Economic problems and a severe drought negatively affected Sudan, a largely agricultural country. Prior to the drought, the Government enacted a series of policy reforms to improve agricultural productivity and increase exports, including adjustments in exchange rates, higher producer prices, institutional changes in the irrigated subsector, and reduction of consumer subsidies on wheat bread, petroleum products, and sugar. The structural diversity of Sudan's agricultural sector in terms of locus of decisionmaking, input and output price determination, and use of imported inputs, however, worked against across-the-board reform. The severity of the drought also blunted the effects of policy changes--reducing agricultural production, increasing food dependency on foreign suppliers, and causing massive population dislocation. After the drought, policy options remaining open to the Government focus on achieving higher export earnings and a greater degree of food self-sufficiency.