Bean supply response for Mozambique

Manuel Duarte Filipe, Purdue University

Abstract

There is an opportunity for Mozambique to export to the flourishing South African bean (Phaseolus vulgaris L) market, which imports significant quantities of beans from as far as Argentina, China, and Canada. Mozambique, informally, exports substantial quantities of its beans to Malawi, and possibly Tanzania and Zambia, receiving about $400/ton less than what the South African market is paying for its beans. All indication is that the quality of Mozambican beans is as good as, if not better, than most South African imports. It is plausible that under the Southern African Development Community (SADC) cooperation policies, Mozambique can redirect some of its bean exports towards South African markets; however, little is known about the Mozambican ability to respond to South African demand. This study aims at examining the bean supply response potential of Mozambique. A mathematical programming analysis of representative farms in bean growing areas was used to explore the bean production potential. Bean growers in all major bean producing areas in Mozambique were interviewed to provide production data for the study. Results indicated that in general bean production responds to price increases in the price range up 15Mt/Kg. Up to that price a, 1 percent price increase leads to an approximately 0.38% quantity increase. Beyond 15 Mt/Kg, supply is inelastic. The key constraint is scarcity of labor and capital in the rural areas. The fact that land is easily available for farmers creates a situation in which everyone wants to farm their own land, leading to labor scarcity. Also the technology is rudimentary, based on the use of hoes, axes and manual labor, which prevents farmers from cultivating larger farms. Farmers cultivate land areas varying from 0.25 to 5 hectares, with the majority farming about 2 ha. Results also indicated that when the labor constraint is relaxed, that is when the labor requirement is cut in half across activities, supply increases by 21%. When labor and capital are relaxed together, supply increases by 100%. These results indicate that bean supply will benefit from technology developments in Mozambique, especially the technologies aiming at improving labor productivity, such as animal traction, or yield increasing technologies, such as improved varieties. In terms of the Mozambican potential for exporting beans to South Africa, it was determined that in general Mozambican beans could be delivered for less than $700/Ton (17500 Mt/Ton), which is the free on board bean price at the Durban port for imported beans as of late 2004 (the most recent published data).

Degree

Ph.D.

Advisors

Lowenberg-Deboer, Purdue University.

Subject Area

Agricultural economics

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