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Markets
 Improved market access is paramount for turning subsistence farming into a major driving force in economic development locally, nationally, regionally and globally. (Photo: K. Foss) |
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A viable market economy and effective economic policies are essential for making poor families income and food secure. If a market-driven agricultural recovery is to succeed, Green Revolution science and technology will have to be complemented by improved governance, market access, information, communications and transport.
In the Asian Green Revolution of the sixties, countries were primarily faced with a supply constraint and could easily find markets for their increased outputs. Today, global agricultural markets impose an additional demand constraint on African countries. It is not sufficient any more to manage to raise production levels. An equally strong focus needs to be put upon the development of the supply chain across most agricultural sub-sectors. Africa's revolution cannot therefore be a green one, as important changes need to take place far from the farm.
Making markets work
Poorly functioning markets for inputs and products have been a major challenge to agricultural development in Africa. African governments failed to replicate the intervention measures of their Asian predecessors in the 1970s and 1980s, and their subsequent attempts to liberalize markets have also been disappointing. To revitalize their agricultural sectors, African governments are cooperating via the Comprehensive Africa Agriculture Development Programme (CAADP) on two key fronts: To accelerate agricultural productivity by raising the capacities of private entrepreneurs, including commercial and small-holder farmers, to meet the increasingly complex quality and logistic requirements of markets focusing on selected agricultural commodities that offer the potential to raise rural (on and offfarm) incomes; and to create a regulatory and policy framework to facilitate emergence of regional economic spaces that spur the expansion of regional trade and cross-country investments.
Public and private
Influential voices like the InterAcademy Council and the World Bank are urging renewed focus on creating effective markets through encouraging public-private partnerships. Physical access to markets must be improved through public and private investments in infrastructure. Access to market information must be improved using established means such as radio and new information technologies such as mobile phones. Traders and producers have to be given better access to finance and insurance markets, for example by setting up systems to lessen price risk. Price volatility in important product markets must be reduced by supporting measures like commercially based storage such as warehouse receipt systems. Small producers must be linked to established markets, as is happening through commodity associations in Southern Africa. Restrictions and controls on the sale and purchase of agricultural products must be removed.
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