Markets and States of Tropical Africa

Markets and States of Tropical Africa

Why, when Africa is a chief producer of agricultural goods, does it fail to produce enough to keep the citizens from starving? It is due to the intervention of government into the marketplace, and the government’s manipulation of the resources for political gain. The objective of the government is to move the economy away from agriculture and towards industry in order to achieve a modern country. In doing so they adopt political policies which further detriments the peasants in order to appease their upper class.

Agricultural policy consists of government actions that affect the incomes of rural producers by influencing the prices they pay in major markets, and thereby determining their incomes. Farmers are faced with three markets. The market for agricultural commodities, where they receive revenue from sales; the production market, where their costs are incurred; and the market for consumer goods, where their income is determined by the real value of their profits. It is in these markets where the government policies are intervened and manipulated to achieve their goals. That is the goal of becoming a modern industrial country. One way that this is done is through the concept of the sole buyer. In Africa, it is policy that a governmental entity be the sole buyer of agricultural products. Due to the fact that this is a rural third world country, a market is produced in which there are several suppliers, but only one sole buyer, which is a government entity. It is in this way that the government may determine the prices because when there are several suppliers and only one buyer it is a prime situation in which the buyer is able to set the price, therefore determining the seller’s income. It is in this way that the African government chooses to control the incomes of the rural farmers. Rather than boosting the economy by offering incentives to keep the farmers producing , they choose to control the economy by controlling the prices the farmers incur thereby actually decreasing the productivity of the farmers, and indirectly decreasing the welfare of the economy.

In Africa the use of project based policies rather than price based policies further damages the already waning economy. Price based policy is a more efficient and effective method of boosting economy, yet project based policy is still adapted leading to further damage to an already distraught economy. The government will begin numerous political projects designed to increase the economy. However due to the limited resources available in Africa, the starting of so many concurrent projects results in a stretching of the already scarce resources resulting in the resources being spread to thinly throughout all of the projects, and therefore the projects fail rather than succeed. It is this result which defeats the very purpose of which the projects were first began. Not only do the projects fail, they also use the little resources that are available and instead of boosting