FAO.org

This policy brief analyses Ecuador’s trade, productive and price policies for maize and their effect on farmers’ level of protection. The minimum support price enacted until 2017, turned out to be a non-operative policy due to a higher market price, which created incentives for speculative investments by traders. To counteract speculative investments the Ministry enacted a price range for maize, the price ceiling is expected to counteract future speculations. Productive and trade policies aiming to protect small farmers seem to achieve their objective. The effective rate of protection increased for all farm production systems from 2016 to 2017 with the highest protection for farmers with traditional production systems. Pricing policies protect not only farmers but also benefit wholesalers and other actors along the value chain. However, the high support in maize converges in disincentive to the final consumer, which is critical for Ecuador considering that maize is directly an important part of Ecuadorian diets and indirectly as part of the poultry value chain. Furthermore, the high support price puts pressure on the national budget. Further analysis of the poultry value chain as well as alternative policies should be evaluated to get a better understanding of the policies impact and reduce pressure from the national budget.

Also available in Spanish.