Public buffer stocks as agricultural output price stabilization policy in Ghana

Abstract

Abstract Background Food price volatility poses widespread risks, from farmers to consumers, notably in developing countries. Because of its devastating effects on sustainable farming and food security, particularly for the poor, it continues to be a crucial policy priority. Governments have applied various methods of stabilizing domestic food prices including publicly held buffer stocks, import and export tariffs and production supports. This study evaluates Ghana’s agricultural output price stabilization policy implemented in the context of the National Buffer Stock Program. Results Based on data from the Ministry of Food and Agriculture, we apply the coefficient of variation and the corrected coefficient of variation to analyze the volatility of output prices of maize and rice. The results show that the price volatility of maize and rice has declined in the markets where the policy has been implemented but not in the non-policy markets. Conclusion There is, therefore, empirical evidence that the policy has been successful.

Keywords

• Agricultural output
• Price volatility
• Price stabilization policy
• Buffer stock
• Coefficient of variation
• Augmented Dicky–Fuller test