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Arabian Journal of Business and
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ISSN: 2223-5833

Research Article Open Access

Impact Analysis of Government Policies on the Economic Performance of Some

Horticultural Crops in the Sudan (2009-2013)
Mohamed OA Bushara*, Elsayed EEM Elnagarabi and Israa OA Ibrahim
Department of Agricultural Economics, University of Gezira, Wad Medani, Sudan

Abstract
The earnings from horticultural exports in Sudan were very weak. They constituted only 0.4% of the total
Sudanese exports earnings. The main objective of this study was to analyze the impact of Government policies on the
performance of selected horticultural crops during the period 2009-2013 in terms of efficiency, competitiveness and
comparative advantages. The study depended on secondary data and information collected from the annual reports
of the Federal Ministry of Agriculture. The policy analysis matrix (PAM) adopted as an analytical tool to achieve the
study objectives. Parameters have been estimated for onion, melon, banana and mango. Private profitability, social
profitability, nominal protection coefficient of outputs, nominal protection coefficient of inputs, effective protection
coefficient, domestic resources coefficient, profitability coefficient, and subsidy ratio to producer were calculated for
the crops under consideration. The study results showed that the nominal protection coefficient of inputs (NPIs) was
less than one which indicated that the adopted policy encouraged the production. The nominal protection coefficient
of outputs (NPCs) was greater than one for onion, banana and mongo with the exception of melon, who's NPC
about 0.62. This indicated that the government policies provided incentives and favored the production of vegetables
and fruits. The effective protection coefficient (EPCs) was greater than one. The domestic resources coefficient
(DRC) was less than one which indicated that there are still comparative advantage of the production of vegetables
and fruits in Sudan. The study recommended further vertical and horizontal expansion of vegetables and fruits
production, and furthermore distorting policies may be revised and input taxes have to be reduced.

Keywords: Horticultural crops; Policy analysis matrix; Economic horticultural products, in addition to a wide range of livestock, forestry
performance; Sudan and fishery products.

Background The irrigated and mechanized rain fed sub-sectors provides about
80% of the principal food cereal and oilseed crops, and about 50% of
The agricultural sector of Sudan represents the most important export earnings. The importance of the traditional rain fed agriculture,
sector of the economy. The available information show that it the livestock sub-sector, the pastures and forestry subsector rests not
contributed about 35-45% of the country's GDP during the period only in their contribution to crop output only but also in providing the
1970-2011. Also, it accommodates about 57% of the workforce and livelihood for about 90% of the agricultural population, who represent
it provides most of the inputs for the manufacturing industries such 65% of the total population.
as oil, sugar, and textile, while it is considered the main pillar for
sustainable development and food security. The major crops produced within the traditional and mechanized
rain fed agricultural sub-sector are sorghum, sesame and millet, in
After the separation of South Sudan, the area of Sudan is estimated to addition to rain-fed cotton. However, the irrigated sub-sector's major
about 4,446 million feddans. In terms of kilo meters, Sudan is classified crops are cotton wheat and sorghum, in addition to groundnuts, pulses
as one of the largest countries in Africa with a total area at 1.882.000 crop and the whole range of horticultural crops.
km2. The main activity of its population is agriculture. The total area of
the agricultural land in Sudan amounts to approximately 200 million The cultivation of the horticultural crops is practiced along the
banks of the River Nile and the banks of the White and Blue Niles and
feddans. The area under cultivation is about 40 million feddans or some
their tributaries, as well as under surface irrigation within the major
20% of the total arable area for agricultural production. Agriculture
irrigation schemes or in fields irrigated by pumps from wells. However,
as an economic activity is practiced almost everywhere in Sudan,
the acreage and output and yields, as well as the exported volume and
where we can distinguish three agricultural systems. These include
export receipts of the produced horticultural crops is relatively small as
traditional and mechanized rain fed agriculture in addition to irrigated compared to that of the other groups of crops e.g., cereals, fiber crops
agriculture. However, while irrigated agriculture is concentrated at the
banks of the Nile River and its tributaries and the area between the Blue
and white Niles (the part of the area defined as the plains flood which
*Corresponding author: Professor Mohamed Osman Ahmed Bushara,
is characterized by high productivity and fertility). This is known to Department of Agricultural Economics, University of Gezira, Wad Medani, Sudan,
be a land which is suitable for the cultivation of all kinds of cotton, Tel: +249912530898; E-mail: mosman@uofg.edu.sd
groundnuts, wheat, sugar cane, vegetables, legumes, spices and all kinds Received January 06, 2018; Accepted September 17, 2018; Published
of fruits. The traditional and mechanized rain fed agriculture is found September 24, 2018
in Gedarif area, Blue Nile and White Nile areas, in addition to greater Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of
Kordofan and Darfur regions. In addition, the Sudanese agricultural Government Policies on the Economic Performance of Some Horticultural Crops in
sector includes the livestock sub-sector, the fishery sub-sector and the the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

forestry and wildlife sub-sector [1]. Moreover, Sudan enjoys diversified Copyright: © 2018 Bushara MOA, et al. This is an open-access article distributed
under the terms of the Creative Commons Attribution License, which permits
climates and geographic locations that encourage the production
unrestricted use, distribution, and reproduction in any medium, provided the
of various agricultural crops including grain and pulses, fiber and original author and source are credited.

