Food Prices, Road Infrastructure, and Market Integration in Central and Eastern Africa

Portugal-Perez, Alberto; Brenton, Paul; Regolo, Julie

Food Prices, Road Infrastructure, and Market Integration in Central and Eastern Africa

Autores

Portugal-Perez, Alberto

Brenton, Paul

Regolo, Julie

Editor

World Bank Group, Washington, DC

Descripción

Market integration is key to ensuring sufficient and stable food supplies. This paper assesses the impediments to market integration in Central and Eastern Africa for three food staples: maize, rice, and sorghum. The paper uses a large database on monthly consumer prices for 150 towns in 13 African countries and detailed data on the length and quality of roads linking the towns. The analysis finds a substantial effect of distance and share of paved road on the level of market integration, as measured by relative prices. Furthermore, the paper evaluates the additional domestic and cross-border impediments to market integration in the region and represents them on a regional map. The analysis finds heterogeneous levels of domestic market integration across countries and significant "border effects" for the majority of contiguous countries in the sample, which reveal that markets are more integrated within than between countries. Countries that are members of the same regional trade agreement have substantially "thinner" borders with other members. Finally, the analysis shows that countries with less integrated domestic markets and "thicker" borders with their neighbors also have a higher prevalence of food insufficiency. These findings support policy efforts in tackling domestic and border impediments to transactions such as reforming customs, simplifying nontariff measures, addressing corruption, improving the quality of roads, and deepening regional trade agreements.

Palabras clave

ACCESS TO MARKETS, ACTIVE MARKET, AGRICULTURAL COMMODITIES, AGRICULTURAL ECONOMICS, ARBITRAGE, AVERAGE PRICE, BOTTLENECKS, CASH TRANSFERS, COMMERCE, COMMODITY PRICE, COMMODITY PRICES, COMMON MARKET, COMPETITIVE MARKETS, COMPETITIVENESS, CONSUMER PRICE, CONSUMER PRICES, COST OF TRANSPORTATION, CROSSING, CURRENCY, DEVELOPING COUNTRIES, DOMESTIC MARKET, DOMESTIC MARKETS, EXPORTER, FAIR, FOOD AID, FOOD COLLECTION, FOOD INSECURITY, FOOD MARKETS, FOOD POLICY, FOOD PRICES, FOOD PRODUCTS, FOOD SECURITY, FOOD SHORTAGES, FOOD STAPLES, FOOD SUPPLIES, FOOD SUPPLY, FOOD SURPLUS, FOOD TRANSFERS, FUEL, FUEL CONSUMPTION, GOVERNMENT INTERVENTION, GOVERNMENT INTERVENTIONS, GOVERNMENT REVENUES, HAZARD, INPUT PRICES, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, JOURNEY, LACK OF COMPETITION, LOCAL CURRENCY, LOCAL FOOD PRODUCTION, MAIZE, MARKET COMPETITION, MARKET EQUALS, MARKET IMPEDIMENTS, MARKET INTEGRATION, MARKET POWER, MARKET PRICE, MARKET SEGMENTATION, MARKET SIZE, MARKETING, MILLS, OPPORTUNITY COSTS, POLITICAL ECONOMY, POTATOES, PRICE ADJUSTMENTS, PRICE CHANGES, PRICE DIFFERENTIAL, PRICE DIFFERENTIALS, PRICE INDEXES, PRICE LEVEL, PRICE SETTING, PRICE VOLATILITY, PURCHASING, REAL EXCHANGE RATE, RESERVE, RESERVES, RETAIL, RETAIL PRICE, RETURN, ROAD, ROAD INFRASTRUCTURE, ROAD LENGTHS, ROAD NETWORK, ROAD QUALITY, ROAD_QUALITY, ROADS, RURAL MARKET, SAFETY, SAFETY NET, SPEEDS, STAPLE FOODS, SUBSTITUTION, SURPLUS, SWEET POTATOES, TELECOMMUNICATIONS, TRADE LIBERALIZATION, TRADE REGIMES, TRADING, TRAINS, TRANSACTION, TRANSACTION COST, TRANSACTION COSTS, TRANSACTIONS COSTS, TRANSPORT, TRANSPORT COSTS, TRANSPORTATION, TRANSPORTATION COSTS, VEHICLES, VOLATILITY, WFP, WHEAT, WHOLESALE PRICES