The Negative Effects of Inappropriate Price Stimulation; The Case of Senegal: Rice Price Increases to Encourage Production May Harm Families of Non-responsive Subsistence Farmers |
| |
| Authors: | Curtis M. Jolly Oumar Diop |
| |
| Affiliation: | [Curtis M. Jolly, Ph.D., is assistant professor of economics, Auburn University, Auburn University, AL 36830;Oumar Diop, dipl. eng., is an agricultural engineer on the staff of the Institut Senegalais de Recherche Agricole (ISRA). The research was conducted while Dr. Jolly was on a USAID contract and attached to ISRA from 1982-1985). The authors thank Henry Kinnucan, John Adrian and Lowell Wilson, and two anonymous referees, for their helpful suggestions. Any remaining errors are, of course, the responsibility of the authors. |
| |
| Abstract: | Abstract . Some governments of developing economieshzve been encouraged to use pricing policy to stimulate increases in food production. It is not known whether all subsistence farmers in those countries operate in an economic, financial and technological environment in which they can respond positively to price increases. In this paper models were used to demonstrate two situations: one in which farmers responded to price stimulation and another where price increases were ineffective, costly and produced results inconsistent with national goals. Data from the Basse Casamance Region in Senegal were used to show that farmers were not responsive to price changes and were net purchasers of grains. The study concludes that unless farmers' supply curves were shifted to the right—that is, that they meet more of their own subsistence needs—recent Senegalese government rice price increases could be harmful to the farm family. |
| |
| Keywords: | |
|
|
