The impact of food aid on maize production in Swaziland.

Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2007.

The objective of the study was to provide empirical evidence on whether food aid leads to depressed domestic maize prices and reduced maize production in subsequent years in Swaziland. Similar impact studies have been carried out in a number of sub-Saharan African countries but no evidence is available for Swaziland. The lack of empirical evidence has often resulted in premature negative conclusions on the impact of food aid on Swaziland’s maize industry. The study used secondary national data from 1985 to 2006 to analyse the impact of food aid on maize producer prices and quantity of maize produced. Variables used in the analysis included quantity of cereal food aid; quantity of commercial maize imports; quantity of locally produced maize; official maize producer price; open market maize producer price; fertilizer price; fuel price; rainfall; and total area planted to maize. The impact of food aid was measured using the reduced form market equilibrium model that consisted of maize quantity and maize producer price functions estimated simultaneously using the above variables through the two-stage least square method (2SLS) method. Analytical results revealed that food aid to Swaziland does not lower prices of domestic maize and has no significant negative effect on the quantity of maize produced in subsequent seasons. This means that food aid received by Swaziland over the study years has been appropriately targeted and distributed to the food insecure households. If this were not so, the demand for food from commercial outlets would have been reduced, leading to an adverse impact on maize producer prices, and subsequent local maize production. Notwithstanding the above results, Swaziland should still commit resources towards reducing the national food gap. This calls for increased investment in rural irrigation development, improved farmer institutional support services, and the implementation of pro-poor development programs aimed at improving individual household income to reduce the need for food aid, improve food self-sufficiency and vulnerability to food security.