Effect of Price Liberalization Policy on Instability and Growth of Agricultural Production :A case Study of Gezira Scheme

Abstract

Sudan as one of the developing countries which depends entirely on agricultural sector which is the leading sector of Sudanese economy, it represents about more than 39% of gross domestic product (GDP). Gezira scheme is the largest, oldest and most important irrigated Agricultural schemes in Sudan and also the largest farm in the world under one single management Sudan Gezira Board (SGB). The productivity of most of the agricultural crops in Gezira is low and heavily fluctuating throughout the years. The study primarily focused on the extent and nature of growth that has actually taken place and the extent of yield variability in Gezira scheme consequently after the adoption of prices liberalization policy. The study covers the Pre-Prices Liberalization Policy Period, i.e. 1979/80 to 1991/92 and the Post-Prices Liberalization Policy Period, i.e. 1992/93 to 2004/05. Analysis is based on secondary data on area, production and productivity of principal crops that taken from the department of agricultural statistics and planning, Ministry of Agriculture and Forestry, Sudan Gezira Board (SGB) and library of Faculty of Agriculture, Khartoum University. The researcher applied regression model to measure the growth rate and percentage of fluctuations of agricultural production and the relationships between them by using Statistical Package for Social Science (SPSS) and (EXCELL) Programmes. The findings of the study are as follows:- 10 Changes in agricultural production are mainly due to fluctuations in productivity per feddan which influenced not only by price policies, also environmental factors such as amount and distribution of rain fall, pests, diseases and technology used in production. Increasing fluctuation rate of agricultural production due to change in area and productivity. The instability in area and productivity of most crops move in the same direction, and their increasing/decreasing trend resulted in increase/decrease in instability. Hence, it may be said that the increase in production of a particular crop due to a spectacular increase in area and productivity would accompany the increase in instability also, but an increase in production largely due to the increase in productivity would help declining production instability. Relationship between growth and instability indicated that the increase in production mainly due to an increase in productivity had positive relationship but the increase in production due to an increase in area and productivity had negative relationship between growth and instability in production of a particular crop. The study recommended the following: * To formulate and adopt a sound prices policy aiming to sustainability of stabilization. * The stability in production may be achieved by increasing productivity without a decline in area in a particular crop, also through the investment in agricultural research. * To rehabilitate the infrastructure of the Gezira scheme and carry out institutional reforms to facilitate production efficiency. * Vertical expansion for main crops in Gezira scheme using improving varities.