Improving Agricultural Market Performance:

Developing Agricultural Market Information Systems

INTRODUCTION

This study has been commissioned by the Standing Committee for Economic and Commercial

Cooperation of the Organisation for Islamic Cooperation (COMCEC) as part of evidence

generation for implementation of a four-part strategy which focuses on “increasing the

productivity of the agricultural sector and sustaining food security in the COMCEC Region”. The

study is intended to be the second contribution to fourth Output Area of the COMCEC strategy,

which is “Improving agricultural market performance: creation and development of market

institutions”. The rest of this introductory chapter consists of an overview of the background

and objectives of the study; the conceptual framework methodology adopted for the research;

and an outline of the structure of the rest of the report.

1.1

BACKGROUND OF STUDY ON MIS

Agriculture is of strategic importance in the economies of most members of the Organisation for

Islamic Cooperation (OIC). According to a recent official COMCEC Report, total agricultural

output by OIC member countries in 2015 represented 21% of the world’s agricultural

production and the sector employed 23% of the global agricultural labour force (COMCEC,

2017). The contribution of agriculture to GDP varies across the major regional groups. The

Asian Group lead the rest of the OIC member countries in terms of agricultural output. In 2015

total agricultural output from the Asian Group was valued at 363 US Dollars and represented

over 50% of total production by the member countries. The share of agriculture in the GDP of

Pakistan was about 24%, whilst that of Nigeria was 20.6% and contribution to GDP in Turkey

and Mali were 7.6% and 8.5% respectively.

Though agriculture has been overtaken by the services sector in terms of contribution to GDP in

most OIC member countries, it remains of strategic importance in efforts to promote economic

growth and poverty reduction as noted in a number of studies. For instance, Hazell (2006) cites

econometric studies which generally find high poverty reduction elasticities for agricultural

productivity growth. Thirtle et al. (2005) also estimate that a one percent increase in crop

productivity reduces the number of poor people by 0.72 percent in Africa and 0.48 percent in

Asia. Despite this, the sector has been out-performed by other sectors in most OIC member

countries. As noted in the COMCEC Outlook 2017, growth rate in the sector in the past two

decades averaged 3.51% compared with 4.25% overall growth in the OIC economies, an

indication that the other sectors contributed more to growth.

Furthermore, most OIC members recorded trade deficits in agriculture and the total deficit

amounted to about 63.3 billion US Dollars in 2016. This does not only put a strain on foreign

exchange resources of the affected countries but also makes them highly vulnerable to global

food price shocks. Increasing domestic agricultural output and productivity is, therefore, critical

in assuring greater social and economic stability. It is within this context that agriculture was

prioritized as one of the most important areas of cooperation by COMCEC at its Economic

Summit held in November 2009 in İstanbul.

The 1980s saw a shift in economic development paradigm in most developing countries,

including OIC member countries. The shift involved liberalisation of agricultural and other

sectors of the economies of developing countries, with policies which emphasised the primacy

of markets and prices in resource allocation being at the core (Akiyama et al. 2001). As a result,