Development of the Agricultural Sector

Centrally planned economies reward producers also, and can provide incentives for producing crops which would be otherwise unprofitable in the market. This discussion focuses on free markets rather than centrally planned economies. Governments in free markets can encourage production of certain products over others through the use of subsidies or other incentives, which can artificially inflate prices, but which can help an economy (temporarily) stimulate growth of the agricultural sector (McCalla & Josling, 1985, p. 20).

The category of food consumption includes both the issue of having a supply of food adequate to meet the needs of the population, and having the personal income necessary to purchase the agricultural goods.

According to McCalla and Josling, global consumption of agricultural products is necessarily related to global production, and in recent years, global consumption has increased faster than population growth (McCalla & Josling, 1985, p. 23). This suggests that hunger should be declining around the world, but another factor, poverty, needs to be included in the evaluation.

Weeks and Subasat maintain that the potential for trade in this region has been underestimated historically, and that the potential for agricultural trade is, in fact, strong among various nations. Contrary to popular belief, the region as a whole is not an overwhelming importer of grain except during periods of drought. The other major finding of the authors is that it is critical that the region be considered as a whole rather than as its component parts, and some barriers to trade, including high tariff levels, would have to be reduced for regional grain trade to be effective (Weeks & Subasat, 1998, p. 87).

Per capita income various greatly in the region in question, with the lowest per capita income being observed in Mozambique and the highest in Mauritius. There are also varying degrees of urbanization among the nations in question, with countries such as South Africa and Zambia being highly urban while Burundi and Rwanda are highly rural. Currently, South Africa and Zimbabwe generate nearly all of the net exports in the region, while Malawi and Zambia are major importers (Weeks & Subasat, 1998, p. 77).

Free markets, which completely lack government intervention, are a much#publicized goal of many nations, but organizations such as the World Trade Organization (WTO) and International Monetary Fund (IMF) are evidence that the goal has yet to be obtained. Price stability, assurance of supplies and political strategy are all seen as reasons to engage in government intervention, and some governments fear that their businesses will be at a disadvantage if government intervention is removed. Nonetheless, some governments have taken a largely laissez-faire approach to agricultural commerce.

 

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