Working Paper
Liberalized and Neglected?

Food marketing is one of the fields where structural adjustment has been implemented throughout the Sub-Saharan Africa. This study analyses the impact of reform on the functioning and efficiency of food marketing. It is based on a comparative analysis of three maize-producing countries, namely Tanzania (by Pekka Seppala), Malawi (by Ephraim Wadonda Chirwa) and Kenya (by Gerrishon K. Ikiara).The case studies show a noticeable variation in the reform paths and the outcomes among the three countries. Tanzania can be singled out as a country which has implemented its liberalization measures decisively during the 1980s. The private marketing system has managed to cover the country fairly well but, due to a lack of investment in storage and the dominance of small-scale traders, price fluctuations are still fairly large. The consumer price of maize has declined during the 1990s. The production of maize has slightly declined and the 1997 food shortage has hit the country hard. In comparison, Malawi has been more hesitant in dismantling the public marketing body. Although private traders are allowed to operate, the public marketing has managed to control a large part of marketing. The severe droughts of 1992 and 1994 have influenced the government to maintain a stake in marketing and to support smallholder food production. Kenya is a country which has a progressive estate farming and milling sector and one in which marketing reform has been vigorously opposed to by the government. Only after concerted donor pressure was the private marketing liberalized in the 1990s. The liberalized marketing system has been turbulent due to changes in both importing regulations and in domestic production. The competitiveness of liberalized maize milling (especially small-scale hammer mills) has led to the decline in the price of maize flour.The case studies in this report show that governments have been able to modify the reform process to suit their own purposes, at least to some extent. Private marketing seems to be operational in most parts of the countries studied. Traders in all three countries still complain about the unpredictability of government policies. It is also clear that governments have invested very few resources to enhance the skills and financial resources of traders.The era of structural adjustment has witnessed a slow decline in food production. Although no direct causality can be drawn from marketing reform to food supply, it seems apparent that the private marketing system has only a limited capacity to deal with the high fluctuations of rain-fed production. During unfavourable years, net consumers are vulnerable as they cannot afford the inflated food prices. Limiting the responsibility of the government to charity-type food distribution after each drought is an inadequate solution to the food problem.