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 2 of 12

and oil seed crops. This is, however, so despite the fact that the Sudan which were implemented to expand the production and exports of the
possesses ample opportunities for a huge production of horticultural horticultural products. The specific objectives of the study encompass
crops and, hence, an increased contribution of their export earning to the following:
the national economy. Thus, the Sudanese horticultural sub-sector has
never been in the position to utilize the available opportunities for an 1. Assessing the productive capacities for an expanded
increased crop output and expanding export earnings [2]. horticultural production.

The reasons underlying the above mentioned fact are multifaceted. 2. Examination of the capacity of the potential demand markets
They include reasons pertaining to the adopted technologies as well as for horticultural products from Sudan.
reasons of economic nature such as marketing and export, financing 3. Assessment of the impact of the adopted government policies
and adopted policies. on output, producers and resources use.
Based on the above mentioned facts, the performance of the Research questions
Sudanese horticultural export has persistently been weak since the
evolution of horticultural export. It amounted during (1993-2014) an The research questions set to this study rotate around the policy
average of about $ 4.5 million and 0.4% of total Sudanese exports. The incentives and crop competitiveness provided by the government
total area under the horticultural products amounted to about 0.8 million agricultural policy, which was adopted during the period analyzed in
feddans in 1997 [3]. This area represents only about 2% of the total area this study. On this basis, the research questions to be answered by this
under the agricultural cultivation, which is equal to about 38.2 million study include the following:
feddans during the same year and about 0.4% of the total arable area. 1. Do the adopted government's policies encourage the export of
Regarding the total output of the same period, the Sudanese horticultural the export crops focused in this research?
sub-sector produces about 5 million tons or 44% of the total agricultural
production, which was estimated at 11.3 million tons [4]. 2. What is the magnitude of the coefficients of price and output
incentives provided by the adopted government policies
Statement of the problem towards the export crops focused in this research?
As already mentioned, the Sudan possesses huge opportunities 3. Do the adopted government policies encourage the
for the production and export of horticultural crops. These include competiveness of the export crops focused in this research?
abundant land resources, fertile soils, and adequate irrigation water,
in addition to the diversified climatic regions that provide for an 4. What is the magnitude of the coefficients of competitiveness
expanded and efficient production of horticultural products. In provided by the adopted government policy towards the export
addition, the Sudan, especially, most of the horticultural production crops focused in this research?
centers that have comparative advantage for various horticultural Organization of the research
crops lie in close vicinity to certain promising demand markets for
horticultural products. Moreover, the Sudanese authorities concerned The study consists of five chapters. Chapter one is an introductory
with the issues of horticultural production and export at the various chapter and it includes a background, statement of the problem,
levels of the government followed during the past decades a policy objectives of the study and the research methodology, in addition to
track that encourages the production and export of horticultural the research questions and organization of the thesis.
products. Similarly, the government overall wide economy, as well
Chapter two provides a comprehensive review of the Sudanese
as sector specific economic policies, has been in favor of production
horticultural sub-sector. Chapter three describes the research
and export of horticultural crops. These policies went further to
the extent that they encouraged the establishment of training and methodology and provides the theoretical background of the
research institutions, in addition to other related institutions like those undertaken research.
involved in sorting, packing, processing and marketing to facilitate Chapter four presented the conceptual framework underlying
the production and export of horticultural crops. However, despite the undertaken analysis, in addition to a description of the employed
all these opportunities, the production and export of horticultural analytical technique.
products remained extremely weak. The reasons for this weakness are
multifaceted. They include production difficulties as well as marketing Chapter five presented the obtained results of the conducted
and export problems, in addition to policy related problems. analysis, their interpretation and an attempt to an explanation of the
results, in addition to the conclusion of the results, their implications
The reasons for this weakness are multifaceted. They include and the recommendations drawn from the results and from their
production difficulties as well as marketing and export problems in implications. Finally, chapter six provides a summary of the study.
addition to policy related problems. However, this study focuses on
the policy problem of the horticultural export products. Prompted by The Horticulture Subsector in Sudan
the above mentioned fact, many researchers engaged in studying the
reasons for the weak performance of the horticultural sub-sector. This Background
study, however, attempts to examine the government adopted policies The Sudanese horticultural sub sector comprises two branches,
within the sphere of horticultural exports. namely, the vegetable and fruit sub systems. Most of the production
units within the horticultural sub sector, especially those for fruit
Objectives of the study
production, lie along the banks of the river Nile and its tributaries.
The main objectives of this research include the assessment of the However, the irrigated schemes occupy increasing areas for vegetable
opportunities for an expanded horticultural production and exports, production. The majority of the crops within these sub systems are
in addition to the examination of the adopted economic policies, produced under irrigation by private producers, in addition to some

