Introduction

Poverty especially in its extreme form remains among the major global problems facing
particularly Sub Saharan Africa. Sustainable economic growth is thus key to open up
development in the developing countries. Economic growth simply refers to an increase in
the country’s productive capacity over a given period of time, and measured in terms of
gross domestic product (GDP) as well as gross national product (GNP). Correspongly, from
an economic perspective, the standard of living can be measured or quantified using the per
capita income, which is simply the national income of a given country divided by its total
population. However within the development literature it has been argued that economic
measures are not wholistic yardsticks of development since they fail to take into account
some important aspects among others:

Income redistribution, an economy can be growing at the same time inequalities also
increasing

Quality of life, rarely captures issues such as environmental degradation, e.g land
degradation, air pollution and water pollution which affects longevity of human life

Does not take into account gender relations, for example women contribute a number of
chores at household level which are not captured under economic measures of growth.
Besides, it does not show which gender is producing the goods and services. It could be the
gender productivity gap is higher and hence increased gender inequality, however this is
not highlited in the GDP

Exploitation – fails to take into account power relations. Good and services could be
increasing yet levels of exploitation which affect workers’ dignity, happiness and health etc
could be on the rise. Such exploitation is not captured under these economic measures of
development.
Though there are several limitations of looking at development from a quantitative
(economic) point of view, it has generally been agreed that growth is an important factor in
accelerating poverty reduction. For example, jobs are needed to lift lives out of poverty, and
these jobs can only be created in a growing economy. Furthermore, this growth can be
achieved among others by identifying or exploring different sectors or engines of growth.
Africa, as an example has many sources of growth especially that it is predominantly
endowed with primary sectors. One such primary sector that is predominant in most
developing countries is agriculture. It has been argued that three quarters of the world’s
poor live in rural areas and they are dependent directly or indirectly on agriculture.
Therefore, it is imperative for students to critically study this primary and rural sector in the
context of development.

Role of agriculture in developing economies

Though developed countries have significantly reduced their dependence on agriculture,

economic history has demonstrated that agriculture played such an important role in their
development trajectory. In other words, agricultural development played a significant part
in laying a foundation for structural transformation. For example, Great Britain was the first
country to attain industrial revolution mainly thanks to the preceding agricultural
revolution. Furthermore, in some of the newly industrialized countries such as South Korea,
Taiwan etc agriculture was also key. However, many developing countries at independence
were to a large extent inspired by the dominant modernisation theories of the 1950s which
especially favored industrialisation over agriculture. Agriculture was perceived as a slow
sector in addressing the structural challenges of developing economies. Industrialisation
was on the other hand seen as a sector which symbolizes modernity and rapid economic
growth as well as poverty reduction. It is thus no surprise that sub Saharan African countries
like Zambia embarked on import substitution industrialisation (ISI) strategies. Despite this
attempt, most developing regions especially sub Saharan Africa have continued to largely
depend on agriculture. It follows that in such developing countries ,the role played by
 agriculture in structural transformation as well as poverty reduction can therefore not be
overemphasized. Its role could include some of the following ,

Contribution to economic growth- Given the narrow industrial base in some developing
countries, agriculture therefore is a strategic contributor to Gross Domestic Product (GDP).
Source of food sufficiency and security- a healthy population is indeed a productive one,
and food is an important factor in enhancing a productive population. Furthermore, a
developed food system would result in an increase in food supply which in turns brings
down food prices (food inflation). Stability in food prices would also to a large extent
determine the stability of industrial and service sector wages
- Contribution to employment- . With many developing countries having challenges of
unemployment, agriculture can be a very important sector in employment/job creation.
- Source of labour – in the initial stages of development, it has been argued that there is
often more concentration of labour in agriculture than other sectors. Given this surplus
labour, agriculture is an important contributor of labour to other non agricultural
sectors.
- Source of foreign exchange – it is arguably true that most developing countries are
largely dependent on agricultural commodities exports. In this way, increasing
agricultural exports could earn more foreign exchange vital for the growth of other
sectors in the initial stages of development.
- Source of raw materials – the sector creates important linkages (forward) with other
sectors notably industry through it is role of providing raw materials.
- Source of market - the sector also provides important linkages (backward) by
demanding goods from other sectors.
- Source of savings through taxation

Basic characteristics of the agricultural and rural sector

Agriculture though an important engine of economic growth and rural development, it has
generally certain characteristics that distinguishes it from other sectors such as industry. These
characteristics are crucial for policy makers to know how the sector performs in relation to
others, and also how different economic agents, such as consumers and farmers and other
groups such as the , poor and the rich are affected differently within the sector. At the centre
of these characteristics are the demand and supply side factors .

Given these two factors, let’s firstly attempt to consider the nature of demand of agricultural
commodities in the context of elasticity of demand. Basically, the interest is to understand
how the quantity demanded or demand of a commodity responds to changes in other variables
(such as price, income etc), of course holding other things constant. If the quantity demanded
or demand of a product changes proportionately with changes in for instance price or income
then it follows that such a product is price/income elastic, respectively . However, if the
product's quantity demanded or demand does not change proportionately to changes in price
or income, then that product is price/income inelastic respectively.

Generally, the demand for agricultural commodities tends to be inelastic. However, caution
has to be applied, it is not all agricultural commodities that are price or income demand
inelastic Take for instance, rice and beef, the former will definitely have a lower income
elasticity of demand while the latter will have a higher income elasticity of Demand. The
reason being that compared to beef, maize or staples tend to be inferior commodities. By the
way, inferior commodities are those whose demand or consumption reduces as income
increases, and the opposite being true for superior goods. It has to be emphasized
however,that for the most part demand for food products is inelastic. Take maize meal for
instance, in Zambia a household whether rich or poor will rarely increase the number of bags
purchased if the price of maize meal goes down, , similarly they are still likely to purchase a bag
even if the price rises. An explanation to this is that food is a necessity and households will most
likely just purchase enough for sustenance regardless of the price or income levels.
Nonetheless, income elasticity of demand for food differs between the poor and rich
households. Put differently, more than the rich households, the poor are faced with a high
income elasticity of demand. This could be supported by Engel’s law, which argues that the
poor spend a bigger proportion of their income on food..

Apart from consumers, farmers are also affected by the elasticity of demand of a given
commodity they are supplying. For example, a commodity whose demand is inelastic does not
proportionately increase revenue for farmers when the price of that given commodity
falls,similarly, if the income of consumers rises the farmer doesn’t benefit proportionately.
However, for commodities that are more elastic, the opposite is true.

By and large, when agriculture is compared with other sectors such as industry, it is faced with
an inelastic demand. This in part explains the unfavorable terms of trade experienced by many
developing countries that export agricultural commodities.Basically, terms of trade can be
looked into two ways, international and domestic (intersectoral). At the international level, it
simply implies the price of exports relative to the price of imports. Domestic or intersectoral,
here the comparison is made between two sectors. In this case the prices received by the
agricultural sector (rural) in relation to the prices paid by the agricultural sector to other non
agricultural sectors(urban) .

On the supply side, we are interested in understanding the nature of supply within agriculture
and also in comparison with other sectors. While quantity supplied of a given commodity is
determined by price, there are other factors which influence or change supply and include
some of the following:

a) Number of producers /farmers – the number of farmers producing a given commodity

will entail an increase in the supply of that product. An increase in the supply of a
commodity will in turn bring prices down. Taking Zambia, as an example, there are
commercial farmers, emergent, and small scale farmers. The majority of the farmers of
course being small scale. Incidentally, these small scale farmers are responsible for the
supply of the most staple crops such as maize. It can be argued that in many instances
these small scale producers appear to face a near perfectly competitive market. Some
 of the characteristics of a perfectly competitive market includes, supply of homogenous
products,many buyers and sellers, and also free entry and exit.
b) Technology
c) Price of inputs- This determines the cost of production,for example reduced input prices
increases the supply of agricultural commodities. It has to be noted that land is the most
important input or factor of production in agriculture. It entails therefore that to make
it productive it has to be combined with other inputs such as capital and labour.
Nevertheless, even if prices of these other inputs such as labour and capital were to
reduce, supply in the short run will not increase more correspondingly in agriculture as
it would do in industry,for example. This could be explained in terms of diminishing
marginal returns that are more common in agriculture than industry. . The law of
diminishing marginal returns simply states that any additional units of the variable
inputs to a fixed input, holding other things constant,will not lead to an additional
increase in yield or output. In other words, instead of yields or output increasing with
each addition variable input, the opposite may even occur.
d) Weather- compared to industry, agricultural production or supply is more likely to be
affected by weather. This to a large extent particularly in Sub-Saharan Africa entails
agriculture is seasonal. This also means that supply in agriculture tends to be
unpredictable or uncertain. Further, the supply of agricultural commodities is affected
by the fact that these commodities are biological,,perishable and tend to be bulky. The
perishability and bulkiness of such commodities pose some logistical challenges such as
storage, transport etc for many farmers in developing countries.

