Many countries in sub-Saharan Africa remain dependent on a few primary commodities -- coffee, cocoa, cotton, sugar, tea, and tobacco -- for a large share of export earnings. Because demand for these commodities is price-inelastic, production and export expansion can depress world prices and hence reduce net export revenue. The authors discuss the effects of this phenomenon -- the adding-up problem -- on policy and development strategies for major agricultural export commodities in sub-Saharan Africa. They conclude that, as a practical matter, it is not feasible to design a regional commodity production and trade policy for sub-Saharan Africa as a whole because of the difficulty of equitably distributing the benefits of such a policy. Moreover, if an export tax is imposed on sub-Saharan Africa as a whole, the greatest benefits may go to producers in other regions such as Asia and Latin America. Individually, few countries in sub-Saharan Africa have sufficient market power to influence commodity prices in the long run. Possible expectations include Cote d'Ivoire (in cocoa) and to a lesser extent Ghana (in cocoa), Kenya (in tea), and Malawi (in burley tobacco). Export taxes may prove beneficial for these countries but, at certain levels, the primary effect of"optimal"taxes is to transfer resources from smallholders to governments with limited marginal welfare gains.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
References listed on IDEAS 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.:
Cited by: (explanations, 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.)