The impact of policy in African agriculture : an empirical investigation

The last two decades have witnessed a decline in Africa's agricultural exports and a sharp rise in the region's food imports. With over 70 percent of Africa's people dependent on agriculture for their livelihood, getting agriculture moving in Africa is one of the most important formidable challenges facing Africa in the 1990s. There is now wide recognition that government policies have contributed to Africa's crisis and that policy reforms can help foster restored growth. This report examines the link between government policy and agricultural performance across countries and over most of the past two decades. The analysis confirms that governments'agricultural pricing and marketing arrangements and their macroeconomic policies have slowed agricultural growth. In particular, overvalued currencies have often caused the largest distortions. Recent trends, however, offer evidence that policy reforms have helped improve agricultural growth where these reforms have sustained agricultural procedures. The author also offers evidence that government policies have been substantially responsible for Africa's growing food imports, by encouraging urban migration and by lowering the prices for imported foods relative to domestically-grown foods. This study contributes to a better understanding of the causes of Africa's agricultural crisis and can help forge a consensus on how to restore vitality in African agriculture.