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Assessing the policy environment for cash crops in Malawi: what could hinder the achievement of the National Export Strategy objectives?











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    Book (series)
    Can budget support to the cotton sector be used more efficiently? An assessment of the policy support measures in Mali and Burkina Faso. 2015
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    In Burkina Faso and Mali, cotton is the most important cash crop, given its high contribution to the GDP and to the export sector revenue. Export of cotton lint accounted for 60 and 15 percent of the value of national exports, respectively, in 2014. To maintain the level of cotton production, the two Governments support the sector. Indeed, the analysis based on the Monitoring and Analysing Food and Agricultural Policies (MAFAP) methodology show that producers received incentives of 21 and 12 p ercent in Burkina Faso and Mali, respectively, between 2005 and 2012 (Nominal Rate of Protection-NRP). The analysis provides insights on the level of domestic price protection that compensates price distortions resulting from on one hand, exogenous causes namely the international price distortions and the exchange rate misalignment and on the other hand, endogenous inefficiencies such as the high transport or processing costs. Two adjusted NRP are computed, one using an adjusted benchmark price for cotton that is netted out of policy interventions at the international level (Anderson, 2006) and one using an alternate, non-misaligned exchange rate (BCEAO, 2013). The value chain inefficiencies are then discussed, using the Market Development Gap indicator which reveals that higher producer price could be obtained if inefficiencies were corrected through sound investment policies. Finally, a budgetary allocation analysis is proposed, along with the computation of Nominal Rates of Assist ance that reveal the full extent of policy support to the cotton value chain. Price intervention, with other cotton-related budgetary transfers, represented 9 percent of food and agricultural expenditure in Burkina Faso between 2006 and 2012 and 31 percent in Mali.
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    Technical note: Analysis of price incentives for groundnuts in Malawi 2005–2013 2014
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    This technical note is an attempt to measure, analyze and interpret price incentives for groundnuts in Malawi over the period 2005-2013. For this purpose, yearly averages of domestic farm gate and wholesale prices are compared with reference prices calculated on the basis of the price of the commodity in the international market. The price gaps between reference prices and domestic prices along the commodity’s value chain indicate the extent to which incentives (positive gaps) or disincentives ( negative gaps) were present at the farm gate and wholesale level. The price gaps are expressed in relative terms as a percentage of the reference price, referred to as the Nominal Rate of Protection (NRP). These key indicators are used by MAFAP to assess the effects of policy and market performance on prices. This technical note begins with a review of the commodity’s production, consumption/utilization, marketing and trade, value chain and policy context (Chapter 2). It also provides a detailed description of how key data elements were obtained and indicators were calculated (Chapter 3). The indicators were then interpreted in light of existing policies and market characteristics (Chapter 4), and key policy recommendations were formulated on the basis of this interpretation (Chapter 5). Finally, the note concludes with a few main messages, limitations of the analysis and areas identified for further research to improve the analysis (Chapter 6).
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    Booklet
    Technical note: Analysis of price incentives and disincentives for wheat in Kenya for the time period 2005-2013 2014
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    This technical note is an attempt to measure, analyse and interpret price incentives and disincentives for wheat in Kenya over the period 2005-2013. For this purpose, yearly averages of domestic farm gate and wholesale prices are compared with reference prices calculated on the basis of the price of the commodity in the international market. The price gaps between reference prices and domestic prices along the commodity’s value chain indicate the extent to which incentives (positive gaps) or dis incentives (negative gaps) were present at the farm gate and wholesale level. The price gaps are expressed in relative terms as a percentage of the reference price, referred to as the Nominal Rate of Protection (NRP). These key indicators are used by MAFAP to assess the effects of policy and market performance on prices. This technical note begins with a review of the commodity’s production, consumption/utilization, marketing and trade, value chain and policy context (Chapter 2). It also provide s a detailed description of how key data elements were obtained and indicators were calculated (Chapter 3). The indicators were then interpreted in light of existing policies and market characteristics (Chapter 4), and key policy recommendations were formulated on the basis of this interpretation (Chapter 5). Finally, the note concludes with a few main messages, limitations of the analysis and areas identified for further research to improve the analysis.

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