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 3 of 12

horticultural output produced under rain fed conditions in south addition to date. These fruit are cultivated almost everywhere in Sudan
Kordufan, Darfur and Blue Nile states. The size of the holdings within as it is presented in Table 2. However, the most important regions for
the horticultural sub sector that lie along the banks of the Nile system fruit production in Sudan are Khartoum State, Gezira State, Northern
ranges between 1-50 feddans, while the size of the horticultural holdings and River Nile states, in addition to Kassala, Blue Nile and Sennar
within the irrigated schemes ranges between 5-20 feddans. Moreover, States. The fruits which are subjected to study in this research are
few large-scale vegetables production units of over 2000 feddans were mango and banana. The selection of these fruits is based under their
established by the national and multinational companies, such as importance and their promising future as export crops. Also, based on
the Arab authority for agricultural development and investment [5]. this importance the following sections of this study will focus on these
The importance of the horticultural sub-sector rests on a number of two important fruit crops (mango and banana), in addition to the two
elements including the volume and value of the cultivated products, important vegetable crops (onion and melon).
in addition to their economic impact on the economy and the welfare
of the producers' and the labours and other stake holders involved The development of areas, outputs and yields of the cultivated
in the sub-sectors activities, as well as, their nutritional effects on the horticultural crops
population. The cultivated crops within the horticultural subsector The development of areas: Table 3 presents the development of
include a wide range of vegetables and fruits. These crops are cultivated the areas of the two selected vegetables crops (Onion and melon) and
in different climatic zones with varying soil characteristics and varying the two selected fruits crops (mango and banana) during the period
levels of water availability. Similarly, the employed cultivation practices 2005-2014. As it can be seen,
and production technologies are varying from climatic one zone to the
other, while the intensity of cultivation of the various crops in each it appears that the area of onion has increased markedly from about
zone is dependent on the comparative advantage available for each 86 thousand feddans in 2005 to reach about 197 thousand feddans in
crop. 2014. Accordingly, the area of onion has more than doubled during the
period under consideration. The area of melon, the second vegetable
The major cultivated horticultural crops crop under consideration, has increased very slightly to reach 10.4
As it is already known the horticultural crops are divided into thousand feddans in 2014 as compared to about 8 feddans in 2007.
the vegetables and fruits crops, in addition to other groups of crops As regards the areas of the two selected fruit crops under
including the floricultural crops, the medicinal crops and the spices consideration, the area of mango increased similar to the area of melon
crops. However, in this study, the major focus of the research is on the very slightly from about 67 thousand feddans in 2005 to reach about
vegetables and fruit crops. 72 thousand feddans in 2014 (Figure 1). However, the area of banana
The major vegetable crops, which are cultivated in many places increased also markedly similar to onion area to reach 81 thousand
in Sudan, include Tomato, Sweet melon, Green beans and Sweet feddans compared to about 42 thousand feddans in 2005. Also, it could
melon, in addition to Eggplant, Onion, Okra and potato, as well as be said here that the area of banana has doubled during the period
cucumber. These vegetable are cultivated almost everywhere in Sudan under study.
as it is presented in Table 1. However, the most important regions The development of outputs: Table 4 presents the development
for vegetable production in Sudan are Khartoum State, Gezira State, of output of onion, melon, mango and banana during the period 2005
Northern and River Nile states, in addition to Kassala, Blue Nile and
White Nile states. Nevertheless, there are other regions where vegetable Crops Producing states Season
cultivation is also practiced to a lesser extent than the aforementioned Mango Khartoum, Kassala, River Nile, Sennar, Darfur, Dec-Sept
states like the states of Kordofan region and the states of Darfur region. Gezira, Kordofan, Blue Nile.
The vegetables that are focused in this study are onion and melon. As Banana Kassala, River Nile, Sennar, Khartoum, Blue Nile. All the year
already mentioned, these crops are selected because of their promising Grapefruits Khartoum, Kassala, River Nile, Northern, Gezira. Nov -March
July-Sept
future as export crops. Although both of onion and melon are produced
Orange River Nile, Kassala, Khartoum, Blue Nile, Sennar, All the year
almost everywhere in Sudan, they are produced in an intensive manner Darfur.
in the River Nile State, Khartoum State, Kassala state and Gezira State. Lime All over the country. All the year
Based on the importance of onion and melon as promising export crops
Table 2: The major cultivated fruits and their production centers, 2015, Sudan [1].
vegetable crops, the following sections of this study will focus on them.
The major fruit crops, which are cultivated in many places in Year Crops area (000) fed.
Sudan, include Mango, Banana, Grape fruits, Orange and Lime, in   Onion Melon (Gallia) Mango Banana
2005 86 n.a 67.3 42.8
Crop Production regions (states) Season 2006 86 n.a 67.8 43
Tomato Khartoum, Northern, River Nile White Nile, Blue Nile, 2007 n.a 8 68.6 45
Gezira, Kassala 2008 n.a 8.2 69.8 47.4
Sweet melon Khartoum, Northern, River Nile, White Nile. Dec-Mar 2009 128 9 71.3 52
Green beans Khartoum, Northern, River Nile Dec-Mar 2010 139.5 9.2 69.4 57
Sweet pepper Khartoum, Northern, River Nile Oct-April 2011 152 9.5 70 62.5
Eggplant Khartoum, Northern, River Nile, Gezira May-June 2012 165.6 9.8 70.6 68.5
Okra Khartoum, Northern, River Nile, White Nile, Sennar. Sept-June 2013 180.4 10.1 71.2 75
Onion Khartoum, Northern, River Nile, Sennar, Kassala. Nov-June 2014 196.5 10.4 71.5 81
Potato Khartoum, Northern, River Nile, Sennar, Darfur. Potato Average 141.7 9.27 69.7 57.4
Table 1: The major cultivated vegetable crops and their production centers, 2015, Table 3: The development of areas of onion, melon, mango and banana, 2005-
Sudan [3,5]. 2014, Sudan [1].

