The challenges of managing agricultural price and production risks in sub-Saharan Africa

Lavinia Antonaci, Mulat Demeke and Antonio Vezzani

No 288979, ESA Working Papers from Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA)

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).

Keywords: Agricultural and Food Policy; Food Security and Poverty (search for similar items in EconPapers)
Date: 2014-06-17
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:faoaes:288979

DOI: 10.22004/ag.econ.288979

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