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Abstract
Livestock pricing policies in many developing countries are often instituted without a
good appreciation of the consequences of such policies for allocative efficiency, output and
trade. This paper evaluates, in a comparative cross-country context, the objectives and
instruments of livestock pricing policy in five sub-Saharan African countries: Ivory Coast,
Mali, Nigeria, Sudan and Zimbabwe during the period 1970-86. It assesses the extent to
which pricing policy objectives have been attained, and also estimates the effects of price
interventions on output, consumption, trade and government revenues in order to draw out
lessons for the future.
The empirical results indicate that in comparison with real border prices, a certain
degree of success was achieved in stabilising real domestic producer prices in the study
countries. The results also show that since the early 1980s, there has been a gradual shift
away from taxation of producers. However, consumers still appear to gain as much as
producers in three of the study countries, with negative consequences for foreign exchange
earnings and government revenues. The analysis reveals the importance of domestic
inflation and exchange rates as key variables for livestock pricing policies and highlights the
need to address the macroeconomic imbalances that cause exchange rate distortions and
high domestic inflation at the same time that direct price distortions are being tackled.