Agricultural Development Economics
 

Publication

Title
The challenges of managing agricultural price and production risks in sub-Saharan Africa
Subtitle
ESA Working Paper 14-09
Author
L. Antonaci, M. Demeke and A. Vezzani
Publication date
27/06/2014
Abstract
Agricultural production is prone to several risks which affect both producers and consumers. In order to enhance investment and achieve a sustained increase in production, coherent and integrated long-term strategies and policies are required to reduce risk aversion and build resilience among African rural producers. Furthermore, the critical importance of social protection and its complementarity to risk management initiatives must be recognised. This paper investigates possible tools and instruments to deal with various production and price risks. Market-based approaches are crucial for risk management options to thrive, but the country experiences examined have highlighted that most of the risk management instruments are not in place or are not fully developed in Sub-Saharan Africa. Farmers are not protected against production and price shocks and this underscores the critical role of governments in agricultural risk management. In view of the high correlation between production, price and market risks, African governments need to adopt an integrated and holistic approach in support of risk management interventions through incentives and by strengthening agricultural markets and financial institutions. Risk management tools need to be mainstreamed into agricultural policies and programmes as currently advocated by the New Partnership for Africa’s Development (NEPAD) Planning and Coordination Agency (NPCA).
Region
Africa
JEL Codes
D81, Q18, E64