Improving Agricultural Market Performance

Creation and Development of Market Institutions

Chapter 3 – Overview of Agricultural & Food Market Institutions in the

OIC

A true regional agricultural and food market is made up of both a tradition of trade as well as

the institutions that enable, support and enhance that trade. As explained in the Conceptual

Framework, the focus of this study concerns agricultural and food market institutions created

and developed in OIC Member Countries with the objective to directly intervene in their

agricultural markets to contribute to a stable supply of food with reasonable prices and,

eventually, food security and self-sufficiency. Agricultural and food market institutions thus

contribute to overall policy objectives of industrialization, rural poverty alleviation, and

providing for the needs of increasing urban populations.

This Chapter of the study presents an overview of current relevant market institutions in the

OIC Member Countries by following the classification of the agricultural market institutions

based on the Conceptual Framework:

Commodity market regulation authorities

Cooperatives

State-owned economic enterprises

Marketing boards

Licensed public warehousing companies

Commodity exchange platforms

The remainder of this Chapter focuses on the roles, duties and responsibilities of agricultural

and food market institutions in the OIC, their legislative and administrative frameworks, how

these contribute to coordination of agriculture and food markets across the OIC, as well as

challenges and opportunities ahead in creation and development of market institutions in the

OIC.

It should be noted, however, the application of such market institutions across the OIC

Member Countries is very heterogeneous. Various OIC Member Countries already have a

legacy of such institutions, and it is possible that several of these may be altered or adapted to

function across part or all OIC Member Countries. The following presents an overview of the

current situation of the agricultural markets in the OIC Member Countries and examines the

channels in the agriculture and food sector consisting of production, handling, storage,

transporting, processing, packaging and retailing. In this way it will be possible to identify the

agricultural and food market institutions and to show the impacts on the supply and demand

side of products.

Market control of agriculture varies across the nations of the OIC. Several OIC Member

Countries have been strong, long-term members of the global agricultural economy for some

time, and have the institutions to enable this. Countries such as Nigeria appear to have a

comprehensive approach to addressing food safety, and have even established specific

agencies for that purpose. Some nations, such as Tunisia, have gone beyond the concepts of

food safety and regulation by creating institutions specifically to aid industry compliance with

national regulations and for improving the state of food infrastructure. Indonesia’s focus on

realizing self-sufficiency for a number of agricultural commodities (e.g. rice, maize, soybeans,

sugar, and beef) is, among others, facilitated by its market institutions.