Agricultural prices and supply response in tropical Africa

This item was digitized as part of a project to share McGill's intellectual legacy with the public. If you are the copyright holder or a relative of the copyright holder who is deceased, you may request withdrawal by emailing escholarship.library@mcgill.ca. The full policy for eScholarship may be accessed here: mcgill.ca The objective of this thesis is to examine price performance, and estimate the aggregate export and food crop output response to output price and non-price variables in tropical Africa and its four main agro-climatic regions. The analysis of real producer prices indicates that there are more countries that exhibited a statistically significant decrease in real producer prices than a significant increase. Moreover, nominal protection coefficient analysis shows that African crop exporters, on average, received a small proportion (50 to 60 percent) of border prices. Using pooled cross-section and time series data, a partial adjustment model was then specified to estimate agricultural export and food output response. The results show that aggregate agricultural export and food supply responses to output prices in tropical Africa are both positive and significant but inelastic. The price elasticity for the export crop output in Tropical Africa is 0.02 in the short run and 0.04 in the long run, and for the food crop output 0.05 in the short-run and 0.07 in the long-run. The responsiveness of agriculture varies, however, across the main agro-climatic regions in tropical Africa. The estimated coefficient of the price variable and price elasticity estimates regions reveal that producers in the Eastern and Southern Africa, and Western Africa regions were responsive to price incentives, while producers in the semi-arid Sudano Sahel and Central Africa regions were not. The trend variable, as proxy of technology, is positive and significant in most regions, suggesting that the provision of non-price factors along with favourable price incentives, could be very effective in raising agricultural production in these regions.