AGRICULTURAL POLICY INSTRUMENTS AND AGRICULTURAL PRODUCTION IN MOZAMBIQUE

Agriculture is one of the most important sectors of the Mozambican economy, directly affecting not only the lives of millions of Mozambicans, whether at the level of employment and income generation, food, and diet of the population or at the level of some national accounts. This sector, however, remains underdeveloped. The guidelines for the agricultural sector set forth in the agrarian policy are little considered in the different plans, programs, and projects that have been implemented in the sector, which are often based on current acceptable theoretical thinking, the international market´s needs and suffering pressures from international public and private actors and financial institutions. However, throughout these strategies for the implementation of the agrarian policy, the policy instruments remain the same. The objective of this thesis is to analyze the dynamic effects of variations in agricultural policy instruments of pricing, funding, and technology on agricultural production in Mozambique, in the short run. To achieve this objective, the author used an Autoregressive Distributed Lab (ARDL) model. The model results suggest a positive relationship between agricultural production per capita and chemical input use, producer price index, agricultural credit, and lagged agricultural GDP; a negative relationship between agricultural GDP per capita and international commodity price index, rural population growth rate, and agricultural land; and a non-significant relationship between agricultural production per capita and agricultural exports, agricultural investment, and agricultural gross fixed capital formation. Some of the results are consistent, and some are not, with the empirical evidence found by other authors in Mozambique and in other countries. Nevertheless, the results may be biased given the small sample size.