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 4 of 12

250 2000

200 1500
Onion

1000 tons
150 Onion Melon
1000
1000 fed

Melon Mango
Mango Banana
100 500
Banana
50 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0
Figure 2: The development of outputs of onion, melon, mango and banana,
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2005- 2014, Sudan.
Figure 1: The development of areas of onion, melon, mango and banana,
2005-2014, Sudan.
14

Year Crop output (000) ton. 12

  Onion Gallia Mango Banana 10

Onion
2005 59 n.a 605 512 8
Melon
2006 59 n.a 611 516 6 Mango
2007 n.a 23 632 254 4 Banana
2008 n.a 24 651 562 2
2009 1024 25 616 624
0
2010 1116 27.6 625 684 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2011 1136 24 630 750
Figure 3: The development of yields of onion, melon, mango and banana,
2012 1325 4.29 635.4 822 2005-2014, Sudan.
2013 1443.2 30.3 641 900
2014 1575 31.2 650 980
Year Crops yield (000) ton
Average 967.1 23.6 630 660.4
  Onion Gallia Mango Banana
Table 4: The development of outputs of onion, melon, mango and banana, 2005- 2005 0.69 n.a 9 12
2014, Sudan [1].
2006 0.69 n.a 9.01 12
-2014. The output of onion and banana shows a marked increase, while 2007 n.a 2.8 9.2 5.6
the output of melon and banana has increased only slightly. 2008 n.a 2.9 9.3 12
2009 8 2.7 8.6 12
As it can be seen from Figures 2 and 3, the highest increase in output
2010 8 3 9 12
of the studied crops was recorded by onion, thus, its output increased
2011 7.47 2.5 9 12
steadily from less than 100 thousand tons in 2005 to reach more than
2012 8 0.43 9 12
1.5 million tons in 2014. Also, the increase in output of banana appears
2013 8 3 9 12
to be marked. It increased from some more than 500 thousand tons in 2014 8.01 3 9.09 12.09
2005 to reach about one million tons in 2014. Average 5 2.03 9.02 11.4
The increase in output of onion and banana could be explained the Table 5: The development of yield of onion, melon, mango and banana, 2005-
expansion of cultivated areas of the two crops, in addition to the use of 2014, Sudan.
improved technology in production of the two crops, especially, the use
of improved seed varieties of onion and improved seedlings of banana. of the different horticultural products, coupled with the improvement
in increasing awareness about the importance of fruits and vegetables
As regards melon (Gallia) and mango, the only slight increase in human nutrition, signifies that the per capita consumption of
in their output could be explained by negligible expansion in their horticultural crops has increased. Nevertheless, it is expected that the
cultivated areas. increase in consumption of horticultural crops is more pronounced in
The development of yields: Contrary to the development areas the urban centers in comparison to the rural areas.
and outputs of the crops under study, the development of their yields The marketing of horticultural crops in Sudan
during the analyzed period appears to be negligible (Table 5). Thus,
the yield of onion increased very slightly, while that of melon, mango The marketing of the different varieties of the horticultural crops
and banana remained almost constant, despite the increased use of produced in the different areas of Sudan takes place according to
improved seed and seedling varieties of these crops during the period the marketing channel depicted in Figure 4. As it can be seen, these
under analysis. However, this result might be attributed to the poor products are marketed in a rather simple way. Thus, most of the
practiced cultural practices. horticultural crops, which are destined for local consumption or for
export, are directly transported from the farms by the producers to the
The consumption of horticultural crops in Sudan nearest central market within the area of production. The produces
Unfortunately, there is no reliable and published data about are then sold to the wholesalers, who distribute it to the retailers in
the consumption of horticultural crops in Sudan. However, the the different locations in the towns. However, the vegetables and
aforementioned expansion in the cultivated areas, out puts, and yields fruits destined for export are washed and packed in private centers for

