Price Signals and Supply Responses for Staple Food Crops in Sub-Saharan Africa

We investigate the supply response for main staple food crops in Sub-Saharan Africa over the period 2005-2013 using an innovative dataset recently developed by FAO’s “Monitoring and Analysing Food and Agricultural Policies” (MAFAP) programme. Relying on dynamic panel techniques, we observe that acreage, production and yields respond to price signals, even if with a limited intensity. Moreover, we find that direct price incentives arising from border protection, government interventions in domestic markets, and price shocks at the border stimulate farmers’ supply. We also show that omitting transaction costs from the analysis leads to underestimation of the price elasticity of supply. Conversely, using wholesale instead of farm gate prices as proxy for producer prices leads to overestimation of this price elasticity.