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July 30th, 2018

Agricultural policy incentives in sub-Saharan Africa in the last decade (2005–2016)

Published by FAO,

This synthesis study (PDF) by FAO summarizes policy monitoring indicators for 14 sub-Saharan African countries. These indicators are commonly used to assess the extent of policy support to agriculture, both in terms of price incentives for farmers in key commodity value chains, as well as level and composition of public expenditure in support of the agriculture sector. Results are very heterogeneous across countries and commodities, but indicate increasing support to farmers in the form of price incentives. Policies focused on sustaining domestic production, such as import tariffs and price support, gained momentum after the food price crises (2007-2011). This is driven by the favorable policy environment for food security crops, which was privileged overall by policy-makers in the most recent periods. Public expenditure indicators confirm that direct budget transfers in support of producers, mainly in the form of input subsidies, continue to represent the largest part of agriculture expenditure in most countries. Expenditures supporting other value chain agents as well as funding on research and knowledge dissemination are declining. Food crops continue to dominate public budgets while spending on cash crops or “innovative” products (e.g. horticulture) as well as on value chain integration and commercialization remains limited. Recent efforts to convert resources that were previously allocated to input subsidies towards investments in agricultural and rural infrastructure have not yet yielded the expected results.Overall, the results indicate little policy focus on value chain integration and commercialization. Market inefficiencies still persist as a source of price disincentives to farmers and a major constraint to agricultural development. Moreover, despite the recognition that a stable and predictable policy and price environment is crucial for economic growth, politically sensitive food security crops, like rice and maize, are still subject to discretionary market interventions by governments that tend to generate instability and unintended effects.

Curated from fao.org