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Successes and Challenges of Food Market Reform: Experiences from Kenya, Mozambique, Zambia, and Zimbabwe

Governments in Eastern and Southern Africa have fundamentally transformed their food economies over the past decade. Despite the accumulation of empirical analyses showing that the food market reforms have generated some impressive achievements, these conclusions remain controversial and contested by important policymakers in each country in the region. The reforms have created acute political dilemmas for governments amidst protests to protect important groups whose interests are perceived to have been threatened by the reforms. As a result, policymakers have faced difficult decisions in defining a consistent and effective role for the state in the newly emerging food marketing systems.

The major challenges facing policymakers in the region are: (1) how to design agricultural marketing systems to better serve as a catalyst for farm productivity growth, particularly for smallholders; (2) how to cost-effectively deal with price instability for both consumers and producers in a liberalized marketing system; (3) how to develop the commitment to a consistent and stable policy environment to support long run private investment and insulate the new systems from disruptive policy lurches in response to short-term political crises; and (4) how to design a process of collaboration between policymakers, donors, researchers, and the private sector to maximize the probability of achieving improved agricultural policy and performance over time. A key feature of each of these challenges is the need for a better understanding of how to stimulate private investment in the food system. A better understanding of how government actions affect private incentives may be critical to avoid situations in which perceptions that “the private sector will not respond” become a self-fulfilling prophesy.