Generally speaking, supply in agriculture appears to be inelastic. However, within the sector,
time matters. For example, in the short run where it is not possible to alter the factors of
production, supply in that case tends to be inelastic, while the opposite is true in the long run.
Furthermore, the more perishable a product is the more supply inelastic and the converse
being true. Inter sectoral comparison, agricultural supply appears to be more inelastic than
industry.
Traditional(rural) vs modern(industrial) agriculture

By and large, agriculture is regarded as a rural economic activity in comparison with industry
which is more urban. However, agriculture has tremendously transformed into a complex
industry oriented sector particularly in the developed world. In other words, it is no longer that
simple sector which has a weaker industrial orientation . This has in turn resulted in rapid
agricultural development in developed countries. While this is true for developed countries,
agriculture in many developing economies has for the most part remained traditional. Thus, for
policy makers to initiate sustainable agricultural development in the global South, it is
imperative to understand the characteristics of the rural or traditional agriculture in relation to
the modern or industrial agriculture. There are so many distinctions that can be made between
the two, some of them inlucde the following :

Basically, traditional and modern agriculture differ in terms of scale or size. Modern is
associated with large farms which are predominantly large scale producers.in contrast,
traditional or rural agriculture is associated with small farms. There has to be a clear distinction
however in this context between what is meant by small and large farms. It is not necessarily
the amount of land that distinguishes the scale of production. In this case, a distinction is made
between intensive and extensive systems. The former simply means maximizing output from a
given piece of land while the latter would entail bringing more land into production. An
example of an extensive farming system is the widely practiced shifting cultivation system
especially in the northern part of Zambia. Small farms thus are likely to be associated with
extensive farming compared to the modern or industrial agriculture. The challenge with
extensive farming and hence small farms is that land is fixed and it has a number of competing
uses meaning as alternative uses for land are found there is a threat to extensive farming
practiced by small scale or rural farmers.

Apart from the scale of production, profitability is another distinction between the traditional
and modern agriculture. Whereas traditional agriculture tend to be based on a more
subsistence motive, modern agriculture is commercially inclined. This is evident also for
example in the type of crops grown . Modern agriculture is more inclined towards high value or
cash crops whereas subsistence towards food crops(which are mostly for own consumption).

Furthermore, modern agriculture tends to be capital intensive compared to traditional,and

there is wide application of science and technology. This also entails that modern or industrial
agriculture is chemical intensive (application of fertilizers, pesticides, herbicides etc)

In terms of the actors, traditional agriculture is more of family(household) whereas industrial

(modern) agriculture tends to be in most cases by corporate entities. Thus, traditional relies on
household labour and thus little Specialization compared to the modern.

Economies of scale also certainly play differently in these two sectors(traditional and modern) .
Generally, when output or production of a commodity is increasing the usual expectation is for
the unit costs that a firm incurs to increase as well. However, economies of scale are associated
with declining average unit costs as the firm or farm in this case is expanding the production of
a product. Generally speaking, large farms (modern) are more likely to experience economies of
scale than small farms(traditional). Economies of scale could include the following:

a) Internal economies of scale- these are looked at from the perspective of a single firm or
farm. In this case, they simply refer to the benefits(decrease in unit costs) that accrue to
a particular firm as it increases or expands the production or output. The economies of
scale could be triggered by improvements in for example, managerial, technical,
marketing, financial etc
 b) External economies of scale - here the focus is simply not on an individual firm or farm,
rather the collection of firms which makes up the industry. In this case, focus is on the
benefits that accrue to a firm as the whole industry expands.

Agricultural and rural development policies

By now you are familiar with the complexities and peculiarities of the agriculture sector , of
course your knowledge on the demand and supply side aspects is important in understanding
such. Given its sensitive nature, governments in both developed and developing countries
appear to heavily intervene in this sector. Policy formulation and implementation is thus
important to address the constraints faced within the sector. While policies can be designed
(formulated) by individuals, corporations etc, in this particular topic the interest is especially at
governmental level. A policy is basically a set of guidelines or course of action intended to
address some problems in a given sector. Among other features, a policy includes constraints,
objectives and instruments. For developing countries especially sub-Saharan Africa which to a
large extent is still having challenges of rural poverty, agricultural and rural development
policies are even more important. Well formulated policies could serve as useful catalyst in
rural development. Though policies are important,it has to be noted that countries have
different problems that they want to address in as far as agriculture and rural development are
concerned. This entails that countries have different policies as well as objectives. The policy
formulated to address the Zambian agricultural and rural sector could be different for example
from the one set by South Africa. It is not only at the country level where policies could be
different but also successive governments within a country could have different policy options.
Take Zambia for example, the policy objectives of colonial administration in terms of
agriculture and rural development were different from the immediate post colonial
government, For example, at Zambia’s independence, there were many constraints that shaped
or saw the need for policy intervention in agriculture and rural development. Below are among
the factors that shaped this policy trajectory:

a) Rural-urban migration- under the colonial administration, developmental policy seem to

have created a bias between rural and urban, with the latter rapidly progressing at the
 expense of the former. In other words, rapid development and urbanization was taking
place along the line of rail. This unbalanced development strategy led to wages rising in
urban areas at the expense of rural areas which are predominantly agrarian. This
imbalance meant a number of people started leaving rural farm jobs or activities in
search of industrial jobs were wages were relatively higher. In rural urban migration,
mostly men and the vibrant youth were the ones migrating, leaving behind the aged or
other less productive members of the households. In this vein, productivity in rural areas
slowed down, in other words, this trend could increase the productivity gap between
rural farms and urban commercial farms hence increasing poverty levels in rural areas.
b) Rural poverty- the colonial neglect of rural areas exacerbated high poverty levels in rural
areas of Zambia. There appears to have been low resource allocation to rural areas which
where not of economic interest to the colonial administration. To date the colonial legacy
is still felt with high rural poverty compared to urban.
c) Rising demand for food in urban areas – the concentration of large farms or commercial
farms as has already been stated was along the line of rail. In addition, these farms were
largely owned by white commercial farmers who after independence most of them left or
migrated to southern Rhodesia (Zimbabwe). Given an increase in rural urban migration,
declining agricultural productivity in rural areas and the migration of some of the white
commercial farmers, there was a gap in terms of food supply to meet the industrial urban
demand.
d) Declining large farms along the line of rail- as mentioned above, there was an exodus of a
number of expatriate or white commercial farmers. These operated mostly along the line
of rail meaning their decrease in number meant food shortages. In this regard opening up
rural areas was among the policy options available to provide cheap food to a rapidly
growing urban areas.
e) Regional imbalance-concentration of development priorities such as resource allocation
and other forms of investments centered around urban areas which were of strategic
interest to the needs of the colonial administration. This widen the gap between urban
and rural regions in terms of development.
Despite the differences in policy interests or objectives across countries or governments,
generally speaking in the context of particularly developing countries agricultural and rural
policies might seek to achieve some of the following:

a) Improving living standards of the rural poor

b) Raising incomes
c) Enhancing agricultural efficiency and productivity
d) Promoting nutritional security
e) Enhancing national food self sufficiency and food security
f) Competitive agricultural exports
g) Contributing to economic growth
h) Job creation
i) Sustainable agriculture practices
j) Rural industrialization

As already pointed out above, countries have different agricultural policies and certainly there
are so many policies a particular country can come up with. Here let’s consider a few among
others :

Pricing policy

Whether you are shopping at New Res supermarket or Soweto market, you are definitely
concerned among other things with the price at which a particular commodity is selling.
Similarly, if you are supplying a product, your concern would be the price at which you will sell
it. Certainly, holding other factors constant you wouldn’t be willing to sell the product at a
price below the cost you produced it. This goes to show the importance of price as a signal to
both the consumer and producer. For one thing, it has generally been observed that pricing
agricultural products is not quite easy and predictable. Here again remember the problems of
the sector from both the demand and supply side. Unlike industrial, agricultural commodities
are to a large extent subject to price fluctuations. Consider prices of most agricultural
commodities after a bumper haverst, prices of such commodities will go down to the
disadvantage of the farmers and other suppliers in the value chain. On the other hand, given
the seasonal nature of agriculture especially in developing countries, stocks of agro
commodities get depleted along the seasonal calendar thereby making prices of such
commodities to go up and thus affecting consumers. Therefore this makes it necessary for the
objectives of the pricing policy to achieve among others:

a) Price stability in the agricultural markets

b) To offer competitive prices to farmers so that they remain profitable and in production.
By guaranteeing better prices for producers, income levels rise in rural areas and hence
opening up such areas for further development.
c) The policy objective must also at the same time address the consumers in terms of
affordable agricultural commodities. In other words, reducing the prices of food for
example to improve the well being of consumers. Recall that the poor for instance
spend a bigger proportion of their income on food, so any rise in the prices of food
would have a huge impact on their budgets.

Policy instruments

To achieve some of the aforementioned objectives, governments can design different policy
instruments for instance:

