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The impact of food aid on maize prices and production in Swaziland

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  • Mabuza, Majola Lawrence
  • Hendriks, Sheryl L.
  • Ortmann, Gerald F.
  • Sithole, M.M.

Abstract

The objective of the study was to provide empirical evidence on whether food aid leads to depressed domestic maize prices and reduced maize production in subsequent years in Swaziland. The lack of empirical evidence has often resulted in premature negative conclusions about the impact of food aid on Swaziland’s maize industry. The study used secondary national data from 1985 to 2006. Variables used in the statistical analysis included quantity of cereal food aid; quantity of commercial maize imports; quantity of locally produced maize; official maize producer price; open market maize producer price; fertilizer price; fuel price; rainfall; and total area planted to maize. The impact of food aid was measured using the reduced form market equilibrium model consisting of maize quantity and maize producer price functions, estimated simultaneously through the two-stage least squares (2SLS) method. Analytical results revealed that food aid received by Swaziland does not lower prices of domestic maize and has no significant negative effect on the quantity of maize produced in subsequent seasons.

Suggested Citation

  • Mabuza, Majola Lawrence & Hendriks, Sheryl L. & Ortmann, Gerald F. & Sithole, M.M., 2009. "The impact of food aid on maize prices and production in Swaziland," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(1), pages 1-21, March.
    • Handle: RePEc:ags:agreko:49290
    DOI: 10.22004/ag.econ.49290
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    References listed on IDEAS

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    1. Unknown, 1997. "Meeting Food Aid and Price Support Objectives through Local Grain Purchase: A Review of the 1996 Experience in Ethiopia," Food Security Collaborative Working Papers 54956, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Lavy, Victor, 1990. "Does food aid depress food production? The disincentive dilemma in the African context," Policy Research Working Paper Series 460, The World Bank.
    3. Kenneth Bollen, 1996. "An alternative two stage least squares (2SLS) estimator for latent variable equations," Psychometrika, Springer;The Psychometric Society, vol. 61(1), pages 109-121, March.
    4. Amha, Wolday & Stepanek, Julie & Jayne, Thomas S. & Negassa, Asfaw, 1997. "Meeting Food Aid and Price Stabilization Objectives through Local Grain Purchase: A Review of the 1996 Experience," Food Security Collaborative Working Papers 55596, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Christopher B. Barrett, 1998. "Food Aid: Is It Development Assistance, Trade Promotion, Both, or Neither?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 566-571.
    6. Abdulai, Awudu & Barrett, Christopher B. & Hazell, Peter, 2004. "Food aid for market development in Sub-Saharan Africa," DSGD discussion papers 5, International Food Policy Research Institute (IFPRI).
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    Citations

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    Cited by:

    1. Hoddinott, John & Margolies, Amy, 2012. "Mapping the Impacts of Food Aid: Current Knowledge and Future Directions," WIDER Working Paper Series 034, World Institute for Development Economic Research (UNU-WIDER).
    2. Garg, Teevrat & Barrett, Christopher B. & Gómez, Miguel I. & Lentz, Erin C. & Violette, William J., 2013. "Market Prices and Food Aid Local and Regional Procurement and Distribution: A Multi-Country Analysis," World Development, Elsevier, vol. 49(C), pages 19-29.
    3. Gautam, Yograj, 2019. "“Food aid is killing Himalayan farms”. Debunking the false dependency narrative in Karnali, Nepal," World Development, Elsevier, vol. 116(C), pages 54-65.
    4. Amy Margolies & John Hoddinott, 2012. "Mapping the Impacts of Food Aid: Current Knowledge and Future Directions," WIDER Working Paper Series wp-2012-034, World Institute for Development Economic Research (UNU-WIDER).
    5. M. L. Mabuza & G. F. Ortmann & E. Wale, 2016. "Frequency and extent of employing food insecurity coping strategies among rural households: determinants and implications for policy using evidence from Swaziland," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 255-269, February.
    6. Ugwu Ephraim & Efuntade Olubunmi & Ehinomen Christopher, 2022. "Analyzing the Effects of Food Imports on Food Production and Balance of Payments in Nigeria," Folia Oeconomica Stetinensia, Sciendo, vol. 22(1), pages 302-324, June.
    7. M. Mabuza & G. Ortmann & E. Wale, 2016. "Frequency and extent of employing food insecurity coping strategies among rural households: determinants and implications for policy using evidence from Swaziland," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 255-269, February.
    8. Sihlongonyane, L.N., 2021. "Evaluating the prospect to hedge maize price risk against the Johannesburg Stock Exchange Commodity Derivatives Market prices: The case of Eswatini," Research Theses 334770, Collaborative Masters Program in Agricultural and Applied Economics.

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