Improving Agricultural Market Performance

Creation and Development of Market Institutions

The direct observations of agricultural market institutions, obtained through the case studies

and interviews carried out as part of this study, together with the observations and analyses

obtained from extensive desk research and literature reviews, have led to several conclusions:

The Governments examined for this study all intervene in agricultural market systems.

The question is therefore not whether intervention is warranted, but rather what kind

of intervention can produce the desired outcomes, and how Government and non-

Government institutions can interact most effectively to achieve those outcomes.

For the countries examined, the performance of agricultural markets is subject to the

influence of a great many institutions and policies, many of them only tangentially

connected to the agriculture sector.

Given the many complex interactions among market institutions, their effectiveness

can be assessed only by looking at the entire system of institutions, and the position of

those institutions within a wider policy context.

Independent, private sector institutions are critical to the effective functioning of

market systems. Robust non-Government market institutions such as sector

associations’ cooperatives, and exporters’ federations, are also essential if markets are

to work effectively.

Markets tend to perform better when institutions harness market forces to serve social

goals and try to make markets work more effectively, than when they try to supplant

market forces with uneconomic and ultimately unsustainable controls.

Market institutions tend to be most effective when their interventions focus on

transmitting information, mediating transactions, reducing volatility in commodity

markets, facilitating the transfer and enforcement of property rights and contracts,

managing competition, increasing the market power of producers and exporters,

improving product quality, and, above all, eliminating or mitigating market failures.

These conclusions form the basis for a number of specific recommendations.

Farmer Registration

Provide for better registration of farmers so that training and certification may be

provided, thereby improving both the ability of farmers to succeed and also enhancing

markets’ acceptance of the goods produced.

The creation of a farmer administration and authority managing this administration may

contribute to an improvement of market intelligence as this registration could function as an

instrument to collect, analyze, and disseminate statistics, data, and information on the

agricultural sector. This registration system may also increase the efficiency and performance

of the overall agricultural market system as the available market intelligence would show

opportunities for connecting agricultural production with processing, value-addition, and

other post-harvest activities, and, eventually, consumption. Moreover, this data could also be

used for granting and monitoring incentives as well as developing customized support and