December 15, 2015

Harare – Mbare Agriculture Market

Agriculture often appears to be one of the most difficult industries, frequently leading to some form of market failure. In the EU, agriculture is the most heavily subsidized industry, yet despite the cost of the subsidy it fails to address many issues relating to agriculture such as prices of agricultural produce. Prices in agricultural markets are often much more volatile than other industries. This is because:

1. Supply is price inelastic in short term. (It takes a year to grow most crops)

2. Demand is price inelastic. (Food is essential and people are not usually put off by higher prices) hence even when the prices are high commodities such as leaf vegetables , maize grain and sugar beans(dried) are basic necessities tend to still be demanded even their prices rise the only thing that consumers can do is to reduce the quantity they demand in order to suit their incomes.

3. Supply can vary due to climatic conditions and seasonal changes for example as evidence from the price tracker the price of a dozen green mealies has risen from $1.00 to $1.50 this alone shows that the green mealies supply into the market has reduced due to the seasonal change as we are now in winter with only a few farmer who produce green mealies for the market, furthermore it can also be noted on groundnuts fresh which were been traded at $6.00 per 20L bucket but due the decrease in supply of fresh groundnuts as they are nearing the end of the groundnuts harvesting season hence the price of a 20L bucket of groundnuts has increased from $6.00 to $7.00 per bucket.

Lastly but not least the price of field crops such as Sugar beans and Cow peas which had remained fairly steady over the past two weeks at $15 per 20L bucket has risen to $20 per 20L bucket and $10 per 20L bucket of Cow peas respectively and this could be attributed to the fact the supply of Sugar beans and Cow peas has fallen in the market there by causing the price increase.