a) Trade policy instruments – basically this concerns with how exports or more importantly
imports affect the domestic prices of agricultural commodities. Put differently, the price
of agricultural products imported or the volume(quantity) of imports of such products
have a huge impact on the domestic price. To alter or influence domestic price, a tariff
can be imposed. A tariff is simply a tax levied on imported goods in this case agricultural
commodities. Imposing a tariff on imports results in the domestic price being favorable
or in other terms cheaper than that of the imported commodities. The effect is that
domestic producers or supplies benefit from competitive domestic prices following the
imported commodities that have become expensive due to the tariffs. Furthermore,
another instrument that can be implemented is export tax. An export tax will
discourage exports of a particular strategic crop, it would make that product expensive
on the international market and hence less competitive. In this way domestic producers
 would be discouraged to export and hence stabilizing domestic price for that particular
product. This might not be rarely used as a policy instrument as it discourages domestic
producers however it might be necessary at times. For instance, in Zambia, maize is a
strategic crop, and there are times when the domestic stock or volume goes down, in
this case an export tax can be implemented to discourage exports and hence stabilize
domestic prices. The other way domestic prices can be influenced is through various non
tariff measures such as quota. Here the aim is to restrict the volume or quantity of an
imported agricultural product.
b) Sectoral policy instruments – here government intervenes directly in the sector through
the ministry in charge of agriculture. The respective ministry in collaboration with
Stakeholders comes up with Sectoral policies subject to cabinet approval. Among the
instruments that can be implemented are subsidies. Now a subsidy can be for producer
or consumer, and it can also be direct or indirect. Producer subsidies for example will
lower the cost of production and hence help farmers. On the other hand, consumer
subsidies help facilitate directly or indirectly leading to reduced commodity prices for
consumers. Subsidies have advantages as well as disadvantages. For example, one of the
strengths of a subsidy as already mentioned is that it reduces cost of production for
producers which in turn could lead to affordable products for consumers. However,
subsidies have been criticized especially in the developing world for being a burden on
the fiscal obligations of many developing countries. Additionally, it has been argued
that subsidies increase the tax burden since for the government to meet these
expenditures, it follows that taxes in some way have to be raised. Furthermore, it has
been argued that in most cases they don’t even reach the targeted or the poor that
needs them most but rather benefits the already established large farms. The other
instruments that can be used are price floor and price ceiling. Price floor is simply the
minimum price that is set above the equilibrium price, put differently, this simply means
that this is a price support which helps in prices not to easily fall below the equilibrium
price. The effect of this is that farmers or producers are protected from low prices on
the market. This instrument it has been argued leads to excess supply meaning the
 government agencies have to guarantee to purchase some of the excess commodity.
The challenge in some developing countries is storage, in most cases the commodity
goes to waste. Price ceiling is another instrument, this price is set below the equilibrium
price above which prices can’t rise. This is mostly set to favor consumers, it can be
regarded as an example of price control. This creates excess demand, as the price
below the equilibrium price discourages producers or suppliers. In trying to promote
consumer welfare, this actually distorts their welfare as there are shortages on the
market leading to smuggling and black markets. The other instruments that can be
designed are pan territorial and pan seasonal pricing. Pan territorial simply involves
having a uniform price across all the depots in the country whereas pan season pricing
involves maintaining a uniform prices throughout the seasons.
c) Exchange rate policy- this basically refers to the price of one currency in relation to the
other. Historically, most developing countries like Zambia had an artificially overvalued
exchange rate policy. This was to some extent good as their policy objective was biased
towards industrialization and so it was necessary to import machinery and other
industrial related raw materials. However, this policy resulted in among other factors
having non competitive exports. In other ways, an overvalued exchange rate makes the
prices of local commodities expensive on the international market and the opposite
being also true. Given this, governments especially those in developing countries must
strive to have a competitive exchange rate policy.

Marketing policy

Marketing is an important factor in as far as lifting farmers out of poverty is concerned.

Marketing brings together sellers and buyers, that is, it creates a transactional place where
buyers and sellers meet. The producer is concerned with how their commodities will reach the
buyers. Similarly buyers are concerned with how efficiently they can access commodities.
Agricultural marketing involves both input and product marketing. Input marketing is
concerned among other things the movement of inputs from the producers to the end users
who are the farmers. Efficient input marketing reduces the cost of production of a given
commodity. This simply means that producers are able to produce competitively. Thus reducing
marketing costs in input marketing is necessary for improving production. In as much as input
marketing is important, product (output) marketing is as equally important. Product marketing
is concerned with the movement of the agricultural commodities from the farm to the
consumers. Product marketing is very important as it determines to a large extent the income
for farmers and also the continued investment and productivity in the sector. Marketing
agricultural products is not as easy as marketing industrial commodities. Furthermore,
agricultural marketing in many developing countries has generally been argued to be poor.
There are many factors for this, but what stands out is lack of sound marketing functions.
Simply put, marketing functions are series of specialized activities performed as the product
moves from the producer through to the consumer, for example, storage, transport, processing
etc. In this way, marketing functions are key in the transformation of a commodity across time
and space, for instance in the following mannner:

a) Transformation- a commodity through processing is transformed into another usable

form. For example, maize processed into maize meal
b) Space – This simply means the product has to move from the region of production to
the region where it is needed by the consumers. In this case, transport is very important
c) Time – This means that agricultural commodities have to be readily available to
consumers through storage.

Marketing channels

Markets as has already been pointed out are areas or places where sellers and buyers meet. In
marketing of agricultural commodities, it is also vital to understand the different marketing
channels. It is important to understand these channels as they show how commodities move
from one area to the other and also importantly the agents or actors involved through the
different channels. Generally there are a number of marketing channels that literature has
presented for example,
 a) Village or local channels- these are local markets where the producers from within the
village interact with buyers in the same area or surrounding villages. These market
channels are ideal for short time marketing which basically involves more of selling and
buying of perishable products such as fish, vegetables etc. This market lack well
established marketing facilities to a large extent
b) Regional – These can be markets established in district or provincial centers. The
volume of buyers and sellers is huge. Market facilities are better developed compared to
the village markets.
c) National – this a huge market that brings in producers and buyers from across the
country. Marketing facilities are usually well established, and these markets are also
ideal for long periods or time (where less perishable commodities are traded)
d) International

In all this, the importance of the policy must be to link up the local or village markets to the
more efficient, profitable and competitive channels such as the national and international
through the value chains. Producers in rural areas can to a large extent be poverty free once
there village markets are fully linked or integrated to the larger and organized marketing
channels.

Objectives of marketing policies

A government can have different objectives for their marketing policies. However, some of the
following could be the objectives among others :

a) To reduce marketing costs

b) To stabilize the supplier of agricultural commodities
c) To improve delivery or supply of inputs
d) To increase the bargaining power of suppliers
e) To reduce food loss

Agencies and policy instruments

The marketing process is based on a number of actors or elements which can be grouped into
the following

a) Public agencies—before fully embracing free market economies, marketing boards were
very common instruments or agencies of agricultural marketing in a number of developing
countries. These marketing boards are usually parastatals that in most cases operate as
either monopolies or monopsonies in agricultural marketing. This simply means that such
boards dominate the buying or selling of agricultural commodities in the domestic and
international markets. One such parastatal in the case of Zambia was National Agricultural
Marketing Board (NAMBOARD) which specialized in the marketing of particularly essential
agricultural commodities. Also note that NAMBOARD was a single dominant player in both
input and product marketing. However, with a number of countries having liberalized their
economies, the role played by state marketing boards has diminished this has been
replaced by the private or semi autonomy government institutions (these are not
monopolies or monopsonies)
b) Buffer stock agencies- unlike state marketing boards which monopolized agricultural
marketing, buffer stock agencies tend to operate more automously and hence they face
competition from other actors in the market. The role of these agencies is to operate and
manage the buffer stock, this being in respective to agriculture, any commodity that is
strategically reserved, for example maize in Zambia. Note that a government agency can
operate a buffer stock or the private sector on behalf of the government. However, there
seem to be limited participation of private sector in buffer stock operation and
management due to the high opportunity costs associated with management of buffer
stocks. The role of the buffer stock agency is basically among other factors to purchase
strategic agricultural commodities, and also storage of such commodities. In times for
example of a bumper harvest the agency offers a price at which it would buy some
specified quantities of commodities, and similarly in times when the stock declines the
agency can offload the stock on the market hence stabilizing prices. Note that there are
other private actors that compete with the agency in the purchase of crops unlike the state
run marketing boards which in most case monopolized marketing.
c) Private sector- with liberalized economies in many developing countries, many private
entities have also dominated the marketing process.
d) Cooperatives- these are basically voluntary organizations established by a group of
individuals for a common interest. Cooperatives help among others to increase the
bargaining power for the benefit of individual members as well as helping in the
improvement marketing facilities in that way reducing marketing costs for the members.

Other instruments that could be used includes:

a) Trade licensing
b) Market regulations
c) Establishment of marketing facilities (e.g communication, storage etc)

Agricultural and rural credit policies

Recall that many farms in developing countries particularly Sub Saharan Africa are small farms
compared to large farms in developed countries. Similarly, urban areas of developing countries
appear to have large farms compared to the rural areas (small farms). Recall also that what
distinguishes a large farm from a small farm is not necessary the amount of land available for
production. In this regard, an understanding of intensive and extensive agricultural systems
could be helpful. Large farms tend to be intensive, meaning productivity is very high on a given
piece of land whereas extensive requires more land for production. . In short, productivity is
higher in intensive farming (associated with large farms) than in extensive farming (small
farms). One of the explanations to the huge productivity gap between the two farming systems
is capital formation. Large farms based on their economies of scale be it financial are able to
mobilize savings and higher capital formation. Given that most small farms in developing
countries are based in rural areas associated with low savings and hence low capital formation,
it means agricultural productivity will be lower and hence perpetuating rural poverty and
underdevelopment. There are many reasons as to why such areas or producers are unable to
attract much savings and subsequently sound investment in agricultural development. One
critical factor is lack of access to credit. Where access can be there it is usually expensive and
low. For example in many rural areas there are very few or no formal lending institutions at all.
What might be found are small informal individual or group lenders. Formal lenders are not
willing to lend to small farms which in most cases lack collateral. Therefore governments in
developing countries could formulate effective credit policies with the view of supplying cheap
credit in order to achieve objectives like:

a) To increase agricultural productivity and production

b) Income redistribution
c) Increase savings
d) Increase capital formation

In order to efficiently extend credit not only credit but also cheap credit in that regard
governments have to implement creative policy instruments. Certainly different governments
would set up different policies to actualize this. Nevertheless some of the policy instruments
that could be available could include the following :

a) Establishing agricultural and rural specialized lending institutions

b) Subsidized credit
c) Interest rate controls
d) Providing incentives for establishment of rural micro lending facilities

Research and extension policies

For rural development to be accelerated, certainly agricultural development though not

sufficient is cardinal in rural areas. However, agricultural productivity appears to have been
very low in the rural areas of developing countries. Recall the differences between traditional
and modern or industrial agriculture. You will notice that whereby the latter has increased
productivity and production owing to among factors better or improved agricultural practices,
the former has not correspondingly achieved this to a large extent. Indeed there are many
factors that could be attributed to such differences but one crucial aspect has been limited or
low dissemination of, for example, scientific knowledge and breakthroughs to the rural areas.
Thus the importance of agricultural research and extension policies cannot be overemphasized.
The objective of such policies could be to:

a) increase agricultural productivity through scientific knowledge

b) Reduce poverty by linking farmers to the market(it is through extension that farmers or
rural dwellers learn about the important markets available to them).
c) Provide early warning (in the light of climate change, rural farmers need effective early
warning information)
d) Develop sustainable agricultural practices

