Dynamics and Trends of National Food Reserve Agency Maize Price and Local Maize Market Price: Empirical Evidence from Sumbawanga Market

Abstract

The general objective of this study is to analyse spatial maize price transmission
and market integration in Tanzania with Rukwa Region as the case study. Thus,
the study intended to assess dynamics and trends of National Food Reserve
Agency maize price and local market maize price between Sumbawanga (the
surplus market) and other selected deficit markets from 2008-2017. Monthly
maize price data came from the National Bureau of Statistics and National Food
Reserve Agency purchase books price records in Rukwa Region. The Vector
Autoregressive (VAR) Model, granger causality and impulse response methods
were used. Results indicated that National Food Reserve Agency’s price granger
caused local market maize price per ton and not otherwise. Impulse Response
Functions indicated that the National Food Reserve price per ton had positive
transitory and permanent impact on local maize market price per ton. The
government should set enough money for more and timely National Food
Reserve Agency grain reserves purchase; remove export bans; and improve
communication, transport, marketing and storage facilities in surplus areas.