Do underdeveloped rural grain markets constrain cash crop production in Zimbabwe? Evidence from Zimbabwe

Abstract

This paper focuses on how production of high-valued cash crops may be constrained by marketing problems in the grain sub-sector. The analysis finds that the higher financial returns to oilseeds as compared with marketed maize production may be negated if the grain marketing system cannot deliver low cost grain to rural areas. The price many rural consumers in semi-arid areas pay for maize (/.<?., the retail price of roller meal) is 110 percent more than for the price which many smallholders sell maize (i.e., the GMB producer price of maize). This difference between producer and consumer prices means that the household value of maize may be quite different depending on whether the household is a grain seller or grain buyer. If the latter, normalising for labour time, oilseed production rarely provides greater returns per acre than maize for home consumption. The consumer price is often the more relevant value of maize in semi-arid areas, where the majority of smallholders are net purchasers of grain.