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 5 of 12

The exporting institutions

The Producer The horticultural export middlemen classification is based on many
factors, including the institutions ownership nature (private or public),
the business experience age, the organization extent and capacity, their
capital size, the personnel qualification (traditional or modern), the
providence of modern technological equipment's (on their ownership
The Wholesaler The Local Trader or on rent basis), the degree of specialization in exporting one or more
crops. However, the performed role by these middlemen can be only
assessed in categorizations, descriptions and estimations, because of
the often limited and sometimes absent of available necessary data for
a systematic analysis about these institutions and their performance.

The Exporter The Retailer Private export institutions: This category of horticultural export
institutions comprises wide range of traditional private exporters, who
can be classified as traders, in addition to modern small scale companies
which are be belonged to single or many holders.
Traditional private exporters (traders): Those traders are working
The Consumer on traditional basis. Most of them are working individually within their
limit available private capital. However, some of them are specialized in
Figure 4: Schematic presentation of the marketing channel of horticultural
products.
one horticultural export, while, others engaged in exporting a group of
horticultural and other agricultural crops.

preparation of horticultural export and transported through Khartoum The important features that are differentiating between these
airport or Port Sudan harbor to the different demand markets in Saudi middlemen and the modern private small-scale companies include,
Arabia or the Gulf countries. that they are organized on traditional basis, the absence of trained
personnel and the major lack of export infrastructure, like; equipped
The export of horticultural crops post-harvest operations. Hence, the majority of them carry out their
business activities on rent basis.
The importance of the Sudanese horticultural exports contribution
in the national economy may be due to many factors. An essential one of Modern private small-scale companies: The modern private small-
them may be its role to diversify and expand the Sudanese agricultural scale companies are another type of the private horticultural exporters.
exports, hence to contribute in overcoming the risks of depending on They are similar to private traders' institutions in that some of them are
a few numbers of agricultural exports. In addition, the horticultural specialized in one horticultural product, while; others are engaged in
exports might be an important source of foreign exchange, expansion exporting a group of horticultural and agricultural crops. In addition,
of farmers' income and a mean of provision of various jobs. However, they are similar to them in that they lacked the required export
despite the anticipated prospects for the successful horticultural infrastructure like sorting, grading, packaging, packing, transportation
export industry in Sudan, the realized output of horticultural exports and storage facilities. However, the private traders and the small-scale
is relatively small, as compared with the Sudanese horticultural modern companies are differed from each other in many aspects.
Production and prospects, as well as with the available Arab and EU Hence, the modern companies are organized on modern basis and they
import. Thus, the yearly total Sudanese horticultural exports averaged are to some extent equipped with trained personnel who can access
the international markets. Similarly, the small-scale modern export
during 1989-2009 at about 7.2 thousand tons or 0.2% of the total
institutions depend, as the private traders, on other export institutions
horticultural production, while the average value of the horticultural
to carry out their business activities on rent basis. Moreover, their
crops of Sudan during the period 1993-2009 was estimated at about
dependency on other companies is only limited on such a provision
$2.3 million, which represents about 0.4% of the total value of Sudanese
of export post-harvest services. While, the companies are in a position
exports during the same period (Table 6).
of arranging the products transport to target the international markets
The exported crops and conducting other export activities like delivering the product,
negotiating its prices, and receipt the value.
The available literature signifies a great potential for the Sudanese
horticultural exports. This potential rests not only on the promising Public companies: The public companies include two types of
demand for these crops in the different importing markets in the Arab export institutions; the first one is the public affiliate companies that
world and the European Union but also on the tremendous potential organized to work on private basis such as the Sudanese horticultural
production of these crops in the Sudan. export company (SHEC). While, the second type which is engaging in
horticultural exports, can be represented by the joint venture, like the
However, despite the difficulties facing the development of the
Sudanese Arab company for the agricultural investment (SACAI).
Sudanese horticultural exports and its sluggish performance, the
export mixture of the Sudanese horticultural exports encompasses a Public affiliate company This type of public export institutions
wide range of fruits and vegetables products. Thus, the active Sudanese is represented by the Sudanese horticultural export company (SHEC),
export institutions used to export a variety of fruits including mango, which is organized to work on private basis. The SHEC is established
grape fruits and lemon, in addition to banana and dates. As regards the in early 1990's with the major objective to promote the export of
exported vegetables, their export mixture includes green beans, melon horticultural products. The company is endowed with the required
and Gallia, in addition to okra. personnel and equipment to carry out the export activities for traders or

