# SUMMARY AND CONCLUSIONS

1. Many countries in Africa and elsewhere have established marketir.g boards for the purchase and disposal of major agricultural crops. Many employ the boards as a device for raising public revenue, prices to farmers being set sufficiently lcw to yield a profit to the board after all its expenses (purchase, storage, processing, transport) have been covered. Implicit in the marketing boards' pricing policy and the way in which it is implemented there are prices for transport services. The research investigates the efficiency and the consequences of different systems of these implicit incentives.

2. Agricultural production is spread over space. The provision of transport (infrastructure and services) and the pricing of transport to farmers affect the extensive margin of cultivations, and thus also the total volume of transport and hence the demand for transport investments. Further, marketing boards typically buy from farmers at depots distributed over space. The location of depots, in combination with transport pricing to farmers, is capable of affecting the productivity of the agricultural sector and of transport investments. Thirdly, the timing of transport in the process of evacuating the crop from different locations, can affect the aggregate productivity of agriculture or, equivalently, the social cost of raising revenue from agriculture. It can also affect the resource cost of agricultural transport.

3. In all these respects, one may therefore search for optimality rules, for rules of price policy, location of depots and the logistic ordering of crop evacuation, which together minimize the deadweight loss asso' :ated with the taxation of agricultural output, for given levels of state revenue. The study therefore states certain optimality rules. It proposes diagnostic tests that can be app!ied (or diagnostic questions that should be asked) to arrive at reasonably strong presumptions about the optimality or otherwise of existing arrangements **in** the pricing of transport, the distribution of depots and the logistics of crop evacuation, and thus of the rationality of arguments for public expenditures on transport that arise in given circumstances.

# **Pricing Policy**

4. The polar extremes of marketing board purchase pricing policies are, at one end, a uniform price per unit of output paid at one single point of delivery (say, the port), and, at the other end, a uniform price paid per unit of output wherever in the country it is produced (more realistically, at every marketing board depot throughout the country). Under the first system, the farmer pays the full cost of transport to the port. Under the other system, transport from the nearest depot to the port is paid by the marketing board. The latter is the widely practiced policy of panterritorial pricing and it implies a (full) subsidy of transport cost. The study assesses the effects of panterritorial pricing empirically, on the data of one country, the Cote d'Ivoire and one of its chief export crops, cotton. Only the elasticity of supply of cotton farmers could not be estimated (panterritorial pricing itself suppresses relevant information since prices are not allowed to vary over space) but had to be assumed, and assumed constant, and subjected to sensitivity analysis.