Cereal marketing in Mali benefits from mixed system

The Cereal Market Restructuration Programme (PRMC) launched in Mali five years ago is about to enter its second phase.

The Programme aroused great interest when inaugurated in 1981-82. One of the reasons for this is that Mali was one of the first African countries to attempt to change its entirely government-controlled cereal marketing system (in competition, however, with a flourishing black market) to a mixed system in which the private sector plays an increasingly important role. Another reason is that it was the first time that a number of bilateral and multilateral donors (including Belgium, Canada, USA, EEC, France, Federal Republic of Germany, WFP) had decided to coordinate their measures on an informal basis.

Under PRMC, the Malian agricultural production agency (OPAM), which until 1980 had the monopoly of the cereal market, has maintained its task of supplying the cereal deficient areas and communities (the armed forces, schools, hospitals, prisons). Moreover, in controlling the market, OPAM is called upon to maintain farm-gate prices - an official ceiling price is established after sowing - and to intervene on the market to protect consumers from excessive price increases connected with seasonal or artificially created shortages. The Agency is assisted in its task by donors who, with the creation of PRMC, agreed jointly to provide the equivalent of 50 000 tons of maize per year. Deposited in a common fund, the proceeds from the sale of these cereals give OPAM a margin of financial flexibility, thus making it possible to accomplish its double task.

The numerous analyses and studies of PRMC stress the fact that notable progress has been made in certain areas. For instance, there has been great improvement in political relations between Malian government representatives and the donors who now have consulting functions; also, certain donors joined the group once the programme got under way. OPAM management has evolved: the 1 000 employees of 1979 have dropped to fewer than 700 only five years later, and the operational deficit has been reduced by more than 85 per cent, from more than 4 billion CFA francs in 1984-85. The more efficient management of the vehicle fleet and the cereal storage system has also made it possible to reduce post-harvest losses (12 per cent in 1980) by half, and OPAM measures have been implemented much more rapidly than before. One of the consequences of this more functional management is the gradual homogenization of consumer prices throughout the various regions of the country.

In accordance with the programme's objectives, the marketing of maize, millet and sorghum was liberalized in the first year, but it was only in 1984-85 that the Malian authorities decided partially to liberalize the marketing of rice produced in the irrigation districts of the Mopti rice project. Next year, liberalization should be extended to all domestic agricultural products. Also, farmgate prices and consumer prices have increased more slowly than expected. Studies show that despite the rapid increase in the prices of maize, millet, and sorghum in early 1984 (from CFAF 125 to 165 in six months), consumer prices, in real terms, dropped between 1981 and 1985. This government decision to limit the increase in official cereal prices must, however, be interpreted in the broader context of an IMF financial policy aimed at reducing me Government's budget deficit. Except for a slight increase in 1982, the salaries of government employees have been frozen since the early 1980s: this measure affects some 60 000 families and is equivalent to a salary reduction of 5 per cent a year, which, of course, has made it politically difficult to impose a further increase in cereal prices.

During the three-year drought that has affected the country, OPAM has revealed itself to be an efficient structure capable of coping not only with the increasing volume of cereals offered within me framework of the PRMC, but also with most of the considerable flow of food aid to Mali. The record harvest of 1985-86 took both OPAM and its donors by surprise: after having tried to maintain farmgate prices within the limits of its financial resources, OPAM was suddenly faced with an enormous quantity of cereals, the market price of which was higher than that asked by private traders who had bought them more cheaply.

On the eve of the second phase of the PRMC, this has led several experts to be more flexible in fixing prices so they can be revised during the season in accordance with the available wholesale and retail stocks, or which may differ from one region to another. Such measures would perhaps lead to a reduction in the margin between official consumer prices and private retail prices which has remained virtually the same throughout the five years programme. To eliminate the gap created by sending enormous amounts of food aid, some experts suggest that it would be preferable for donors to provide inputs, in order to enable OPAM to give more direct support to producers.

Finally, in addition to the real success obtained in the past five years by this ambitious programme, numerous experts consider that by applying its present policy the PRMC can neither obtain a real balance between farmgate and consumer prices, nor guarantee on its own a real step ahead in agricultural production. To give it a real boost in a country that at one time was considered the region's cereal storehouse implies making progress in other sectors of the economy, and particularly in the expansion of small and middle-sized enterprises, there must also be a real effort to develop infrastructures, especially roads, which would facilitate trade between the towns and rural areas. Part of the common counterpart funds of the PRMC could be used to finance such projects. In this way the programme, which since the beginning of the decade has gradually taken on a central role in reorienting agricultural policy, could pave the way for other changes in the country's economy.

Dani Blain