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Abstract
The interaction between macroeconomic and trade issues and agriculture is not well
understood. In sub-Saharan Africa, this relation becomes critical in recent structural adjustment
programmes, especially in countries where agriculture is the mainstay of the economy. This paper
examines empirically examples of a non-liberalized economy and a gradually liberalizing economy in the
region. It demonstrates that a sufficiently monolithic and inefficient agricultural marketing structure
results in the slow transmission of foreign exchange gains to farm gate prices that constrain potential
supply response. Monetary policy impacts seem to be a function of greater macroeconomic liberalization
than non-liberalization, especially when, in the latter case, domestic currencies are pegged directly to
foreign currencies.