Policy or Markets? An Analysis of Price Incentives and Disincentives for Rice and Cotton in Selected African Countries

African governments have intervened extensively in markets through regulations and other price, trade, or marketing policies to provide price incentives to farmers. Using data from the Monitoring and Analyzing Food and Agricultural Policies program, this paper reports nominal rates of protection (NRPs) for rice and cotton at wholesale and farm level in selected African countries between 2005 and 2010. Rice is an import that has received high levels of border protection by the governments concerned while cotton is a key export crop which has been the focus of direct and indirect public intervention. For both commodities, we provide evidence for both market and nonmarket failures. In the case of rice, these prevent border protection from reaching farmers while raising consumer prices. Cotton ginning and marketing is concentrated in a small number of private sector companies in most countries studied. The farm level NRPs provide evidence of market failure in these countries that may be mitigated by policies that set indicative prices and encourage competition. The NRPs indicate nonmarket failure in the two countries that maintain parastatal monopsonies for cotton.