Policy reforms, market failures and inputs use in African smallholder agriculture

This article highlights a number of problems related to agricultural market liberalisation in Africa. Poor infrastructure and dispersed settlements have limited the capability of the private sector to cover the ground left by state withdrawal, especially in agricultural input and credit markets. The elimination of subsidies and currency devaluations have resulted in higher prices and reduced use of inputs. Access to seasonal credit for input purchases is disappearing. Yet, while there has been an increasing recognition of the factors that inhibit the functioning of these markets, the majority of policy recommendations are still advocating the transition to a purely free market’ situation in Africa. On the contrary, this article argues that solving market failures in input distribution and credit provision requires new and fine-tuned forms of public intervention, such as the promotion of input trust funds. © 2001 European Association of Development Research and Training Institutes.