Research is simply about generation of knowledge breakthroughs in the agricultural sector such
as improved varieties, technologies, and also in this era of climate change, environmentally
responsive agricultural practices. While research is more concerned with knowledge resulting in
the development of improved varieties and technologies, extension involves dissemination of
such research and development to the end users, for instance, rural farmers. The package of
extension could involve both the software(dissemination of knowledge) and
hardware( provision of tangible resources/inputs to the rural areas). In the developed
countries the public and private sector invest huge amount of resources in research and
development. However, it appears there is very little allocation towards research and
extension in many developing countries. In research and extension, the debate seem to also
focus on which actor for example between the state and private is key. There is no clear answer
here since these two main actors have different objectives. For example, unlike the state, the
private sector whose primary objective is profit is more likely to spend huge sums of money in
research and development to capture the targeted market. Thus, if many governments in
developing countries provided a conducive environment, the private sector would be a very
efficient and important agent in spearheading agricultural research. However, the argument
has been to what extent would the rural poor access the research and extension
breakthroughs from the private sector? Since as already mentioned, private sector is motivated
by profits and they might seem to invest in areas promising high returns for their investments,
and low income rural areas might not be a priority. In this case, it seems that the public sector
in developing countries is crucial in the delivery of research and extension services to the rural
poor. Among the reason for this argument is that research and extension provided by the state
would be more often treated as public goods whereas that from the private sector being
private good. Nevertheless, both actors (public and private) have their own strengths and
weaknesses, and hence must complement each other. For example the private sector being
more profit oriented could have a comparative advantage over the state in investing in
research and development. However, the state being more social welfare oriented might have
the comparative advantage over the private sector in extending such knowledge and
breakthroughs to the rural poor.

In this case, the government can use policy instruments such as:

a) increasing budgetary allocations to public research institutions

b) Establishment of scientific research institutions
c) Creating a conducive environment for private research institutions
d) Employing more extension workers
e) improving physical infrastructure in rural areas

Structural and land policies

As you have seen by now, there are several policy options available to a developing country in
as far as improving agriculture and subsequent rural development are concerned. Land policy is
another important policy option for developing countries to accelerate agricultural and rural
development. Land is a crucial input or factor of production. Take note that land does not only
refer to cultivation but it also encompasses the resources on that particular piece of land. Think
of rural women who would want to grow some vegetables for sale to the urban market. You
know for example, here in Zambia rural agriculture is mostly seasonal (rainfed). In this
instance, these women farmers not only need land to grow the vegetables but would also need
to access other resources that constitute that land such as a stream or river for irrigation.
Continuing with this example, it is possible that once these women have access to the land they
can grow their vegetables, however are they guaranteed that they could still grow vegetables
on that piece of land the following year? or can they start up a chicken run on that particular
land the following year? They extent to which they are guaranteed to diversify or continue with
the same business depends on the rights they have to that piece of land. This goes to
demonstrate that in as much as access to land is important, the rights or system of control
associated with that access are very important. In short, who controls the land that the farmer
has access to? This makes the issue of land tenure a critical one in coming up with land policies
or reforms. Land tenure simply means the type of land ownership and its associated rights.
Below are some forms of land tenure:

a) Open access – no one owns the land or its associated resources, however no one is
excluded from accessing that particular land.
b) Communal – if the Ruins were to be a community for example, it means that community
members within the Ruins have access to the land and the resources therein. Consider also
if the Goma streams were part of the Ruins village, it would mean that community
members have the right of access, for example for irrigation, fishing etc. However, this form
land tenure excludes non communal members from accessing the land. For example,
farmers or individuals from the New Res village would be denied access or excluded to land
and its resources by the Ruin community members.
c) Private- The person who owns land under this type of tenure has complete rights to the
land, meaning they have the right to dispose it off for example through rents, sale etc. this
is the type of land tenure system that is associated with title deeds to the land one has
access to.
d) State – This land owned and controlled by the central government or local government.

The objectives of land policy could be several but not limited to the following :

a) Reducing poverty
b) Equitable land allocation
c) Securing land / property rights
d) Wealth redistribution
e) Food security

Similarly the instruments for such policies could include :

a) Land resettlement schemes
b) Land redistribution
c) Tenancy reforms - This basically means that landowners who have rented out their land to
give tenants more freedom or rights on the land they have access to. Productivity would be
enhanced on the rented land if tenants are given more land rights or security.

Economic liberalism vs agriculture and rural development

Background

As senior students, you are already aware at this juncture that development as a concept is
multidimensional. Furthermore, this multidimensionality could also mean that there are
different stakeholders or actors in development. In this case, if two actors are teased out, that
is the state and the market (private sector), you will note that in the development discourse
there has been debates about which of these two actors is better placed in economic
development. Statist proponents argue that the state can not be relegated to the role of just
providing an enabling platform or environment for the market to flourish but rather the state is
a major actor in business. In other words, one of the arguments is that the state has a major
role in the allocation of scarce resources than the private sector. On the other hand, liberalism
tend to favor the market over the state. Among the claims being that the market or private
sector motivated by profits is better placed to efficiently allocate resources for societal
progress. With this debate in mind, it appears that many developing countries particularly in
Sub Saharan Africa at independence adopted a statist approach. That is, the state had a major
role to play in the economy. Take Zambia, as an example, the post colonial government was
heavily involved in business. With nationalization becoming popular especially following the
Mulungushi and Matero reforms, the Zambian government heavily intervened in the economy.
Supported by booming copper prices in the late 1960s, the government established and ran
many businesses ranging from mines, airline (e.g. Zambia Airways) to even supermarkets (e.g.
Mwaiseni stores)! As long as there was a commodity boom, that is, price of primary
commodities rising on the international market, many governments in Sub-Saharan Africa, for
example, would earn enough foreign exchange to fund and run state owned enterprises. In
other words, there was very limited space for the market or private sector. However, the burst
in the commodity bubble in the 70s signaled the beginning of economic and social problems for
a number of developing countries. Not only was this the beginning of economic crises but also
the role of the state in managing the economy was challenged.

The failure of many Sub-Saharan African states like Zambia in the 70s in managing the
economy in general and enterprises in particular could be explained in terms of both internal
and external factors. The internal factors, taking Zambia as an example, included among others:

a) Poor management of state owned enterprise due to :

1) Ill qualified staff (recall for example in Zambia most experts had left after
independence, and in the early 70s there were very few graduates from
either the University of Zambia or other learning institutions)
2) Over staffing
3) Subsidizing loss making parastatals
4) Under capitalization
b) Poor and inappropriate policies – such as the import substitution industrialization (ISI)
strategy which many scholars have argued was an inward looking strategy which was less
effective compared to the outward (export) looking strategy pursued by Newly
Industrialized Countries (NICs) such as South Korea, Taiwan etc

Coupled with some of the above internal challenges, the state in many developing countries in
the 70s for example failed to resiliently respond to external shocks such as:

a) World economic recession

b) Reduced global demand for primary commodities such as copper
c) Rising interest rates in the developed countries due to changes in their policies (this
entailed pressure on the loans of developing countries)
d) Rising oil prices
e) Rising global food prices

Structural adjustment programme (SAPs)

The above mentioned problems either internally or externally induced challenged the
effectiveness of the state as a major actor in the economy. These crises led to a number of
developing countries to be heavily indebted. At the same time, this led to the dominance or
rising influence of neo liberalism which is market or private sector oriented. Of particular
interest was the rise and influence of two key neoliberal institutions being the International
Monetary Fund (IMF) and the World Bank(WB) on the developing economies. Given that many
developing countries like Zambia were caught in a debt crisis, the only way out was to borrow
in order to keep their economies running. Debt was inevitable since these countries couldn’t
earn more foreign exchange owing to the declining prices of their primary exports such as
copper on the world market. At the same time such countries had to import for instance fuel
whose price had gone up on the international market. As most economies of developing
countries were in shock and indebted, they seemed to have no choice but to approach IMF for
assistance. To enhance the credibility of these developing countries to the private and official
lenders, the IMf/WB had to attach conditionalities for getting new loans or funding. These
conditionalities were the basis for the structural adjustment programme (SAPs). Desperately
for loans, many sub-Saharan African governments appear to have had little choice but instead
adopt the SAPs. This to a large extent seems to have been necessited by the fact that lending
countries or private sector were not willing to lend to these economically struggling countries
unless they were on an IMF/WB structural adjustment programme. Adjusting countries had to
agree to an economic recovery pioneered by predetermined prescriptions of the IMF/WB.

SAPs comprises the demand and the supply sides, or in other words, stabilization and
adjustment. Stabilization policies were the first set to be implemented, and these are usually a
short term measure aimed at addressing shocks. The economic shocks such as high debt
payment obligations coupled with shortages of foreign exchange due to declining demand in
primary commodities led for example to macroeconomic instability in the domestic economy as
well as dwindling international reserves. Thus one of the major objectives of the stabilization
policy was to restore stability in macro economic fundamentals such as:

a) Reducing inflation
b) Improving balance of payments position
c) Reducing budget deficits

On the other hand, adjustment is more of a long term and tackles the supply side. While IMF
was more concerned with the stabilization WB was more on adjustment. Adjustment is more
concerned about growth and developing a competitive export economy. Both the stabilization
and adjustment are such important components of structural adjustment programme. For
example, economic growth which is a supply side can only be sustainable in an economy with
favorable balance of payments and less inflationary pressures (demand sides).

The topic of structural adjustment is not necessarily new to most of you as it was in one of the
foundational courses. However, this time around you have to critically consider it in the context
of agriculture and rural development in developing countries.