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 6 of 12

  Export value ($ million) Share in total value %

Years Agric. Hort. Petroleum Others Total Agric. Hort. Petroleum
1993 349 1.1 0 78 417 84 0.3 0
1994 386 2.6 0 138 524 74 0.5 0
1995 446 4.4 0 110 556 80 0.8 0
1996 478 3.5 0 142 620 77 0.6 0
1997 425 2.6 0 169 594 71 0.7 0
1998 467 3.6 0 129 596 74 0.6 0
1999 404 2.1 276 100 780 52 0.3 35
2000 365 10.1 1249 193 1807 20 0.7 75
2001 236 2.3 1277 183 1699 14 0.1 81
2002 339 2.5 1511 99 1949 18 0.1 78
2003 381 2.1 2048 113 2542 15 0.8 80
2004 338 n.a 2100 339 2777 14 0.3 82
2005 379 n.a 4187 260 4824 9 n.a 87
2006 359 1.1 5087 211 5657 8 0.02 90
2007 350 0.6 8419 110 8879 4 0.9 95
2008 373 0.3 11094 203 11670 3 0.2 95
2009 315 1.5 7131 388 7834 5 0.02 91
2010 117.89 2.14 94,06,036 252,60 10716.88 1.1 0.01 87.7
2011 3571.59 2.33 70,03,502 97,472 95986.01 3.7 0.002 7.2
2012 645.53 39.1 6,98,842 116,98 3367.66 19 1.2 21
2013 3614.38 4.83 39,10,565 375,23 7086.22 51 0.07 55
2014 986.81 2.23 1,090.79 255.53 4350.2 23 0.05 25
Average 697 4.5 957473 4577 7569 33 0.4 53
Table 6: Value and share of the Sudanese horticultural exports, 1993-2014 [6,7].

exporters, who lacked the facilities to access the international markets Sudan, the focus of the study with respect to the marketing and export
and undertaking the required export services. The company engaged business activities is centered in Khartoum.
in many activities, like production, marketing and export to promote
The study subject: As already mentioned, the Sudan possesses a
the Sudanese horticultural exports. Thus, it provides the horticultural
huge potential to expand its horticultural exports. This is fact is based
producers with various inputs like seeds, fertilizers, plant protection
on the comparative advantages with which the Sudan is endowed, in
services and cash. Also, it conducts all the other fiscal and economic
addition to the promising demand markets for horticultural crops near
export activities on contract basis where the producers deliver the
Sudan (the Arab oil rich countries) and the globally expanding trend of
product, then it undertakes the marketing and export activity and
horticultural trade. Moreover, the available statistics suggest that Sudan
finally subtracts its costs and commission and delivering the rest of the
started to export a number of horticultural crops to the neighboring oil
net value to the producers.
rich Arab countries since a number of decades. The number of these
Joint venture companies: The joint venture is another type of horticultural exports range between eight to ten products. However,
public export institutions in Sudan, which is engaging in horticultural as regards the study subject, the research focuses on four export crops;
export. It is represented by the Sudanese Arab company for two vegetables (Onion and Melon) and two fruits (Mango and Banana).
agricultural investment (SACAI). The company is established between These crops are selected because of their importance as major export
the government of Sudan and the Arab authorities for agricultural crops, in addition to the expected potential to expand their production
investment. It is well equipped with modern export infrastructure and export volume and value.
and trained personnel to work on almost all types of agricultural
The data of the study: This study employed inclusively secondary
and horticultural crops. It is divided into specialized branches in the
data. This data included data on the development of the acreage,
various types of production, marketing and export fields. In addition to
producing and exporting wide size of horticultural crops, the company production and yields of the studied crops. In addition, the employed
is also engaging in providing export services for private exporters and data included farm records, as well as marketing data and data with
companies on rent basis regard to the export activities of the crops under study. The farm
records included detailed cost of production of the crops under study,
Research Methodology and Theoretical Background in addition to the farm gate prices of these crops. The crop marketing
data included data on the detailed cost of marketing of the studied
Research methodology
crops, while the data on the export activities of the crops under study
The study area and the study subject: This study focuses on included data on their international prices, transportation, handling
the impact of the adopted government policy towards the Sudanese and the charged export taxes and fees and other levies.
horticultural subsector. Accordingly, the study area of this research
covers most of the central and northern parts of Sudan (the Northern The sources of the above mentioned data are the records and
State, the River Nile State, Khartoum, Gezira and White and Blue Nile publications of the federal and regional ministries of agriculture, the
States), in addition to Kassala State, where the crops under study are Custom Authority, in addition to the yearly books of the Bank of
produced. However, while the export activities are concentrated in Sudan, Ministry of Finance and Economic Planning and the Arab
Khartoum, which represents the largest vegetable and fruit market in Organization for Agricultural Development

