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Tied to specific production decisions or decoupled

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Unformatted text preview: in food production, prices were typically left along Starting in late 1970s, PPEs that came under structural adjustment were forced to liberalize Example: Ghana’s Cocoa Board “Cocobod” began as the west African produce control board (1940) cocoa marketing board (1941- 1979) acted as traditional marketing board underpriced domestic cocoa relative to international prices sole legal rights to cocoa trade Underwent reform during structural adjustment Subsidies removed Privatization of the cocoa processing Sale of state- owned plantations (slow) Exports still controlled by Cocobod, but there are now about 25 private companies buying the crop Farmers still guaranteed a minimum floor price Changing forms of assistance: Economic reforms; Reduced fdirect and indirect taxes on agriculture Reduced food subsidies Got rid of over- valued exchange rates Stronger price incentives ! agricultural growth Nominal rate of assistance for commodity = domestic price (p) plus any subsidy (s) less world price (p*) as a fraction of the world price Is NRA<0 ! farmer- producers are being taxed NRA>0 ! domestic consumers are being taxed Richer countries done by restricting output NRA just tells you about the price gap between Agriculture and international trade: Developed countries traditionally protect against agricultural markets: Lobbying strength of farmers 2% of American workforce is in rural sector but it receives a tremendous amount of...
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