A structurally adjusting country had to adopt a set of predetermined IMF /WB conditions
including some of the following:
a) Tight monetary/credit policy – to reduce on inflationary pressures governments had to
among other things reduce money supply. For example, there was a tendency among some
developing countries ‘ governments to print money besides borrowing which among other
factors fueled inflation. . In the short term this measure of reducing money supply is to
reduce inflation, for example. But at the same time it is important to appreciate the
inverse relationship between money supply and interest rates. Interest rates determines
the cost of borrowing, and if the money supply is low this leads to a credit squeeze and
hence interest rates rise.
b) Devaluation of the currency- the background to this is that most developing countries
including Zambia tended to have overvalued local currencies. The value of the currency was
not determined freely by the market forces (supply and demand). For developing countries,
the logic behind an overvalued currency was to fund imports such as machinery that was
needed for their import substitution industrialization agenda. However, an overvalued
currency meant that while imports were cheap the exports on the other hand became
expensive. To achieve a favorable balance of payments or to reduce budget deficits, a
country must export more hence the demand under structural adjustment programme for
currency devaluation.
c) Fiscal discipline – This means reduction in public expenditure, recall that Zambia for
example had budget deficits because of increased government expenditure associated with
low foreign earnings. So in such cases to meet the deficit the country had to borrow locally
and internationally increasing the debt burden in the process. Public expenditure had to be
reduced and also increasing public revenue through for exampe:
5) Removal of subsidies
6) Wage freeze
7) Public service job cuts
8) Introduction of user fees for public services
9) Tax reforms
c) Privatization- many state owned companies in developing countries were not only
mismanaged but also running on losses. In this vein, under the SAPs conditionalities,
 the economy had to be dominated by the private sector hence public enterprises had to
be sold off. The rationale was that the private sector being more profit oriented would
be more efficient in the management and operation of enterprises.
d) Trade liberalization – removal of any forms of trade protectionism or barriers such as
tariffs, quotas etc so as to expose the domestic economy to international competition. .
e) Agricultural reforms – under the adjustment conditions of the WB, one of the
requirements was for the adjusting economies to increase their export of agricultural
commodities and other primary commodities. To achieve this, reforms in the agriculture
sector for example were necessary to make it more competitive which includes:
1) Production of cash crops
2) Export oriented agriculture through among others currency devaluation
3) Price decontrols/deregulation – in many developing countries Zambia
inclusive, price controls in agricultural commodities especially essential
ones such as staple foods were common. Such measures in the long run
discouraged producers and subsequently production. Hence this
measure aims at abolishing government interventions in the prices but
rather to allow prices to be determined by market forces.
4) Agricultural marketing reforms- elimination or reduction of agricultural
state marketing boards and allowing for private sector participation in
agricultural marketing. Put differently, adjusting countries were required
to liberalize agricultural marketing.
5) Reduction or elimination of subsidies
f) Financial reforms – for instance interest rate liberalisation

Agricultural trade
Given that most developing countries especially in Sub-Saharan Africa appear to be
characterized with a narrow and usually uncompetitive export base, trade in agricultural
commodities remains critical for such countries. Correspondingly, trade in agricultural
commodities is necessited by the fact that many of these developing countries are generally
agrarian economies. For example, the importance of agricultural trade in commodities such as
coffee for Burundi or tobacco in the case of Malawi. In other words, one of the critical roles of
agriculture is to generate savings and investment through trade. Economic history also seem
to suggest that developed countries such as Britain or USA for the most part generated savings
from agricultural trade. Thus savings from agriculture among other factors paved a way for
their industrialization. Therefore, in the context of a developing country like Zambia which has
since independence heavily relied on copper as the main revenue earner, agriculture offers a
great opportunity for export diversification and competitiveness.

Domestic and international trade

Generally, low income countries tend to have what appears as a small and sometimes
inefficient domestic market. Inefficient in the sense that marketing facilities might not be well
developed or functional like those in the developed countries and other emerging economies.
Recall, as an example, under economic liberalism (the preceding topic) there has been an
emphasis among others on liberalizing agricultural domestic markets in developing countries.
Zambia like many other Sub-Saharan African countries has, in this regard, to a large extent
liberalized agricultural trade. This means that besides the public sector, there is an increasingly
emergence and dominance of the private sector in agricultural domestic trade. For a low
income country, the benefits of domestic trade to both agro producers and consumers might
include some of the following:

a) A ready market – commodities such as food crops or staples might have a wide and ready
market domestically. Small scale farmers appear to be the majority in many developing
countries, and usually dominate the production of a national’s food or staples. Unlike cash
crops, these food crops tend to have a wide and ready market domestically. A ready
 market under these circumstances ensures the increased participation and integration of
small scale farmers in the local supply chain.
b) Less competition –in contrast to domestic, competition is stiff in international trade
especially as dominated by commodities from some developed and other emerging
economies.
c) Not easily affected by global price fluctuations – you already know by now that prices of
agricultural commodities are characterized by major price fluctuations. In this regard,
functional domestic trade might shield domestic producers or consumers from price
fluctuations on the international market.
d) Commodities traded in local currency – one of the challenges faced by both consumers and
producers in developing countries are volatile exchange rates which affect their
participation in global trade. For example, think of appreciation of a local currency, this
would make the prices of exports from a given country expensive on the international
market. Domestic trade in this vein eases or lows the cost of doing business as the
exchange of commodities is in local currency.
e) Guarantees the supply of safe and culturally acceptable commodities
f) Patriotism – consumption of local products under domestic trade in many developing
countries sends a sense of national and economic patriotism, for example in many Sub-
Saharan Africa countries , there appears to be an emergence of ‘buy local build local’
campaigns.
g) Saves foreign exchange – a well established domestic market reduces the country’s imports
thus saving on foreign exchange.

In as much as domestic trade in agricultural commodities offers benefits to both producers and
consumers, and a country as a whole, it is not a sustainable way for growth and development
for low income countries. There are many compelling arguments as to why this might be the
case. For example, domestic producers or consumers could be affected in some ways such as:

a) Narrow range of commodities – local or domestic trade might offer limited varieties of
commodities hence reducing on consumer welfare.
b) Commodity shortages – given low levels of agricultural producvitiy and production in many
less developing countries, it follows that domestic trade would not be able to adequately
respond to consumer demand. For instance, the shortages of onion on the domestic
market in the recent past in Zambia.
c) Increased risks – concentrating on a singular domestic market could expose the producer
to increased risks.
d) Smaller market – most domestic markets in developing countries tend to be very small and
thus give little incentives to the producers. A small market in this case would mean a
population characterized with low purchasing power.
a) Less foreign exchange – concentrating much on domestic markets leads to loss of revenue
for both the producers and the governments of developing countries.
b) Lack of competition – without producers in developing countries adequately participating
in international trade, it means that they would not be exposed to competition and hence
will not effectively improve on the quality of their commodities.

International trade

While domestic trade is important, developing countries such as those in the Sub-Saharan
Africa must strive to increase their participation and competitiveness in the international
agricultural commodities market. International trade has a wide range of benefits for both
consumers and particularly producers in the global south. Some of the benefits of international
trade for a developing country like Zambia could include:

a) Increased market – unlike domestic, international trade provides for a larger consumer
base hence promoting the welfare of agro producers in the global south.
b) Increase competitiveness of producers – an international market provides exposure and
also ensures the integration of local farmers in the global value chains. Furthermore,
farmers learn international best practices in production thus producing internationally
competitive products.
 c) Foreign exchange – a number of developing countries are going through a number of
challenges some of which can be directly attributed to shortages of foreign exchange.
Thus, maximizing agricultural trade would earn the much needed foreign exchange.
d) Job creation
e) Poverty alleviation
f) Rapid economic growth
g) Debt servicing - many developing countries appear to be accumulating a lot of debts on
one hand, and struggling to pay back such debts on the other hand. This among other
factors is influenced by a narrow revenue base which cannot sustain debt servicing
obligations. International trade would thus help increase the revenue capacity of
developing countries to service debts.
h) Surplus disposal – agricultural commodities are sensitive in nature, that is, for example
they easily go to waste. Think of fishermen having produced a surplus of fish from Goma
Lakes whose supply exceeds the domestic demand in Zambia. In this case, there are
questions about storage facilities for the excess, of which such storage facilities might be
lacking or ineffective. Thus to prevent this loss and wastage, international trade would act
as a medium for this surplus disposal.
i) Trade balance surplus

Manufactures vs agricultural commodities export

Developing countries, it has to be emphasized are not a homogenous group, there are some,
for example, the emerging economies that have successfully graduated into exporters of
competitive manufactured goods. On the other hand, there are still some developing countries
particularly in Sub-Saharan Africa that have since independence struggled to achieve
industrialization. Nevertheless, both the successful and failing countries seemed to have an
objective, and that was, to move away from agricultural commodities export and subsequently
increase the share of their exports of non agricultural commodities, or put differently
manufactured goods. The differences in the performances of these commodities, industrial and
agricultural, has been at the center of the policy choices that such countries had adopted. For
example, in Zambia there was the import substitution industrialisation (ISI) strategy as has
already been pointed out in some sections of your notes. Some of the disadvantages of
agricultural commodities (read your notes on demand and supply sides) over manufactures
includes the following:

a) Dependent on climate – agricultural production is not predictable as it is dependent on

climate
b) Agricultural commodities are perishable hence in the case of developing countries with
inadequate marketing facilities such as storage, transport network, export of Perishable
commodities is mostly likely to be affected.
c) Price fluactions due to seasonality
d) Agricultural commodities are biological, that means they are easily affected by diseases or
pests
e) Bulk which calls for effective marking facilities such as storage, or rather handling costs

The question that has to be asked in this case is whether developing countries should
concentrate on the exports of manufactures or agricultural products. Of course, compared to
agricultural commodities, the share of manufactures appears to have dominated international
trade. Given this, it is not surprisingly that the debate for policy in developing countries is
whether to prioritize industrial goods over agricultural commodities export. However, there is
no simple and straightforward answer to this, as this depends on, the policy options and
capabilities of a given country. In the case of sub-Saharan Africa which might not have a
comparative advantage in the production of manufactures, probably would need to
concentrate on having a competitive export based agricultural sector. By and large, the theory
of comparative advantage appears to argue that a country must not necessarily produce a
commodity just based on their endowments but more importantly based on the costs of
producing such a commodity. In other words, a country must specialize on exporting
commodities which it is able to produce at a relatively lower cost than other trading countries.
Furthermore , if the opportunity cost of producing a particular commodity is higher, that is
( the amount of resources that the country has to forgo or sacrifice is higher), then there is no
economic sense or rationality in producing such a product. Africa for example, based on their
good soils, favorable climate etc are in a better position to produce certain agricultural
commodities at a lower cost. Manufacture or industrial goods on the other hand tend to be
capital intensive, an advantage which most sub-Saharan African countries don’t have. Thus,
comparatively, to produce manufactures it might mean a developing country like Zambia
sacrificing more resources than it would in agricultural commodities.

