Macroeconomic Policies And The Agricultural Sector In The Sudan With Specific Reference To The Export Sub-sector (1970-1995)

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This paper seeks to address the effect of government intervention on the agricultural sectorrnwith particular reference to the export sub-sector at the aggregate and crop levels in thernSudan. In the study 5 major export crops were examined. The intervention was analyzedrnthrough sector specific and macroeconomic policies. From the analyses it was quiternevident that agricultural exports have been taxed directly through trade policies, exportrnregulations, price and market controls; and indirectly through unfavorable exchangernrates on export and import tariffs and quotas on non-agricultural goods. Exchange raternwas overvalued during the period of the study, this overvaluation has been relaxed inrnrecent years due to trade liberalization and flexible exchange rate system. The implicit taxrnon agricultural exports is extensively more higher than the direct one.rnrnFurther analysis was done using Ordinary Least Square estimates. Most of the data werernnon-stationary and the variables of interest were co-integrated and therefore, Engle Grangerrnmethods of error correction model was used. Agricultural export share on currentrnGDP respond positively to the relative prices of agricultural goods, the response at croprnlevel is stronger than at aggregate level. Labour force has a positive effect in some casesrnand negative in others. Export share adjusts with terms of trade shocks in the short-runrnbut inefficient policies caused disequilibrium in the long-run. The protection rates have rna negative effect on the export share, and this share was declining through time.

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Macroeconomic Policies And The Agricultural Sector In The Sudan With Specific Reference To The Export Sub-sector (1970-1995)

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