Chapter 3


There is, at present, very much a consensus that the appropriate role for government is to
facilitate the operation of the market economy and encourage the development of the private
sector. Thus, instead of the interventionist policies which many states operated in the past,
whether their economies were centrally planned or mixed economies, the role of the state is
now seen to be much more limited. The state should institute a legal framework which
facilitates the exchange of property rights and set up a regulatory framework such as
recognized weights and measures which increases the transparency of exchange.

In addition, where there are clear market failures, such as in the provision of public goods. it
may be appropriate for the state to provide these directly, or to finance their provision by
appropriate private sector organizations. This is particularly important for the provision of
market facilitating infrastructure, such as roads. In agriculture, there is a case for the state to
Ifanre. research into improved seed and technology, particularly for food crnps where a
private firm might have difficulty recovering its costs. The state may also have a role in
providing social goods, such as education and health services, though this must not be done
in a way which endangers the fiscal probity of the economy.

This more restricted view of the state arises, to some extent, from an acknowledgement that,
far from being a benign but fundamentally neutral institution whose main purpose is to
further the wellbeing of its citizens, the state is an organisation like any other, with its own
objectives and internal incentive structures. The political economy analysis of the last two
decades emphasises the tendency for agents of the state to pervert the operation of markets,
by investing their time in rent-seeking activities to improve their own welfare at the expense
of the efficiency of the economic system as a whole. It is thus seen as important to curb the
ability of state employees and decision-makers to undermine productive economic activity,
and restore the discipline of the market place.

Thus the prime role of the state is seen as setting up a legal framework which stipulates the
rights and obligations of both individuals and the wide range of organizations which operate
within an economy, including government ministries and the various public sector bodies
which carry out policies and projects on behalf of government.

3.3 Food sector organizations

It is impossible to make a comprehensive list of the wide range of organizations which play a
significant role in the food economy. However, the following give some idea of the variety
and characteristics of some of the major players.

3.3.1 The private commercial sector

The significant role of the private commercial sector in the food chain and in achieving food
security has become evident throughout the discussion of the food chain. Under adjustment,
with market liberalisation and privatization constituting key elements of most economic
reform programmes, its role will be further strengthened. This is true for all stages of the
food chain, from production up to the retailing level, specifically to all types of marketing
functions involved in the food system, such as:


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