Food crops vs cash crops

There are more benefits of a developing country entering the global markets of agriculture.
However, agricultural trade is becoming more and more competitive, meaning the quality of
commodities supplied greatly matters. Given the limited and competing uses of agricultural
lands around countries globally and in Sub-Saharan Africa, agricultural policy faces some
challenges in allocation of resources whether for food or high value crops ( cash crops). Food
crops are mostly grown for domestic consumption. Of course, Food crops can also be exported
but not with the same intensity and scale as cash crops. On the hand, high value crops are
those that are grown mainly for exports. The difference among these being that cash crops are
usually high value crops and hence fetch much foreign exchange compared to food crops. Given
that developing countries desperately need foreign exchange, the debate is whether or not
they have to prioritize cash crops over food crops. Some opponents against high value crops
seem to focus among others on:

a) Food security - recall from Engel’s law that the poor spend most of their income on food.
Developing countries are largely affected by poverty which might affect the poor’s capacity
to purchase food. Policies that encourage subsistence farmers to commercialize and
produce more cash crops means that the domestic supply of food will be affected and
hence prices go up thereby affecting the poor most.
b) Land grabbing—a policy favoring more commercialization might lead to foreign investors
and also big domestic commercial farmers to displacement of the subsistence farmers by
buying off their lands and using it for production of high value crops or cash crops.
c) Environmental issues— high value crops might require excessive input use such as
chemicals which could besides being expensive to the majority of farmers in developing
countries, could also be costly on the environment (environment degradation).
d) Technical – farmers in the global south might not have enough technical know how on
growing and management of some high value crops, also given the lower or ineffective
extension services in developing countries.

However, some proponents might argue that high value crops or cash crops would be
beneficial to the development of developing countries in some of the following ways:

a) Small scale farmers are integrated in the global value chains

b) Increased foreign exchange for the country
c) Increased income among the farmers
d) Jobs created in the global south
e) Economic growth

Agricultural trade issues and patterns

International trade in agro commodities appears to be just as competitive as the international

market for manufactures. However, it has generally been observed that the share of
agricultural commodities in international trade has been relatively less than that of
manufactured commodities. As expected, the developed countries as well as other emerging
economies dominate the export of manufactures on the international market. At the same
time, a worrying picture for developing countries such as those in the sub-Saharan region is
the increasingly dominance or share of agricultural commodities exports by some developed
and other emerging economies. For example, the USA though an advanced industrial and
service economy is also among the largest exporters of major agricultural commodities such as
corn(maize), soya beans, wheat, beef etc. Similarly, emerging economies such as Brazil
dominate in the exports of commodities such as sugar and soya. Whereas India for example,
another emerging economy is also among the major exporters of rice and other agro products.
Furthermore, even at continental level comparison , Sub-Saharan African share of agricultural
exports generally appears to be way below that of other regions such as Asia, Europe, North,
Europe or South America.

Another interesting issue to note is the rise and dominance of agri food corporations in
international trade. These control a significant share of trade in major agricultural commodities.
Furthermore, most of these agricultural corporate giants are based in the global North and in
some emerging economies. For instance, the popular agribusiness corporations such as Archer
Daniel’s-Midlands (ADM), Bunge, Cargill, and Louis Dreyfus control most of the global trade in
grains. By and large these four corporations have been famously referred as the ABCD. For
instance, A stands for Archer Daniel’s-Midland, B stands for Bunge and so on. Interesting to
note that three of these giant agri corporations are based in the USA (developed) , and one is
based in France (also a developed country).

Furthermore, agricultural trade appears to a large extent to have transformed, that is, agro
commodities traded on the international market are increasingly becoming more complex than
what they used to be . In other words, there is an increasing share of processed or value added
commodities in international agricultural trade. However, as the share of value added agri
commodities traded on the international market is increasing, there seems to be little value
addition or put differently, developing countries largely still export unprocessed or raw agri
products.

Despite their low shares of agricultural exports, developing countries can still maximize agric
exports by taking advantage of emerging markets for example. Emerging markets such as China
are characterized with increases in per capita incomes, they have the purchasing power. Even
though some of these emerging countries are among the top producers of certain grains they
still remain net importers. Take China as an example, it is one of the major global producers of a
number of grains yet due to among others increases in population finds herself to be a major
importer of foods. Besides, the rise in population with a higher per capita income entails there
are some diet transitions such as increased demand for high value crops, meat and meat
products. In this regard, developing countries can take advantage of such bigger emerging
markets for export.
Challenges of developing countries in agro international markets

It is indeed in the interest of different countries to participate freely in international trade and
reap the benefits for their respective domestic developmental needs. This is particularly
important for developing countries where challenges of absolute poverty and debt burdens are
severe. The importance of international trade is seen by a number of trade treaties or
organizations that have been formed to facilitate trade among nations. For example, in 1947
governments around the globe came up with the General Agreements on Tariffs and Trade
(GATT) whose mandate among others was to enhance or facilitate international trade. In
1995,GATT was taken over by the World Trade Organization (WTO). WTO has several mandates
such as trade facilitation and trade dispute resolutions between or among member countries.
One interesting factor about WTO in comparison with its predecessor (GATT) is the explicit
inclusion of agricultural commodities in the trade negotiations since it appears for GATT there
was more emphasis on trade negotiations in non agricultural goods. Free trade is advocated
under international trade so as increase market access without much restrictions. As has been
argued in some other sections of this presentation, the share of exports from developing
countries is relatively small among some of the reasons being trade barriers. Just like trade in
good and services, there are many barriers that could affect agricultural commodities export
from a developing country’s perspective. Of course internal agricultural challenges such as low
productivity, can influence a domestic barrier in increasing the volume of exports on
international market. However, access of markets can be hindered for example through :

a) Tariff barriers (read your notes under trade policy instruments)

b) Non tariff barriers such as quotas (read your notes under trade policy instruments)
c) Subsidies – it has been generally argued that governments in low income countries tax
agriculture while their counterparts in the global North and other emerging economies
subsidize agriculture. In other words, subsidies that seem to be given to farmers in rich
countries have the potential to distort international trade. Take for example, a farmer in
Zambia whose production and exports might not be Subsidized. This farmer wants to sell
 maize at 100 US dollars per tonne on the international market. By the way this farmer just
graduated from a course in agriculture, Food Security and Rural Development,so he or she
is well informed about the costs involved in producing a tonne of maize. Without any
production subsidy the costs is let’s say 80 US dollars, and without an export subsidy, the
cost of logistics (storage, transport etc) goes to 10 USA dollars. Similarly, there is a farmer
in the developed country attempting to sell a tonne of maize on the international market.
This farmer due to subsidized production or export subsidy the overall cost he or she incurs
to produce a tonne of maize is 60 dollars. As these two farmers meet at the international
market, price won’t be 100dollars but would even reduce to 95 dollars because of
increases in supply . In that case, a Zambian farmer might just earn 5 dollars profit
assuming the price does not even fall below 90 dollars (the cost of production) , on the
other hand a farmer from the developed country would in this scenario make about 35
dollars. In this vein, subsidies are trade distorting and have the tendency to depress or
lower the price of a commodity on the international market.
d) Technical barriers to trade – WTO advocates for member countries to facilitate free trade
including in agricultural trade. Tariffs and even quotas are easily detectable barriers to
trade, so many countries would not explicitly use these trade policy instruments to prevent
goods from other ccountries.Thus even without tariff or quota restrictions from important
global markets, one of the ways developing countries are affected is through technical
barriers to trade (TBT). Technical barriers entails that a product or commodity has to meet
particular standards deemed acceptable in the importing country. These standards might
for instance include packaging, labeling etc.
e) Sanitary and Phyto Sanitary (SPS) - these are also measures by which an importing country
can restrict trade with another country. Under SPS, governments are concerned with the
product, (whether it is movement of live animals, plants etc) , must not carry any harmful
substances or diseases on humans, animals or plants. It means that countries particularly
developed countries place much emphasis on the transparency of the crop or animal value
chain. For example, how the crop is grown or the packaging, do those methods have any
harmful bearing on the consumers or other plants or animals in an importing country? In
 short, transparency from farm to folk. If a country has not easily combated animal disease
outbreaks or is prone to animal disease out breaks such as foot and mouth diseases, then
an importing country based on SPS measures can restrict the import of such products.
Many countries in Sub-Saharan Africa in that regard have failed to export beef or live cattle
to advanced markets and also emerging markets like China. While issues of health are
important in as far as preventing global pandemics is concerned, it has been argued that
countries unless they have scientific evidence or basis should not hide under such
measures to restrict trade.
f) Intellectual property rights (IPRs) – in as much as free trade is necessary it must be
conducted in such a way that innovators or investors in R&D benefit in as much as the
consumers also benefit. Intellectual property rights such as patents must be protected
especially in developing countries which in some instances may lack strict monitoring and
administration in IPRs. The question then is how can IPRs be a barrier to international
trade of agricultural commodities? Firstly, developing countries for example, Sub-Saharan
Africa are characterized with low productivity owing to low capital formation or
technology. One of the reasons is the lack of foreign exchange to purchase technology
from the global North and other emerging economies which is usually expensive. This
technology due to patents might not allow for developing countries to replicate and
develop a cheaper and appropriate technology for their farming activities. Apart from
machinery or capital, consider also that there is heavy investment in R&D on the
improvement of other inputs such as seeds and animal varieties. In this vein, global
corporations have invested in seed banks, chemicals etc which are patented. These
breakthroughs as important as they appear might not really benefit the small scale farmers
in the global south who in most cases can not afford to purchase.

