Analysis of Market Liberalization and the Groundnut Sector in Senegal

In sub-Saharan Africa, agricultural reforms such as market liberalization and loan schemes greatly affect the agricultural and industrial sectors. The withdrawal of government institutions and adoption of structural adjustment programmes (SAP) have not always been a win-win situation for the different stakeholders of the agricultural sector. This paper assesses the influence of market liberalization on the groundnut sector in Senegal. Using market variables including production, marketing and trade, it analyzes the market performance of groundnuts before and after market liberalization in 2010. The coefficient of variation and the corrected coefficient of variation for producer prices were applied and the results show that the values for both coefficient of variation and corrected coefficient of variation were higher in the pre-liberalization period. There was less volatility after market liberalization and prices were much higher in the post-liberalization period. Market liberalization has generally favoured farmers whereas it has been bad for local processing industries. It is necessary for the government to provide alternative policy interventions to achieve inclusive welfare from market liberalization