Effects of trade and exchange rate policies on agriculture in Zaire

The study, based on official time series data, examines in turn: (1) the Zairian agricultural sector, its importance and performance (the growth of farm output, exports and imports, and the food supply situation); (2) Zairian economic policies, including macroeconomic and trade policies, price control and marketing arrangements, and other government policies; (3) definitions and measures of agricultural price interventions; (4) methodologies for estimating the incidence of trade and exchange rate policies on relative agricultural prices; and (5) the trade-off between food and export crops. The major lesson to be drawn from the study is that the real exchange rate is a critical variable which should be maintained through fiscal, monetary, and other economic policies at a level that will encourage both farm sector and overall economic growth. Also, policymakers should strive for uniform treatment of all tradeables if the production of these commodities, as well as of nontradeables, is to be enhanced.