Market access

As has already been argued, the share of developing countries’ trade in agriculture is low
compared to developed and emerging economies like Brazil, Argentina, India etc. One of the
challenges is market access. From the previous section, you will note that implementing any of
the factors highlighted denies market access and especially for developing countries. In an
attempt to level the trading field, most major economies have given preferential treatment to
developing countries exports including ’ agro exports. Among some of the notable ones are for
example, the Everything but Arms initiative which among others relaxes tariffs or quotas for
countries in the global south to access the large European market. Similarly, USA came up with
the African Growth and Opportunity Act (AGOA) which promotes the export of agricultural
commodities to the USA market without much trade barriers

Food security

This concept like many others you have encountered so far in the development field tend to
be quite difficult to define. This entails that different people from different walks of life would
have different definitions and certainly attach different meanings to the concept of food
security. Now, the concept itself became popular following the world food problems of the
1970s which saw the world food summit of the United Nations Food and Agriculture
Organization (FAO). Therefore, in as much as food security has been defined differently by
different people or entities, the FAO definition of food security appears to be popular. Despite
such attempts to define food security , one important factor also to note is that the definition
has been evolving to capture different realities. For example, in the 1970s, FAO, on one hand,
defined food security as availability at all times of adequate world food supplies of basic
foodstuffs to sustain a steady expansion of food consumption and to offset fluctuations in
production and prices. As can be noted, to a large extent this definition seem to have
concentrated more on the supply side or rather equating food security to food availability.
Going by the preceding definition, some policy makers or implementers might make disastrous
mistakes of regarding food availability or amount of food produced as equal to food security.
In 1996, on the other hand, the definition by FAO evolved such that now food security was
regarded to exist when all people, at all times have physical and economic access to
sufficient ,safe and nutritious food to meet their dietary needs and food preferences for an
active and healthy life. Note the differences in the two definitions, of course the initial one was
narrow as it concentrated mainly on the dimensions of availability but the latter definition
attempts to capture different dimensions that constitute food security.

Thus, these dimensions are very important for policy makers and programme implementers to
understand. Without a critical understanding of what really constitutes food security, there
could be some devastating consequences on the given population. Briefly let’s consider some
of the dimensions or pillars of food security

a) Availability – This simply refers to the quantity of food produced, in other words this
dimension tends to take a supply side perspective. Recall that when the concept became
popular in the 1970s,most definitions were inclined towards looking at food stock. Is there
enough food supplies to feed the nations? Food availability is very important but as the
definition has evolved this goes to show that the fact that a nation has plenty of food
supplies does not necessarily mean everyone in that country is food secure. This led to
some other refinements in the definitions to include other dimensions
b) Access- food availability is not food security on its own unless people are able to access it.
This dimension or pillar seem to take into account the demand side. For example,
borrowing from Amartya Sen’s Entitlements, it can be argued that barriers such as physical,
economic, social etc can affect man’s access to food. For example, basing the argument on
the following entitlements:
1) Production based – for food to be accessed, one of the surest ways is to
produce it. It means a country must put in place policies that promote
the supply side i.e production. Recall your notes on agriculture and rural
development policies, one of the challenges that face the poor
households particularly in rural areas is lack of productive assets which
results in low productivity and production. It is imperative that to address
food security, households must be equipped with this entitlement. And
recall also that households in rural areas are mainly based on household
labour for food production. With seemingly rural hardships, rural urban
migration is rampant in developing countries thus depleting household
 labour and threatening production based entitlement and thus food
access. .
2) Trade based – If a nation or household can’t produce food then it has to
purchase. Thus this entitlement is very important to ensure that
households have access to food. Policies, remember from your previous
topics, among some of their major objectives are to address or increase
the income levels of rural areas. This would act as a buffer or one of
coping strategies if the production based entitlement collapse maybe due
to bad weather. Armed with incomes, rural areas can access food from
regions where it is in surplus using their trade based entitlement.
3) Own labour – as it has already been pointed out in the other section, the
rural economy is generally different from urban in as far as income is
concerned. Mostly in rural areas, labour would be exchanged for food
whereas in urban areas people would mostly offer labour to get income
which they might use to purchase food. In rural areas, poor households
who might be lacking the other two entitlements already talked about
could use their labour to work for the medium and rich households and
be given food in return as payment.
4) Transfer/inheritance-
c) Utilization - the concept of food security as you have noted by now keeps evolving. This
particular pillar basically concerns itself with the safety of food. That is to say, food can be
available and accessible but the question is whether that particular food is safe or being
utilized in ways that promote the health and well being of the people accessing it. Take for
instance, factors such as hygiene i.e regarding the preparation of food that is available and
accessible to a household.. This dimension also encompasses the cleanliness or safety of
water used in food preparation.
d) Stability – think of it in this way for a moment, a household has food and access to it
accompanied with good sanitary conditions in preparation of the food, but then members
of that same household are not sure if the following day they will have access to the food.
 It is in line of such thinking among others that this dimension or pillar of stability was
introduced to this concept of food security. . Here, one of the concerns is resilience of the
food system to guarantee availability, access and utilization to a country, community,
household etc. even in times of economic or environmental shocks.

Levels of food security

The question can be asked as to the relevance of these levels. As policy makers and
implementers, it is important to understand the levels at which food security can be analyzed.
Having this information is cardinal for correct food policy response. For example, if Lusaka
province is food secure does it mean also that a community in Chongwe district is food secure?
If there is little understanding of such levels a chaotic situation could be created whereby one
community is food insecure even though the province is assessed to be food secure. That is
one of the reasons why in the food security discourse it has generally been agreed that food
security could be analyzed at different levels including:

a) Global – where nations are becoming more and more interconnected each day, the
importance of this level cannot be overemphasized. Looking at the performance of major
food crops such as wheat, rice and maize at a global level can help an individual country to
forecast its national food security situation. Think of the recent past global disruptions in
the supply of major cereals such as the Russia-Ukraine conflict, and also Corona virus. . This
has a huge bearing on the food security situations of many developing countries who in
most cases are major net importers of such cereals.
b) Regional-for a landlocked country like Zambia, food security situation at a regional level is
even more critical and sensitive. If there is a depletion in regional stocks of food this could
result in a food security threat for another country within the region. For example, issues
of smuggling of maize from Zambia to other countries within the region become rampant
when in those countries the stock of maize is quite low.
c) National – here food security is analyzed from a given country level , for instance Malawi.
d) Sub-national
e) Household
f) Individual

Threats to global food security

Issues of food security must not be taken for granted by governments around the globe.
Therefore it is necessary to understand the challenges or threats to food security so that
appropriate polices can be applied at both national and global levels. Remember one of the
pillars of food security is stability, but there are different factors that appear as a threat to this
important dimension of food security. Some of these factors includes:

a) Inappropriate agricultural policies- policies designed by different countries across the globe
must endeavor to address the critical issues of food sufficiency and security. Biased policies
for example against food crops or staples might affect the global supplies
b) Population – the issue of population in relation to food security might be looked at for
instance from the demand side. Population has been projected to increase to over 9 billion
by the year 2050 for example. With this population, particularly in the emerging economies
comes with rising per capita incomes. Rising per capita incomes have been argued
increases the demand for food particularly meat products. The implications of this is that
food crops now have competing uses. Take for example, corn or maize which is one of the
major staple foods in many developing countries including Zambia, is also needed to satisfy
other needs like production of animal feeds, it is also used iin the production of carbonated
drinks as high fructose corn syrup. Such factors of course have the ability to increase the
prices of such staple foods due to their increased competing demand and uses. Since the
poor are mostly the partakers of these cereals they are more likely to be affected by global
increases in prices
c) Bio fuels- sustainability appears to be among the buzz words in the 21 st century, this simply
means the demands for clean and renewable energy is increasing so is the demand for
crops meant for such fuel also seemingly rising. For example, more land is also needed to
grow not only food crops but also these crops for biofuels.
d) Water scarcity – the challenge in the 21 st century appears to be depleting fresh water
sources. It is common knowledge that agriculture is one of the major abstractors of water.
 With increased urbanization and also industrialization in some parts of the world demand
for fresh water is on the rise thus affecting supply of water for irrigation purposes.
e) Environmental factors- sustainability as has already been pointed out is one of the key
issues threatening global food security. Agriculture is one of the sectors that have a closer
bi directional relationship with the environment. This simply means agriculture on one
hand is very sensitive and mostly affected by climate change, and on the other hand it is
also one of the major sectors contributing to environmental degradation and climate
change. Deforestation, land degradation and other unstainable agricultural practices are
further posing the risks on food security.
f) Diseases - global pandemics as witnessed in the recent past (Corona virus) have the
potential to cause production and supply disruptions of essential agricultural commodities.
At risk of being affected by such pandemics are once again the poor especially in the
developing countries.
g) Conflicts/wars- peace is an important pre-requisite in global food security. Any disruptions
in the production and supply of food in one of the major food producers might have an
impact on the food security situation in other countries. Take for example, how the Russia-
Ukraine conflict has affected many developing countries particularly Africa who are
dependent on the imports of cereal from these countries.
h) Land grabbing – as with other concepts within the development discourse, land grabbing is
one of those buzz terms especially as relates to the future of agriculture visa vis food
security. The term taken literally sounds like a violent take over of land, but that is not
necessarily true in the practical sense. This means that the parties involved, for example
foreign corporations, or countries enter into agreements with host nations through
transactions or other legal means, for example through purchase or other lease
agreements. As you know that land is a scarce resource and also that most developing
countries particularly those in Sub-Saharan Africa seem to have vast pieces of unexploited
agricultural land. However, it is not only the limited amount of agricultural land that can
force foreign corporations to invest in foreign agricultural lands of other countries but also
 harsh agro climatic conditions in their countries of origin. To a host economy, land grabbing
might be beneficial in some of the following ways :
a) Create employment to the locals as they are offered jobs in these vast and
sophisticated agricultural systems
b) Skills transfer
c) Broadening the tax base
d) Technology transfer

However, some of the major criticisms against land grabbing in relation to food security are
based on land scarcity, and also the production of other crops which might have nothing to do
with the food security situation of the host country. This is because the land that is sold or
leased to foreign governments or corporations is mostly for meeting the food needs or other
agricultural needs of a country of origin.

