Improving Agricultural Market Performance:

Developing Agricultural Market Information Systems

institutions and other non-government suppliers will fill the financing gap. These measures

created and/or accentuated risks faced by farmers and other players in agricultural value

chains. As demonstrated in discussions below managing the risks which emerged or increased

following liberalisation required better access to market information.

2.3.1

LIBERALISATION AND AGRICULTURAL MARKETING SYSTEMS IN

DEVELOPING COUNTRIES

Akiyama et al (2001) note that agricultural inputs and outputs marketing systems in most

developing countries changed following liberalisation of the sector. The reforms implied that

the policy and institutional levers employed by governments in promoting the production and

marketing of strategic food staples and export crops had to change. According to Varangis and

Schreiber (2001) the reforms included abandoning or significantly scaling down the following

policies:

Pan-territorial and pan-seasonal pricing policies, which involved setting the same producer

price for agricultural produce regardless of the cost of assembling from particular regions.

This policy action had been instituted to mitigate price risks, especially in agricultural

output markets.

Restrictions on the role of the private sector in produce marketing, largely because of

perceptions that private traders engage in speculation and tend to cheat SHFs.

Dominant role of government in the distribution of subsidised inputs to producers and often

on credit in order to minimise inputs access and affordability challenges.

Promotion of cooperatives as the critical intermediaries in the marketing chain, with

responsibility for distributing inputs, aggregating crops and trading with the marketing

boards.

During the pre-reform era, the policies mentioned above were underpinned by public sector-

oriented market institutions as commodity marketing boards, state-owned agricultural

enterprises and commodity regulatory agencies (COMCEC, 2017). By the late 1970s, these

policies and institutions had become an unsustainable fiscal burden, contributed to the real

decline in producer prices as producers bore the cost of such programmes, and failed to produce

any significant increase in per capita output in food and cash crops (Hubbard, 2003). As a result,

many countries in Asia, South America and Sub-Saharan Africa (SSA) undertook major reforms

in agricultural input and output markets.

Domestic marketing systems for export crops underwent considerable change in the 1980-90s,

coinciding with a period during which international stocks and price management mechanisms

were also dismantled (Shepherd and Onumah 2003). Similar reforms occurred in marketing

systems for major food staples in developing countries with the role of government in the

marketing of agricultural inputs and output being scale back significantly as is its role in setting

domestic producer prices for various commodities. Efforts were made to increase the role of the

private sector in agricultural markets (Greenhalgh and Kleih, 2000). It was for this reason that

governments in many developing countries restructured the public market institutions

mentioned above and initiated new, more market-oriented institutions such as MIS, WRS,

agricultural commodity exchanges and trade-friendly commodity standards (Coulter and