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An Analysis of Alternative Maize Marketing Policies in South Africa

  • Jayne, Thomas S.
  • Hajek, Milan
  • van Zyl, Johan

The maize-oriented agricultural economies throughout Southern Africa are in fundamental transition. Increased recognition of the costs of historical controls on pricing and marketing already has led to partial maize market liberalization in several countries in the region. However, there is still intense debate over the appropriate scope and implementation of future food market reform. Much of the debate derives from uncertainty over the consequences of comprehensive and politically risky changes to domestic markets, especially at a time when regional market conditions are also in flux due to agricultural restructuring in neighboring countries. There is currently little information on the direction and magnitude of grain trade between South Africa, Zimbabwe, and other countries in the region under a deregulated external trading environment. There is also a lack of information on the regional consequences of alternative domestic maize policy scenarios currently under deliberation in South Africa. The purpose of this research is fourfold. First, we consider the role of food market reform in affecting future economic growth and food security in South Africa, and discuss the congruence between the government's food policy objectives and the existing marketing and pricing system. Second, trends in maize production, trade, prices and marketing costs in South Africa and Zimbabwe, the two largest maize traders in the region, are presented. Third, we present four alternative maize policy scenarios in South Africa, and then estimate their effects on maize production, gross revenues, consumer prices, and trade flows under various weather and pricing scenarios in Zimbabwe. A comparison of results across four policy scenarios clarifies the gainers, losers, and extent of income transfers between various regions and socio-economic groups within each region. The final section identifies means by which national food policy objectives in South Africa may be more cost-effectively achieved through harmonization of policies between South Africa and its regional neighbors.

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File URL: http://purl.umn.edu/54700
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Paper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Food Security International Development Working Papers with number 54700.

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Date of creation: 1995
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Handle: RePEc:ags:midiwp:54700
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  1. Delgado, Christopher L, 1992. "Why Domestic Food Prices Matter to Growth Strategy in Semi-open West African Agriculture," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 1(3), pages 446-71, November.
  2. Bruce F. Johnston, 1951. "Agricultural Productivity and Economic Development in Japan," Journal of Political Economy, University of Chicago Press, vol. 59, pages 498.
  3. Koester, Ulrich, 1986. "Regional cooperation to improve food security in southern and eastern African countries:," Research reports 53, International Food Policy Research Institute (IFPRI).
  4. Magadza, C. H. D., 1994. "Climate change: some likely multiple impacts in Southern Africa," Food Policy, Elsevier, vol. 19(2), pages 165-191, April.
  5. Jayne, T. S. & Rubey, Lawrence, 1993. "Maize milling, market reform and urban food security: The case of Zimbabwe," World Development, Elsevier, vol. 21(6), pages 975-987, June.
  6. Peter Timmer, C., 1988. "The agricultural transformation," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 8, pages 275-331 Elsevier.
  7. Rohrbach, David D., 1989. "The Economics of Smallholder Maize Production in Zimbabwe: Implications for Food Security," Food Security International Development Papers 54060, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  8. Jayne, T. S. & Rukuni, Mandivamba, 1993. "Distributional effects of maize self-sufficiency in Zimbabwe: Implications for pricing and trade policy," Food Policy, Elsevier, vol. 18(4), pages 334-341, August.
  9. Binswanger, Hans P. & Deininger, Klaus, 1993. "South African land policy: The legacy of history and current options," World Development, Elsevier, vol. 21(9), pages 1451-1475, September.
  10. Askari, Hossein & Cummings, John Thomas, 1977. "Estimating Agricultural Supply Response with the Nerlove Model: A Survey," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 257-92, June.
  11. 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.
  12. Mellor, John W, 1973. "Accelerated Growth in Agricultural Production and the Intersectoral Transfer of Resources," Economic Development and Cultural Change, University of Chicago Press, vol. 22(1), pages 1-16, October.
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