Reg No: R102430D
Programme: HEC 3
Course: Econ 311
Justify the case for OR against the privatisation of commodity marketing boards, citing Zimbabwean experiences with specific agriculture parastatals.
Privatisation may mean the transfer of government enterprise or assets to private sector enterprise, that is the reduction of government and consequently increase the role of private sectors in an activity or in ownership of assets and their management. Commodity marketing boards are responsible for the distribution of agricultural produce amongst people of the economy. Most of these marketing boards have in the past been run by the state/government and have shown great inefficiencies which can be resolved by privatising these parastatals.
The government has in the past tried to privatise some of these parastatals through the Economic Structural Adjustment Programme whose central objective was to remove the distortions in the economy resulting from government’s intervention and central control over markets. The government was concerned about the unbearable debts which thase parastatals were accumulating. They had become an huge drain on the government’s treasury and were accruing deficits which were financed at the expense of the taxpayers.
These parastatals like the Dairy Marketing Board (DMB), the Grain Marketing Board (GMB) and others had suffered poor financial performance due to mismanagement and operational inefficiencies, hence the need to privatise them in order to reduce the government’s burden to cover the financial mismatches they created. The government wanted to reduce public expenditure which largely consisted of financing agricultural marketing parastatals. The need to privatise was because in the past government’s participation in numerous areas of economic activity has proved to be productively and operationally inefficient. This is because government structures are not flexible
References: Crawford, I.M. (2006), Agricultural and food marketing Management, FAO Corporate Document Repository, FAO, Rome, Italy Liberalisation of Agricultural Markets by John Makamure, James Jowa and Hilda Muzuwa, March 2001 Public Enterprise Reform and Privatization in Zimbabwe: Economic, Legal and Institutional Aspects by Tekaligne Godana and Ben Hlatshwayo Privatisation of Agricultural Parastatals-Small-holder farmers Experience by Emmerson Zhou Trade Liberalisation under Structural Economic Adjustment-Impact on Social Welfare in Zimbabwe by Moses Tekere www.google.com