ABSTRACT
THIS CHAPTER 1 Discusses the nature of markets, how and why governments tend
to intervene in agricultural markets to affect prices, and the results of those interventions
2 Explains the importance of efficient marketing systems and describes how marketing systems have changed over time in developing countries
3 Considers the role that government can play in providing marketing infrastructure, market information, marketing services, and regulations
PRICING POLICIES Food and agricultural prices are major determinants of producer incentives and real incomes in developing countries. These prices are influenced by government policies and by the efficiency of marketing systems. Pricing policies and marketing systems have changed significantly over the past thirty years, especially in response to domestic budgetary and global market pressures. The roles of government, processors, wholesalers, and retailers are changing. Governments in some
developing countries continue to adopt pricing policies that reduce food prices for urban consumers even if farmers are forced to bear the costs. In other developing countries, increased integration into global markets has resulted in freeing up of prices and in new approaches to processing, marketing, and regulating farm commodities and products. Ironically, in many developed countries where farmers are a much smaller proportion of the population, government price interventions continue to support agricultural prices, often at the expense of taxpayers and consumers, and in some cases with deleterious effects on developing countries. Why do we observe these policies? How are they implemented, and what are their short-and long-run effects? These questions are addressed below, followed in the next section by a discussion of the roles of agricultural marketing systems and how those systems have changed over time.
