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Distortions to agricultural incentives in Zambia : Main report (English)

Zambia is a landlocked country in central Africa with a population of 12 million people. The country has abundant land resources (74 million hectares, 47 percent of which is suitable for agriculture), favorable soils, relatively good rainfall (averaging over 1,000 mm/year) and low population density (6.4 ha per person). A study of regional integration potential in southern Africa concluded that Zambia has the natural resources to be a major food and agricultural producer for the region (African Development Bank 1993), but this potential has never been realized. One important reason for this has been the dominance of copper in the economy. Despite providing a livelihood to the majority of the population, as an export sector agriculture has always been subsidiary to mining. The main focus of the present study (Anderson et al. 2008) is to measure the extent to which government-imposed distortionary policies create a gap between domestic prices and what they will be under free markets. The objective is to have simple measures of policy-induced distortions to agricultural prices which are uniform and comparable across time periods and between countries. Since it is not possible to understand the characteristics of agricultural development with a sectoral view alone, the project's methodology not only estimates the effects of direct agricultural policy measures (including distortions in the foreign exchange market), but it also generates estimates of distortions in non-agricultural sectors for comparative evaluation.

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Citation

Govereh, Jones Ndlela,Daniel Robinson,Peter

Distortions to agricultural incentives in Zambia : Main report (English). Agricultural Distortions working paper ; no. 40 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/906881468336643362/Main-report