, Ze, 2021. "The impact of agricultural producer price on sustainable food security in Africa – a system GMM approach," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 7(3), September.
    2. Augustine Blay Arko, 2020. "Factors Influencing the Implementation of Agricultural Policy: A Case Study from Ghana’s Cocoa Diseases and Pests Control (CODAPEC) Program," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(1), pages 262288-2622, December.

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    More about this item

    Keywords

    Africa; GTAP; Policy Support; Market Failures; Agriculture; Sub-Sahran Africa;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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