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The challenges of managing agricultural price and production risks in sub-Saharan Africa

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  • Antonaci, Lavinia
  • Demeke, Mulat
  • Vezzani, Antonio

Abstract

Agricultural production is prone to several risks which affect both producers and consumers. In order to enhance investment and achieve a sustained increase in production, coherent and integrated long-term strategies and policies are required to reduce risk aversion and build resilience among African rural producers. Furthermore, the critical importance of social protection and its complementarity to risk management initiatives must be recognised. This paper investigates possible tools and instruments to deal with various production and price risks. Market-based approaches are crucial for risk management options to thrive, but the country experiences examined have highlighted that most of the risk management instruments are not in place or are not fully developed in Sub-Saharan Africa. Farmers are not protected against production and price shocks and this underscores the critical role of governments in agricultural risk management. In view of the high correlation between production, price and market risks, African governments need to adopt an integrated and holistic approach in support of risk management interventions through incentives and by strengthening agricultural markets and financial institutions. Risk management tools need to be mainstreamed into agricultural policies and programmes as currently advocated by the New Partnership for Africa's Development (NEPAD) Planning and Coordination Agency (NPCA).

Suggested Citation

  • Antonaci, Lavinia & Demeke, Mulat & Vezzani, Antonio, 2014. "The challenges of managing agricultural price and production risks in sub-Saharan Africa," ESA Working Papers 288979, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    • Handle: RePEc:ags:faoaes:288979
    DOI: 10.22004/ag.econ.288979
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    Cited by:

    1. Sanusi, Olajide I. & Safi, Samir K. & Adeeko, Omotara & Tabash, Mosab I., 2022. "Forecasting agricultural commodity price using different models: a case study of widely consumed grains in Nigeria," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(2), June.
    2. Martey, E., 2018. "Heterogeneous Demand for Quality Soybean in Northern Ghana," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277013, International Association of Agricultural Economists.
    3. Md Mehedi Hasan Emon & Golam Mustafa MD. Nurullah Rabbani & Fardin Aziz & Saleh Ahmed Jalal Siam, 2023. "Investigating The Role Of Information Systems In Supporting Agricultural Development And Food Security In Bangladesh," Big Data In Agriculture (BDA), Zibeline International Publishing, vol. 6(1), pages 26-35, November.
    4. Yohannes Girma & Berhanu Kuma & Amsalu Bedemo, 2023. "Risk Aversion and Perception of Farmers about Endogenous Risks: An Empirical Study for Maize Producers in Awi Zone, Amhara Region of Ethiopia," JRFM, MDPI, vol. 16(2), pages 1-29, February.
    5. Shiferaw, Y., 2018. "The Bayesian MS-GARCH model and Value-at-Risk in South African agricultural commodity price markets," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275991, International Association of Agricultural Economists.
    6. Dinh Xuan Cuong & Nguyen Quoc Toan, 2016. "Derivatives as the Price Fluctuation Risk Management for Vietnamese Coffee Exporters," Research in World Economy, Research in World Economy, Sciedu Press, vol. 7(1), pages 59-79, June.

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