Welfare and incentive effects of possible changes in the regulatory environment of the maize market in Swaziland - Institutional Constraints to Small Farmer Development in Southern Africa - page 131

and the numerous global efforts to lighten the economic costs of trade protection, a number
of governments still intervene in trade.
In many instances, those in favour of protection plead the food-price dilemma, vis-à-vis the
conflicting goals of maintaining food prices that are profitable for producers and affordable
to consumers. In Southern Africa as elsewhere on the continent, this classic food price
dilemma historically has been addressed through controlled marketing systems, in which
food prices are artificially raised for producers and lowered for consumers through subsidies.
However, this practice has become fiscally unsustainable in many countries. As a result,
food market reforms are currently being implemented in over 20 African countries ( Jayne
and Argwings-Kodhek, 1997; Jayne and Jones, 1997; Donovan, 1996; World Bank, 1994).
However, the process of food market liberalisation has often proceeded without the full
confidence of key policy makers. Serious concerns have been raised throughout Africa over
the effects of market liberalisation and the elimination of food subsidies on low-income
consumers' access to food. Consumer behaviour is a key determinant of the impact of market
liberalisation on household food security and, as a result, controls on food prices and trade
have frequently been revived during drought years when fears of food shortages and high
prices are heightened ( Jayne and Argwings-Kodhek, 1997; Lewa and Hubbard, 1995).
Whilst much research has been devoted to understanding how farmers, traders and
consumers have responded to food market reform, little is known about the responses of the
Swaziland maize industry to such market reforms. This study therefore opts to shade light on
the welfare effects of the way the maize market industry is currently organized in Swaziland.
The study on which the present paper is based used the partial equilibrium model to
quantify the distortions in the maize industry of Swaziland since the goal is to gain practical
understanding of one-sector policies rather than an economy-wide analysis for which a
general equilibrium framework would have been appropriate. Similar approaches have been
adopted in the literature as clearly reported by Bale and Greenshields (1978), Bale and Lutz
(1981), Wright and Nieuwoudt (1993), Van Schalkwyk et al. (1997). The methodological
manual developed for the regional Comparative Advantage Studies for Southern Africa
under the auspices of the United States Agency for International Development (USAID),
prescribed similar approaches (Hassan et al. , 1999) adapted from the seminal works of
Monke and Pearson (1989) and Tsakok (1990). In a recent topic, Aksoy and Beghin (2005)
suggest that partial equilibrium analysis at country and commodity levels provide sufficient
guidance for credible policy formulation.
Data for the present analysis were obtained from National Maize Corporation (NMC), the
National Early Warning Unit for food security and the Food and Agricultural Organisation
(FAO) statistical database. The welfare calculations were made for a six-year marketing