An assessment of rural development policy options in Mozambique

The current national development strategy of Mozambique emphasises the role of agriculture and rural development in promoting growth and alleviating absolute poverty. In response to the major structural constraints identified, the pillars of this strategy are the enhancement of agricultural productivity and the improvement of transportation infrastructure. To date, research on the potential impact of these investment options has been limited to national aggregated models that overlook the striking regional diversity.; The purpose of this research is to assess the impact of these alternative rural development policy options on the different provinces of the country. A spatial equilibrium model was developed for Mozambique on the basis of a programming structure developed by a group of researchers at the International Food Policy Research Institute. The model simulates the market equilibrium conditions for five food commodities in the ten provinces of the country. Compared to the existing modelling work for Mozambique, the data quality and the level of detail for the food sector are considerably improved. The data discrepancies in provincial level statistics obtained from heterogeneous sources are reconciled by using an optimisation model. The demand parameters are estimated econometrically with a food demand system, using data from the first nationally representative household survey.; After calibrating the spatial equilibrium model for the 1996 benchmark year, three sets of simulations are conducted. The first assesses the impact of investments in the transportation network. The second set simulates the effects of agricultural intensification policies. The third set combines the two previous policy options. The results suggest that agricultural intensification should be given priority in order to raise income and consumption. The reduction of trade barriers alone does not appear to spur production and raise farm income as much as agricultural intensification. At the same time, the results indicate the importance of export options for the northern provinces. The regional effects pinpoint the major divide between northern provinces, on the one hand, and southern provinces, on the other, stressing the relevance of a spatial disaggregation in rural policy analysis.