African Maize Supply Response to the World Price

This thesis empirically examines the supply response of maize in Africa to the changes in the world price of maize. Secondary data have been analysed for eight African countries of Burundi, Cameroon, Kenya, Mali, Morocco, Rwanda, South Africa, and Togo. We have specified and estimated a fixed effect regression model, which is among the panel data model structures. The main findings of the thesis are as follow. First, the supply response of maize in Africa depends on two factors namely; maize producer price and maize acreage. Second, maize farmers have been found to be responsive to producer price changes in the short run which means that if prices increase, farmers respond by raising maize production and acreage. This ensures that there is food security in subsequent planting seasons. Third, whereas the maize supply has been found to be inelastic in the short run (elasticity being equal to 0.162), the supply has been found to be elastic (1.12) in the long run. We conclude from our empirical findings that the maize output will increase in the long run majorly as a result of increasing output per unit area, thereby making acreage boom leading to the maize output growth in Africa. Keywords: Maize, Africa, Supply response, Food security, Price incentives.