Agricultural policies 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.

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.

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.

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?

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)

The table below presents measures of distortion and comparative economic advantage in the production of maize and round potatoes in Mozambique using local and improved production technologies. Two provinces were chosen to reflect different biophysical conditions. Maputo Province, a coastal area with low rainfall and generally poor soils and Tete which has medium altitude, above average rainfall and fertile soils.

1. Assuming absence of market failure, briefly discuss the EPC results
2. What crop systems would you recommend for each province? Justify your answer.

EPC and CBR for selected commodity systems in Mozambique

CBR: Cost Benefit Ratio, EPC: Effective Protection Coefficient

The supply and demand equations presented below are for maize grain. If the government decides to subsidize producer price by 2 monetary units (MU), What will be the net effect on consumer surplus, producer surplus, tax payers and total welfare (dead weight loss)?. NB: make sure you present a well labelled graph to support your answers.

(Supply equation)

(Demand equation)

The following is a simplex tableau for a linear programming problem

			60	50	45	50	0	0	0	0
	Basic variable	Quantity	x1	x2	x3	x4	s1	s2	s3	s4
0	s1	20	0	1	0	0	1	0	0	0
50	x4	15	0	0	0	0	0	1	0	0
60	x1	12	1	1/2	0	1	0	0	1/10	0
0	s4	45	0	0	8	6	0	-6	0	1
		1,470	60	30	0	50	0	50	6	0
	-		0	20	45	0	0	-	-6	0
								-50

1. Is this a maximization or a minimization problem? Give reason(s) for your answer.
2. What are the values of the decision variables in this simplex tableau
3. What are the values of the slack variables in this tableau?
4. What does the – value of “20” in the “x2” column mean?
5. Is this solution optimal? Why? If the solution is not optimal, determine the optimal solution.

1. With the aid of illustrated diagram, explain the concept of Costs trade-offs associated with improved services.
2. A vending machine at JUlius Nyerere International Airport dispenses hot coffee, hot chocolate, or hot tea, in a constant service time of 20 seconds. Customers arrive at the vending machine at a mean rate of 60 per hour (Poison distributed).

1. Mention the assumption that the management Scientists must make before analyzing this queuing problem
2. Determine the average length of the waiting line and the average time a customer must wait.

Which of the following ratios includes a component that is not part of the current sections of a balnce sheet

1. Working capital ratio
2. Quick ratio
3. Invemtory turnover
4. None of the above is a good answer because all of the listed ratios incorporate only items from the current section