Food insecurity

The challenges pointed above might culminate in food insecurity particularly among the low
income countries and also poorer communities. Certainly the absence of food security means
that there is food insecurity. Again there are so many definitions that attempt to define this
concept. To have some consistency, again let’s borrow from the definition by FAO. In this vein, ,
one of the definitions by FAO regards food insecurity as a situation that exists when people lack
secure access to sufficient amounts of safe and nutritious food for normal growth and
development and an active healthy life. Food insecurity has many different types or forms that
constitute it. By and large, it is important to understand the types of food insecurity as it
helps planners whether in government, private or NGOs to put in place right courses of action
in an affected community or region. It is just common knowledge that to find the right cure to a
problem, there has to be the right or correct diagnosis. The following are some of the forms of
food insecurity :

a) Chronic – This is a sustained lack of access to adequate food by an individual, household or

whatever other level. Now, this form of food insecurity has been argued to be generally
predictable. This is the most common among the poor who in most cases appear to
 experience some collapse in their entitlements . For example, due to poverty, they might
lack productive assets to produce their food, or lack income to purchase food. Coupled with
that, the people prone to chronic food insecurity might lack or have limited Coping
strategies.
b) Transitory - This is basically a short term inadequate access to sufficient food
c) Temporal – This is also a short period lack of access to adequate food. Now this form of
food insecurity appear to be not easily predictable. For example, the world is full of
uncertainties, think of economic crises which can lead to unforeseen increases in the prices
of food, or environmental issues such as floods or droughts.
d) Cyclical – This form of food security appears to be more predictable. For example, most
households in developing countries tend to be food secure immediately after haverst but
later on food stocks start reducing as they approach the farming season. In addition, think
of it also for households that are engaged in seasonal jobs, during the peak season the
household could acquire money to purchase food and the opposite happens when the
seasonal job is over.

Manifestation of food insecurity

Policy makers especially in the global south must be very concerned with issues of food
insecurity. A country or community free from food insecurity is definitely one of the
prerequisites to achieving sustainable development. At the centre of food insecurity is the
problem of hunger. Now you will recall that eradicating hunger is among the major global
concerns as evidenced in the millennium development goals (MDGs) and Sustainable
Development goals (SDGs) . Certainly, south Asia and Sub Saharan Africa appear to be the
regions mostly affected by hunger. Hunger is simply some discomfort experienced from not
having eaten adequate food. Typically hunger might result for example in Undernourishment
and Malnutrition, with the former being more associated with the quantity of food consumed,
i.e are individuals taking in the accepted amount of calories, while the later simply goes beyond
the quantity of food but mostly importantly the food lacking enough nutrition. To combat
hunger for example in a particular region, as planners or implementers you must be in a
position to distinguish the type of hunger prevalent among the individuals or households in
question such as::

a) Mal-absorptive- here a person does not benefit fully from the nutritional value of food due
to some parasites in the body or the food is just passed out without benefiting the body
this can also be due to ill health
b) Seasonal hunger- this is typically common in regions where there is one farming season.
The period after harvest, there is usually plenty of food, and the opposite is very true
during the period before harvest (planting season)
c) Taste hunger – this type of hunger is one that is associated with one’s cravings or
tastes .This does not necessarily mean some one is hungry, they might have even eaten,
but just craving for some other foods.
d) Habit hunger – this is the type of hunger that is usually associated with eating habits e.g if a
person is used to eating at a particular time and does not eat at that particular time they
tend to feel hungry even though they are not necessarily hungry.
e) Mind hunger- the feeling that one has to eat even though one is not really hungry.
f) Stomach/hollow hunger – this is real hunger, it is the discomfort associated
g) Body hunger- this is the discomfort or feeling associated with the body lacking access to
food over a period of time

Theories of famine (please read one of the recommended books by Stephen Devereux)

The previous section described hunger and some of its forms. Now sustained periods of
stomach hunger and subsequently body hunger could result in a phenomenon referred to as
famine. By and large, famine comes from a Latin word ‘fames’ for hunger. Famine is usually a
condition that is associated with severe starvation or extreme shortage of food for a long
period of time. This is often associated with illnesses (body becomes extremely weak) and
death. There is no agreed single cause of famines, as such there are a number of theories that
have attempted to explain the causes of famines. The main theories of famine can be divided
into two; the supply side (Food Availability Decline) and the demand side. The supply side
theories tend to focus on food production /availability in relation to famine. Some of such
theories includes the following;

a) Demographic approaches- these attempts to argue that population is one of the causes of
famine. Most influential is the Malthusian theory on population which appear to argue that
famines are a natural phenomenon (cant be avoided) since the population will
overpower the earth’s ability to produce food. For example, population and food grow at
parallel rates . With the former growing at geometric rate and the latter at arithmetic.
Recall that land is fixed and from the supply side problems of agriculture you already know
that diminishing returns are more likely to set in given such conditions, I.e where one factor
of production is fixed yet the population has to increase food production on the same fixed
piece of land.. While such theories are still having relevance in the 21 st century, for example
you saw in the previous topics how population growth particularly in developing countries
pose as a threat to global food security, however in the contemporary world, there are
certain gaps that this theory especially as argued by Thomas Malthus. For instance, while
issues of diminishing marginal returns are certain in agriculture, in this modern era, better
ways of farming or sustainable agricultural practices have been developed thus ensuring
more food is produced on the same given piece of land. This goes to show that Such
theories fail to take into consideration of the improvements in technology which is capable
of growing more food through land intensification as opposed to extensification.
Furthermore, there has been tremendous improvements in logistics such as transport and
storage facilities. This entails for example, from transport logistics that food is able to be
easily moved from regions of surplus to regions of deficits.
b) Climatic factors – this theory attempts to explain food decline availability brought about
due to climatic conditions such as droughts or floods. This is particularly important in the
21st century where issues of climate change are becoming a reality. Climatic aspects such as
drought can have a severe impact on food availability due to crop failure. In Sub Saharan
Africa, the horn of Africa has been one of the regions prone to droughts and thus
 susceptible to famine. Despite the strength of this theory in predicting and explaining
famine, this theory has not gone without criticism. For instance, one of the areas of
criticism has been argued on the basis of people having different Coping strategies. The
other factor among others being that economies or countries do not have closed
economies, they are able to trade with other regions which might not have been affected
by adverse climatic factors. Furthermore, it has also been observed that there are
regions/countries that are drought prone yet have never experienced any famine in
comparison to countries that are not drought prone.

With the foregoing theories focusing more on the supply side explanation, they have been
critiqued for failing to take into consideration the demand side factors. This made the economic
theories popular in attempting to explain famine from the demand side perspective and these
includes ;

a) Entitlement approach – Amartya Sen is famous for among his works on examining the
causes of famine in Bengal. He argued that the causes of famine is not necessarily food
availability declining, but lack of access. Famines have occurred even in regions where
there was abundant food supply According to him, lack/collapse of entitlements (trade
based, production based, own labour and inheritance/transfer) are crucial in explaining
famines. He refers to entitlements as the set of alternative commodity bundles that a
person can command in a society using the totality of rights and opportunities he or she
faces.
b) The other economic theory explaining famine is market failure. Famines can result even
when there is adequate food produced, this could be due to the market being
dysfunctional, for example hoarding (food being stored) and speculation. This can lead
to market failure resulting in the rise in the prices of food. Market failure can take two
forms;
a) Pull failure – it has been argued that this is not necessarily a market failure in the
sense that the market maybe operating normally. However, some sections of the
population might not access food despite the market being not dysfunctional.
Famine under pull failure can result due to poverty and lack of entitlements. For
 example, even though there can be availability of food on the market ,the poor
can still fail to access it due to their low purchasing power.
b) Response failure – unlike the pull failure, this is necessarily regarded as a market
failure. Here the market is not working normally (dysfunctional) and hence fails
to adequately respond/meet the food demands of the people.

Apart from the dominant demand and supply side theories highlighted in the previous sections,
there are also other alternative theories or approaches to understanding famine. These
includes;

c) The political economy of famine - this approach attempts to explain famine through;

a) Management of natural resources – there is a relationship between environmental

degradation and famine. This approach further argues that the factors that lead to environment
degradation can be grouped into the following;

1) . Natural degradation – here natural factors such as soil erosion, climatic changes,
desertification etc can have an impact on soil fertility leading to low food production

2) Man made – factors such ignorance of mankind in managing natural resources and
poor farming methods could have a bearing on famine.

3) Exploitation- here famine is associated with colonial exploitation of natural resources

as well as post colonial capitalism.

b) Apart from famine being explained in the context of management of natural resources
under the political economy explanation, the other factors to consider are government policies.
Inappropriate government policies and also government’s failure to respond or intervene can
contribute to famines.

c) War/conflicts- these are also important explanations of famines. Wars not only disrupt the
production of food but also the distribution and supply of food from one region to the other.