poor, in some use of ganyu. The issue is to deal with the abuses under ganyu, not to
 condemn ganyu itself. For the very poor, ganyu may be their only safety net (see Annex
 F). Piece work ganyu paid in kind is difficult to compare with other income generating
 activities. Increasing transparency in this type of activity would allow the rural population
 to make better choices in the use of their labor (Weber).

 Over time, questions of the labor market will not be solved until there is increasing
 demand for labor. Caution is needed on establishing legislation to "protect" labor before
 an active labor market exists. Such legislation, while socially desirable, is likely to retard
 growth in the labor market and to distort labor/capital ratio in investments. As demand
 increases for labor, labor's ability to seek more rights and protection from abuse in the
 market should grow.

 Inputs Markets

 Since 1994 private traders have been allowed, with numerous restrictions, to import and
 distribute inputs to smallholders. The estate sector, on the other hand, could always get
 inputs from whoever provided the best prices and service. It was not until January 1996
 that a series of licensing and compulsory approvals required for private trading of inputs
 to smallholders was removed. Even though liberalization of regulations on the input
 market has occurred, vigilance is still needed to assure that backsliding does not happen.
 The changes in the input market have occurred too recently to be sure that they are
 permanent and that reintroduction of unnecessary regulation does not occur.

 A number of questionable policy decisions have cooled expansion of the input market.
 Foremost among these has been the free input program for drought relief that has been
 established in the last two years. Another potential damper on full expansion of the
 fertilizer market is the continual existence of a large buffer stock of fertilizer (FBS
 managed by SFFRFM). With full liberalization of the fertilizer market for smallholder,
 the continual justification of the existence of the FBS should be examined. Traders are
 rightfully wary of taking the risk necessary to enter a market if there is a threat that a large
 supply of a commodity related to that market could be dumped on the market. The input
 market also suffers the same problems of credit, transportation and storage that face other
 commodity markets in the country.

Exchange Mechanisms

 Exchange mechanisms refer to the means by which goods and services are exchanged
within the economy. In a simple subsistence economy, exchange often is done locally at a
personal level or through kinship or ethnic linkages. In a modern economy, exchange usually
takes place through impersonal exchanges regulated by law, sometime over great distance and
time.