Price incentives, non-price factors and agricultural production in sub-Saharan Africa: A cointegration analysis

This paper deals with the question of how responsive farmers in sub-Saharan Africa (SSA) are to changes in incentives. Employing Johansen's multivariate cointegration approach and covering the period 1965-99, it investigates for ten selected SSA countries the long-run effect of pricing policies, macroeconomic distortions, and certain non-price factors on agricultural production. It turns out that - in those cases where cointegration relationships are found - estimated supply elasticities tend to lie between 0.20 and 0.50. Among the non-price factors, drought episodes have significantly impaired agricultural growth in six out of ten sample countries. Technical progress as measured by a simple deterministic time trend has only had a minor impact on output.