Maize price volatility and on-farm storage in Burkina Faso
The role of grain storage by inventory holders or government agencies in managing price volatility has received a great deal of attention. But the role of on-farm storage on price volatility is not so richly documented, in spite of its importance in rural areas in Africa. In this paper, we merge historical price and household data on maize markets in Burkina Faso to measure the influence of on-farm storage on price volatility. We show how the seasonal management of on-farm storage is responsible for price volatility. We focus in particular on the analysis of carry-over and its impact on price pattern. In an inter-temporal analysis, an unexpected price drop is followed by a decrease in production and tends to stabilize price to its original level. But in a seasonal pattern, an unexpected price drop occurring during the planting season simply delays the sale of existing stocks, without decreasing the production, which generates further price drops later in the year, generally right before the harvest or during the harvest time. We establish that on-farm carryover increases the occurrence of unexpected price drops after harvest.
| Main Authors: | , |
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| Format: | conference_item biblioteca |
| Language: | eng |
| Published: |
s.n.
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| Subjects: | E70 - Commerce, commercialisation et distribution, J11 - Manutention, transport, stockage et conservation des produits d'origine végétale, U10 - Informatique, mathématiques et statistiques, E16 - Économie de la production, |
| Online Access: | http://agritrop.cirad.fr/574627/ http://agritrop.cirad.fr/574627/1/document_574627.pdf |
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| Summary: | The role of grain storage by inventory holders or government agencies in managing price volatility has received a great deal of attention. But the role of on-farm storage on price volatility is not so richly documented, in spite of its importance in rural areas in Africa. In this paper, we merge historical price and household data on maize markets in Burkina Faso to measure the influence of on-farm storage on price volatility. We show how the seasonal management of on-farm storage is responsible for price volatility. We focus in particular on the analysis of carry-over and its impact on price pattern. In an inter-temporal analysis, an unexpected price drop is followed by a decrease in production and tends to stabilize price to its original level. But in a seasonal pattern, an unexpected price drop occurring during the planting season simply delays the sale of existing stocks, without decreasing the production, which generates further price drops later in the year, generally right before the harvest or during the harvest time. We establish that on-farm carryover increases the occurrence of unexpected price drops after harvest. |
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