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 7 of 12

The employed analytical methods: This research employed the measures, and policy makers can use this information to debate the
general statistical methods in presenting the trend of development pros and cons of alternatives.
of the historical data on the cultivated areas, production and yields
The prices and markets selected for analysis can vary greatly
of the studied crops. Also, the simple statistical methods were used
depending on the questions and the resources available. Since
to calculate and present the annual change in cropped areas, attained
agricultural price policy is an integral component of overall macro trade
output and realized yields of the studied crops. In addition, the study
policy, a wide range of prices can be examined: macro (exchange rate
used the established methodology of calculating the social prices of
and interest rate), trade (export and import), and sectoral (output and
the studied crops and estimating the various coefficients of policy
input). The analysis can be single market, multi-market, sectoral, inter-
incentives. However, all of the aforementioned analytical exercises
sectoral, or macro; partial or general equilibrium; static or dynamic.
were conducted with the use of excel computer program.
The theoretical background Conceptual Framework of the Model
Agricultural policy: Agricultural policy is a major instrument of The policy analysis matrix (PAM)
Government intervention in the operation of agricultural markets. The policy analysis matrix method has been used as one of the
Government intervention in agricultural markets takes place to modern tools to analyze the agricultural policies to derive some
direct them to supply the surplus in food, industrial raw material and indicators and standard to measure the impact of the government
labour for industry, in addition to tax revenue and exports that earn agricultural policies on the agricultural sector. It has been initiated
foreign exchange [8]. Within this context, Governments have looked [11] to analyze market distortions and policy interventions in terms
to agriculture to play a central role in the development process. In of their effect on the vertical system from its initial production in the
their efforts to stimulate growth, many developing countries overtaxed farm through primary procurement, processing and marketing stages.
and underinvested in their agricultural sectors, guided by the theories
that agricultural taxation would not significantly hurt agricultural In this study, the PAM is used to analyze the impact of adopted
production and that the surplus should be transferred to industry, the government policies on the production of horticultural crops in order
prime engine of growth. to derive comparative and protection indicators [12].

The mechanism used to extract and transfer the agricultural surplus The PAM is a consistency framework which enables measurement
was price policy. The disincentives generated by unfavorable output of the efficiency effects of government policy intervention on producers,
prices were not reversed, however, by limited input price subsidies. consumers and the economy at different stages of a vertical commodity
Moreover, the macro environment and the trade regime further chain. It can be used as a powerful tool by the policy analyst to provide
reinforced the bias against agriculture. In many countries problems in information in two different ways:
the agricultural sector spilled over into the rest of the economy and • To measure the level of price distortion, government
contributed to crises in industry, the trade balance, and the government intervention and assess the effect of different policies.
budget. It became increasingly clear that a weak agriculture could not
support a strong industry, and many governments had to reassess their • To compare the efficiency and growth potential of different
entire development strategy farming, processing, and marketing systems for a given
commodity and for different commodities.
Policy makers in attempting to design more effective agricultural
policies can profoundly affect economic development. In developing Policy analysis matrix structure: The policy analysis matrix is a
countries agriculture is typically a large share of the domestic economy, product of two accounting identities; one is defining profitability as
and it contributes on average as much as 30 to 45 percent of growth the difference between revenues and costs and the other measuring
domestic product (GDP). The percentage of the total labour force in the effects of divergences (distorting policies and market failures) as
agriculture is even higher [9]. the difference between observed parameters that would exist if the
divergences were removed [11]. By filling in the elements of the PAM
Because agriculture is a major sector in most developing countries, for an agricultural system, an analyst could measure both the extent of
governments use to realize their major objectives. These governments transfers occasioned by the set of policies acting on the system and the
will continue to intervene extensively in the operation of agricultural inherent economic efficiency of the system.
markets, both directly through sector-level instruments and indirectly
through macro and trade policies. Agricultural price policy strikes Profit are defined as the difference between total (or per unit) sales
at the heart of the development process by altering relative prices revenues and costs of production. This definition generates the first
identity of the accounting matrix. In the PAM, profitability is measured
facing individuals, households, and the sector as a whole. Because
horizontally, across the columns of the matrix, as demonstrated in
prices are both costs and income, individuals respond to them in their
Table 7, profits, shown in the right hand columns, are found by the
roles as producers, intermediaries, and consumers. Their responses
subtraction of costs, given in the two middle column, are found by the
to incentives induced by price policy inevitably shape the process of subtraction in the left-hand column. Each of the column entries is thus
economic development and the distribution of incomes and welfares a component of the profit identity revenues less costs equal profits [11].
[10]. Each PAM contains two cost columns, one for tradable inputs and the
Analysis of agricultural policies: Analysis of agricultural policies Revenues Cost Profit
can help policy makers to examine the consequences, intended and Tradable input Domestic factor
unintended, of specific policy changes on agricultural markets and Private prices A B C D
assess the broader implications of these market-specific responses Social prices E F G H
for the viability of the overall development strategy. Such analysis Divergences I J K L
emphasizes the trade-offs between different objectives and different Table 7: The policy analysis matrix (PAM) structure [11].

