Market impact on cassava's development potential in the Atlantic Coast region of Colombia

The impact of markets on agricultural development was analyzed by means of a case study on cassava in the Atlantic Coast region of Colombia. In the development process, the demand for agricultural products changes considerably. Traditional food products, such as roots and tubers, face a decreasing demand in the course of urbanization and income growth. Feed grains and animal products face a growing demand. The agricultural sector is often not able to adapt to these demand changes and imports result. In case the structure of agriculture is dualistic, small farmers might be harmed and large farmers benefitted by these changes. This leads to unbalanced agricultural development. Market improvement strategies directed to small farm products might correct part of the unbalanced development.

Cassava in the Atlantic Coast region is a small farm crop which faces severe market(ing) problems in the development process. Fresh cassava consumption, the traditional utilization, decreases because it has a high marketing margin, because it has to be bought on the day of consumption and because other products become more widely available.

Two market improvement strategies for cassava are evaluated: improvement of the traditional fresh cassava market by means of improved storage; opening the market for dried cassava as an animal feed in order to replace sorghum. To study the impact of these strategies the role of cassava in the Atlantic Coast region is analyzed within a systems framework. The interactions that are found between production, marketing and consumption are strong. Cassava production will be stimulated by the price stabilization that the establishment of a cassava drying industry will cause. The improvement of cassava's storage characteristics will decrease marketing costs, increase consumer convenience and, therefore, stimulate cassava consumption.

Because of the interactions encountered, the impact of cassava market improvements cannot be measured in the market alone. An analysis of the cassava system that integrates production, marketing and consumption is needed. The integrated analysis is made by means of a multi-market, multi-farm type simulation model. The model forecasts the impact of market improvement strategies given different assumptions on the development of the Atlantic Coast economy and on the cassava systems behavior. Cassava drying for animal feed is a strategy, which explicitly benefits cassava producers. Additionally Colombia could save on sorghum imports. Improvement of the fresh market would most benefit urban consumers. Considering the rural-urban migration problems of Latin America, cassava drying appears the most attractive strategy.

Both market improvement strategies have very favorable rates of return. Market improvement projects might serve additionally as a diving board for further rural development efforts. Increased attention to the role of markets could contribute to fulfilling the goals of agricultural development and to balancing overall economic growth.