Reforming agricultural policy: lessons from four countries

By Lidia Cabral, Colin Poulton. Steve Wiggins, Linxiu Zhang
July 2006

Comparing reform of agricultural policy in Bangladesh,Chile, China and New Zealand, this paper derives lessons for countries contemplating reform. In all cases reforms to farm policy were undertaken as part of overall reforms across the whole economy, started in response to a perceived national crisis and usually implemented by new governments with a mandate to make major changes. Political will is, not surprisingly, anecessary condition.In designing reforms and their implementation, much depends on context, including external conditions such as world market prices.

The scope for change, and certainly the sequence and pace of reform, may be as much a matter of administrative feasibility as choice.Where outcomes are uncertain and state capacitylimited, gradual approaches to reform that allow for learning may be better than swift and comprehensive .‘big bang’ . packages. This working paper presents the first stage of a review of agricultural reform experiences within African countries, specifically Ethiopia, Kenya and Malawi. Itaims to draw out issues for would-be reformers by examining the experience of four cases of agricultural reform, purposely selected as often being seen assuccessful. These are:

• Reform of agricultural input markets in Bangladesh inthe early 1980s, followed by liberalisation of graintrading and the cancellation of several longstanding programmes of public distribution of grains during the late 1980s and early 1990s;

• The impact of economy-wide reforms and counterr eform of land on Chilean agriculture from 1973through to the 1980s;

• Introduction of the ‘household responsibility system’of production and liberalisation of marketing in China startimg around 1978;