The State and Agricultural Markets in LDCs: An Interventionist or Laissez-faire Approach?

Abstract

Whether states should or should not intervene in agricultural markets is not the key question discussed in this chapter, as all developed and developing states in practice do so (Mackintosh 1990). How and to exactly what extent market intervention should take place to promote economic growth and social equity is a more meaningful question, but the answers would obviously run the risk of falling into generalized policy prescriptions and blueprint solutions. This chapter deals with the problematic nature of market intervention policies and the relation between ‘well-intentioned policies’ and ‘perverse effects’ (Timmer 1991: 15). What follows is an investigation of the dynamics of the impact that market intervention has on the production, marketing and consumption of agricultural commodities, emphasizing the importance of the actual organization of the markets involved and the institutional context in which policies are implemented.