How has instability in world markets affected agricultural export producers in developing countries?

Peter Hazell, Mauricio Jaramillo and Amy Williamson

No 263, Policy Research Working Paper Series from The World Bank

Abstract: World prices have traditionally been unstable, however, the authors'find thehe much publicized turbulence in world markets in the mid-1970's and early 1980's to have been more a statistical fluke - an unlucky chance sample - than the beginning of any longer term increase in market instability. Variability in world prices has been almost entirely transmitted to developing countries in the dollar value of their export unit values. However, it has not been fully transmitted to average producer prices. Producer prices have been buffered by real exchange rates, domestic marketing arrangements, and government intervention, but still the level of instability remains sizable - and is the dominant source of instability in crop revenues for most producers. Unless farmers are able to diffuse the risky returns from export crops, price variability may seriously impede the expansion of agricultural exports in many developing countries.

Keywords: Markets and Market Access; Access to Markets; Environmental Economics&Policies; Economic Theory&Research; Crops&Crop Management Systems (search for similar items in EconPapers)
Date: 1989-08-31
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