The transmission of world agricultural prices in côte d'ivoire

Authors: Lloyd, C.

https://www.scopus.com/inward/record.uri?eid=2-s2.0-0032997796&partnerID=40&md5=efd0e6f1ff07e53d445a41062250cb4f

Journal: Journal of International Trade and Economic Development

Volume: 8

Pages: 125-141

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Authors: Lloyd, T.A., Morgan, C.W., Rayner, A.J. and Vaillant, C.

Journal: Journal of International Trade and Economic Development

Volume: 8

Issue: 1

Pages: 125-141

eISSN: 1469-9559

ISSN: 0963-8199

DOI: 10.1080/09638199900000009

Côte d'Ivoire is typical of many countries in sub-Saharan Africa in that it is heavily reliant upon a small number of primary commodities for employment, national income and export earnings. Marketing boards, charged with the responsibility of stabilizing domestic prices have periodically levied export taxes, fixed producer prices and operated a stabilization fund in an attempt to ameliorate the impact of fluctuating international prices on the domestic economy. This paper develops a statistical framework in which the relative importance of price stabilization and revenue generation can be quantified. The method is applied to the two principal export crops, cocoa and coffee and results suggest that somewhere around two-thirds of world price shocks are absorbed by the marketing agency -the remainder is passed on to domestic producers. However, domestic producers pay a heavy price for stable prices, since they typically receive less than half of that offered on the world market, a figure far in excess of that required to establish revenue-neutral buffer stock funds. The corollary of our findings is that if the pace of development is to be accelerated by a more market orientated approach then international and national agencies would do well to explore the potential of (non-distortionary) alternatives to price stabilization. © Routledge 1999.

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