Improving Agricultural Market Performance:
Creation and Development of Market Institutions
33
funded by land-grant provisions that enabled the states to establish and fund their colleges.
Subsequently, and also in the United States, the Smith-Lever Act, of 1914 established the
Cooperative Extension Service – a tripartite cooperation of federal, state, and local/county
Governments, with the state college as the extension agency - "in order to aid in diffusing
among the people of the United States useful and practical information on subjects relating to
agriculture and home economics, and to encourage the application of the same."38
Similar market institutions were rolled out in other parts of the world with the objective to
ensure enforcement of quality standards and grades, ensuring fair food prices for both
consumers and (poor) producers, and rationalizing the allocation of resources.39 In particular,
the creation of agricultural market institutions such as marketing boards in Africa can be
traced back to these times.40
The establishment of marketing boards supported agricultural production, as marketing
boards were typically granted the mandate and authority to regulate pricing and market of
commodities, and especially for cash crops.41 Marketing boards had been established across
the British Commonwealth (e.g. New Zealand Meat Producers Board and the New Zealand
Dairy Board created in in 1922, the Australia Queensland Sugar Board created in 1923, and the
Australia Wheat Board, created in 1939 42) but were also found in similar forms in across
Africa, Asia, and Latin America. Examples of such marketing boards include the Cocoa
Marketing board and the Groundnut, Cotton, and Palm Produce Marketing boards, which were
established in Nigeria in 1947 and 1949, respectively.43
Such marketing boards were strongly monopolistic in nature, concentrating buyer-side market
power and enabling Governments to regulate market prices and facilitate agricultural
exports.44 These marketing boards possessed monopoly power to buy commodities from
farmers and involve in exporting with the objective to guarantee low prices for consumers and
increase the supply of agricultural products for foreign demand and export purposes.
Marketing boards levied high taxes on the agricultural sector to finance industrialization.
Cooperatives emerged as market institutions, joining marketing boards. For instance, the
cooperative movement in Uganda gained momentum around the 1900s.45
Intervention in the agricultural sector remained strong following the Great Depression and the
Second World War. Many Governments of new states established in the aftermath of World
War II maintained their marketing boards while the US and EU intervened strongly in their
agricultural markets. The International Monetary Fund (IMF) and other donor organizations
offered funding to countries to intervene in their agricultural sectors in order to
38 Jones, G. & Garforth, C. (1997) “The History of Agricultural Extension Services,” in FAO (eds.), Improving agricultural
extension. A reference manual, pp. 7-18, Rome: FAO.
39 Casson, M. & Lee, J. (2011), “The Origin and Development of Markets: A Business History Perspective,” Business History
Review, 85(1), pp 9-37.
40 Lovelace, J. (1998), Export Sector Liberalization and Forward Markets: Managing Uncertainty During Policy Transitions,
available a accessed May 2017].
41 Ibid
42 Barrett, C. & Mutambatsere, B. (2008), Marketing boards, in Blume, L. & Durlauf, S. (eds.), The New Palgrave Dictionary of
Economics, pp. 2-6, London: Palgrave Macmillan.
43 Iweze, D. (2014), “A Critique of the Establishment of the Marketing boards in Nigeria in the 1940s,” Journal of History and
Diplomatic Studies, 10(1), pp. 17-35.
44 Barrett, C. & Mutambatsere, B. (2008), Marketing boards, in Blume, L. & Durlauf, S. (eds.), The New Palgrave Dictionary of
Economics, pp. 2-6, London: Palgrave Macmillan.
45 Uganda Cooperative Alliance (2009), Development of the Cooperative Movement in Uganda, available at
Accessed May 2017].