Agricultural policies UE Past Papers Questions.

1. Give three examples of the application of policy analysis matrix (PAM).
2. Arabica coffee is one of the main export crops and it is mainly grown in the Southern and Northen highlands. Recurrent droughts and diseases have severely affected smallholder production in the northen highlands. According to some smallholder producers, the crop is no longer profitable leading to some either abandoning the crop in favor of vegetables and dairy production or dedicating less resources to the crop. Using the PAM presented below:

1. Assess the competitiveness and efficiency of Arabica coffee production in the two zones
2. Calculate effective protection coefficients and interpret your results
3. Comment on the comparative economic advantage of the two zones in Arabica coffee production based on Cost Benefit Ratio(CBR)

PAM for Arabica Coffee

Source: DAEA & Ministry of Agriculture and Cooperatives, Directorate of Planning(1999). Analysis of the comparative economic advantage of alternative agricultural production options in Tanzania. USAID, Technical Paper no 102.

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The table below provides calculated Nominal Rates of Protection for cashew nut in Tanzania for the period 2005 to 2012.

Observed and adjusted Nominal Rate of protection at farm gate for cashew nuts in Tanzania.

Source:FAO, 2015, Analysis of price incentives and disincentives for cashew nuts in the United Republic of Tanzania. 2005-2013 By N. Nkonya and Cameron A. Technical Notes Series, MAFAP, Rome.

1. Interpret the data above and draw conclusions and recommendations on the effect of policy distortions in the cashew nut sector.
2. Explain how observed and adjusted NRP are derived.

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Write short notes on the following

1. The concept of a reference price in policy analysis
2. Observed price gap in a value chain
3. Relative indicator of the total market development gap affecting farmers
4. The importance of using adjustment factors at various points of completion in the value chain.

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1. List the recommended steps to follow during policy analysis
2. Briefly describe the attributes of a worthwhile policy analysis
3. What is the difference beteen normative policy analysis and positive analysis?

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1. Give two examples of policy issues for which knowledge of consumer behavior is important
2. The table below provides expenditure elasticities with respect to income of selected food items for poor households in Mozambique.

Expenditure elasticities for selected food items in Mozambique

If the government of Mozambique wished to improve food access for the poor households through an income transfer, for which commodities the rural and urban poor would increase their expenditure most?Justify your answer.

100. Between a direct income transfer and a subsidy on consumer price for rice , what option would lead to the highest consumer satisfaction? Justify your answer using graphical analysis and two commodities (x1-rice and X2-other commodities)

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