Improving Agricultural Market Performance:
Creation and Development of Market Institutions
23
inputs with far less risk. Commodity exchanges typically function well only in markets
in which a sufficiently high volume of commodities is produced and traded. Without
this, the exchange will lack adequate liquidity and the bid and ask prices will diverge to
the extent that a futures contract provides minimal risk protection to the farmer.
Regional commodity exchanges can potentially overcome these volume limitations, but
it can be difficult to establish effective regulation and oversight among multiple
national Governments. Côte d’Ivoire, however, in the early 1990s established a
regional securities exchange to serve issuers in the eight West African Economic and
Monetary Union (WAEMU) Member Countries, which has been fairly successful (in
2014 it was integrated into MSCI and S&P Dow Jones indices), but this success is based
in part on sharing a common currency (the Euro-backed CFA franc) and similar legal
and regulatory systems based on French law and reinforced by the OHADA regulatory
framework. 25 With similar underlying conditions, a regional commodity exchange
could also prove successful, as has for instance been suggested for the Uganda
Commodity Exchange.
 Associations and federations – Associations and federations are typically non-profit
organizations 26 representing companies and other stakeholders active in the
agricultural and food sector, improving access to services and facilitating exchange of
information. They often work in concert with cooperatives. Such organizations
typically conduct policy advocacy in order to improve the business environment, but
they also provide research, market intelligence and information as well as training and
skills development to members.27 Such organizations include chambers of commerce,
industry, and agriculture, as well as agricultural or farmers’ unions, and exporters’
associations.
 Education and research institutions – Public and private institutions that conduct
agricultural research and, often, provide agriculture extension and advisory services
and counselling.28 These may include universities and technical institutes, and
agricultural research stations, and they may often work together with international
partners.
 Development organizations and donors – A variety of domestic and international
development organizations are active in the agro-food sector. These include UN
agencies such as FAO and the World Food Programme (WFP), as well as the
Consultative Group on International Agricultural Research (CGIAR), a global
partnership of international and national agricultural research institutions funded by a
wide range of national Governments, bilateral and multilateral donors, private
foundations, and multinational enterprises. These, and many other foundations,
Governments, donors, and companies, partner with global, regional, and national
25 BRVM (2017), A propos, available a Accessed July 2017].
26 Shiferaw, B. & Muricho, G. (2011), “Farmer organizations and collective action institutions for improving market access
and technology adoption in subSaharan Africa: Review of experiences and implications for policy,” in ILRI (eds.), Towards
Priority Actions for Market Development for African Farmers, pp. 293-313, Addis Ababa: International Livestock Research
Institute.
27 FAO/INRA (2016), Innovative markets for sustainable agriculture - How innovations in market institutions encourage
sustainable agriculture in developing countries, p. 2, Rome: Food and Agriculture Organization of the United Nations and
Institut National de la Recherche Agronomique.
28 FAO/INRA (2016), Innovative markets for sustainable agriculture - How innovations in market institutions encourage
sustainable agriculture in developing countries, p. 2, Rome: Food and Agriculture Organization of the United Nations and
Institut National de la Recherche Agronomique.