Improving Agricultural Market Performance:
Creation and Development of Market Institutions
22
 State-owned economic enterprises – Enterprises and organizations wholly or partly
owned, financed, and operated by the Government, carrying out producing, processing
and wholesale activities. The degree of autonomy may vary as some decision require
approval from the responsible Minister while more operational decisions (e.g.
recruitment and finance) may be taken autonomously.22 Examples include state-
owned rubber and palm oil plantations in Indonesia.
 Marketing boards – Marketing boards are commodity-specific organizations
supervised or operated by Government, which control much of the commodity’s
market system, from production through to processing, distribution, transport, and
trade. Marketing boards may have been granted state monopoly power on trade in a
specific commodity, enabling them to set commodity prices, or they may have less
extensive powers and act mainly in a facilitative capacity to promote production,
consumption, production, and exports, often through the application of voluntary
quality marks or certifications. Examples of marketing boards include the Uganda
Coffee Development Authority, Dairy Development Authority, and Cotton Development
Organization as well as Tunisia’s National Oil Board, Cereals Board, and Sugar
Company.
 Licensed public warehousing companies – A system of licensed warehouses can
provide storage, handling, and transportation of agricultural and food products. The
main objective of such a system is to link food producers and processers with
consumers to improve market range, market coverage, and price consistency. 23 Many
developed countries, but few developing countries, have privately-run warehouse
systems, principally because agro-food markets in less developed countries are more
fragmented and generate insufficient volumes to make private warehouses profitable,
as well as lacking the capacity to ensure proper quality control and standardization.24
Public licensed warehouses can help overcome this challenge. Warehouse facilities can
be either be owned and operated by a Government entity or may be developed, owned,
and operated by independent private sector entities under license from a Government
regulatory authority such as a Ministry of Agriculture. Licensed warehouses, operating
under strict Government guidelines, can help ensure uniform quality standards and
storage conditions, thus increasing financial liquidity in the market system. Uganda
Warehouse Receipt System Authority (UWRSA) and Indonesia’s Commodity Futures
Trading Regulatory Agency (COFTRA) both are responsible for implementing and
administering public warehousing systems in their respective countries.
 Commodity exchange platforms – As a market exchange, where agricultural and
food commodities are exchanged and traded, commodity exchanges can further reduce
risk and inject liquidity into agricultural markets by enabling farmers to lock in a price
and profit margin far in advance of harvest, which in turn enables them to purchase
22 International Livestock Research Institute (1995), Livestock Policy Analysis , pp. 111-148, Addis Ababa: International
Livestock Research Institute.
23 Ulas, D. (2007), “EU Market Access: The Way Of Licensed Warehousing System for Turkish Food Producers and Exporters,”
Poster Paper prepared for presentation at the 105th EAAE Seminar ‘International Market and International Trade of Quality
Food Products, Bologna, Italy, March 8-10, 2007.
24 Warehouses, whether publicly or privately operated, must be able to ensure uniform standards to stored commodities or,
alternatively, to classify them into different grades according to size, quality, or similar dimensions. Without this,
commodities cannot be commonly stored but must be segregated into separate storage for each producer’s consignment,
which makes storage far more expensive and difficult, and financially unviable.