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The impact of market reforms on the Senegalese peanut economy
Author(s) -
Hathie Ibrahima,
Lopez Rigoberto A.
Publication year - 2002
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.910
Subject(s) - subsidy , economics , production (economics) , welfare , agricultural economics , structural adjustment , economic reform , social welfare , market economy , macroeconomics , political science , law , china
Abstract This article assesses the welfare impacts of structural adjustment‐induced peanut market reforms in Senegal. In the pre‐reform period, by keeping peanut prices low, price regulation favoured urban dwellers and processors to the detriment of farmers, although the latter benefited from subsidized credit and inputs. With the reforms, peanut prices increased but the ensuing benefits to farmers were outweighed by higher production costs. Consumers gained due to access to cheaper, imported vegetable oil and processors lost due to excess capacity from lower peanut production. Overall, social welfare decreased illustrating that unfettered market reforms can be detrimental when supportive market institutions are eliminated without addressing alternatives. Copyright © 2002 John Wiley & Sons, Ltd.