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Wilfred Makombe and Jaclyn D. Kropp

No 235499, 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: The Tanzanian government has banned the exportation of maize on several occasions since the 1980s. The government argues these bans ensure an adequate domestic food supply and help stabilize consumer prices. While low domestic prices benefit urban consumers, the bans negatively affect farmers’ and traders’ incomes by hindering their access to lucrative prices in international markets. Because the bans are often ad hoc and impromptu, the policy causes market uncertainty which may have long-run implications for future food security and trading opportunities. This study uses cross-sectional household data from 244 randomly selected households collected in October and November of 2015 from the Mufindi district of Tanzania, a key maize producing region, to analyze the policy’s effects on agricultural production decisions, farmers’ responses to price risks generated by the export bans, the implications of the bans on long-run food security, and the effects of the bans on engagement in agricultural activities and investment. While none of the respondents indicate that they stopped producing maize because of the bans, 43 percent indicated that they decreased maize production and started growing other crops. Approximately 63 percent of respondents now produce maize only for household consumption. The survey findings indicate maize farmers are affected by export bans through lower prices and unpredictable markets. The bans caused some farmers to incur negative profits while others were unable to pay inputs suppliers. The bans also reduced investment in maize farming businesses. The majority of respondents indicated that they would reduce acreage allocated to maize production but continue producing maize to meet household consumption needs if the bans are reinstated.

Keywords: export bans; food insecurity; maize; price risk; Tanzania; Agricultural and Food Policy; Consumer/Household Economics; Crop Production/Industries; Food Security and Poverty; Production Economics; Risk and Uncertainty; Q17; Q18; Q12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr
Date: 2016-05-23
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