Grain legumes trade and markets: Spatial and temporal analysis for common beans trade in Tanzania and its neighbors
Abstract
Cross border trade of agricultural commodities between Tanzania and its neighbors remains active resulting in substantial volume of bean flow across the borders. If the trade in beans from Tanzania would result into net outflow then bean prices would rise in Tanzania limiting access to this source of cheap protein among the majority of Tanzanians. An Eastern and Southern Africa Bean Spatial and Temporal Equilibrium model was formed with Mixed Complementary Programming and was used to examine potential impacts of changes in (i) real interest rate, (ii) levels of non-tariff barriers, and (iii) levels of demand and supply on prices, volume and direction of common bean (Phaseolus vulgaris L.) trade between Tanzania and its neighbors Uganda, Zambia, Kenya, Rwanda, Burundi, DR Congo, Malawi and Mozambique. Three regional blocs were used in modeling the policy scenarios - namely the COMESA, SADC and EAC. Bean production and market data for years between 1995 and 2003 were used for analysis. It was found that adopting a real interest rate of 10% did not increase the volume of bean trade between Tanzania and its neighbors as was hypothesized. Elimination of non-tariff barriers was found to have a positive impact to the welfare of bean producers and traders but did not have a significant impact on boosting beans supply in the region. However elimination of all non-tariff barriers in all of the countries increased bean trade between Tanzania and its neighbors by over 30%. Increasing bean supply in the region by 10% resulted in a decrease in consumer demand price in Zambia of about 27% which was more than twice what was hypothesized. Lowering transportation cost by 10% did not create a significant change in the volume of beans traded in the region. From the findings, it is evident that any policy formulation aimed at promoting bean trade and markets between Tanzania and its neighbor should target elimination of non-tariff barriers to trade either among COMESA member countries, SADC member countries and/or the EAC member countries. Elimination of non-tariff barriers in all countries would promote beans trade most.
Degree
Ph.D.
Advisors
Lowenberg-DeBoer, Purdue University.
Subject Area
Agricultural economics
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