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 8 of 12

other for domestic factors. Intermediate inputs-including fertilizer, Social prices of non-tradable: As with tradable, the private
pesticides, purchased seeds, compound feeds, transportation, and fuel prices for non-tradable (such as land, labour and capital) are taken
are divided into their tradable-inputs and domestic factor components. from the private budget at the farm-gate level. But no border prices
access exists to serve as efficiency valuation for non-tradable. Hence,
This process of disaggregation of intermediate goods or services
the social prices of non-tradable output are estimated by correcting
separates intermediate costs into four categories-tradable inputs,
their private prices for divergences (distorting policies and market
domestic factor, transfers (taxes and subsidies that are set aside in
failures). Sometimes it is very difficult to estimate the social prices
social evaluation), and non-tradable in put (which themselves have to
for non-tradable commodities. The first step is to correct the private
be further disaggregated to do that ultimately all component costs are
prices of non-tradable outputs for identifiable divergences. As noted
classified as tradable inputs, domestic factor, or transfers) [13].
above for tradable products, the researcher tried to adjust the observed
As shown in the Table 7 Monke and Pearson arrange the data private prices (A and B) for the effects of divergences (I and J) and
in three rows, the first row for the private price, the second row for thus find the social prices (E and F) as residuals. Often, however, the
social prices and the third row for the transfers, which the difference effects of divergences, especially of market failures and sometimes also
between private and social valuation of revenues, costs and profits. This of distorting policies especially of market failures and sometimes also
difference is also referred to as the effect of government intervention or of distorting policies, are nearly impossible to measure. If the effects of
divergences. divergences cannot be estimated, the next step is search for the prices
of a close substitute commodity to use as a proxy for the social prices of
Whereas: A: Total revenue in private price (market prevailing
the non-tradable commodity. If that search fails, the last step is to seek
price); B: Cost of tradable inputs in private price; C: Cost of domestic
the price of the same commodity [14].
factors in private price; D: Private profit; E: Total revenues in social
price (price which are adjusted for government intervention); F: Cost The most common non-tradable goods and services include
of tradable inputs in social prices; G: Cost of domestic factor in social electricity, transportation, construction, labour and land. These can
prices; H: Social profits. be both inputs and outputs to a project. Labour and land are primary
factors of production and their economic evaluation must be treated
The matrix is thus made up by the following identities:
separately to that of others. One way of carrying out the economic
Private or financial profit (PP): D=A-B-C valuation of non-tradable goods is to break down the composition of
each non-tradable good into traded and non-traded components until
Social profit (SP): H=E-F-G the stage is reached where the only non-traded components are labour
Output transfers (I): I=A-E and land.

Input transfers (J): J=B-F Labour: Labour is a project input and like any other project input, it
must be valued at its opportunity cost which might well different from
Factors transfers (K): K=C-G its market value. This opportunity cost, or economic value of labour, is
Total net policy effect (NPE): L=D-H=I-J-K. equivalent to the output foregone elsewhere in the economy as a result
of employing that labour in the project. For economic project analysis,
Social prices for tradable output and input: Guidelines for the two broad categories of labour should be shadow priced.
empirical estimation of the prices of tradable goods are identical for
importable and exportable and for outputs and inputs. The private Unskilled labour: Valuation of unskilled labour begins with an
prices of tradable commodities (for the top row of the Policy Analysis assessment of the degree of unemployment and/or underemployment
Matrix) are found in farm budgets from actual market prices at the of such labour. Where extensive unemployment and/or
farm-gate. The counterpart social prices are border prices (comparable underemployment exist, the (practice adopted is to take a fraction of the
import prices for importable and export prices for exportable). current wage rate as the shadow price of unskilled labour. The arbitrary
figure of 50% of current market wage rate or the minimum wage rate is
The social (or efficiency) prices of tradable commodities are given often selected as an estimate of the opportunity cost of labour. The only
by comparable world prices because the import or export prices are underlying argument for the selection of this arbitrary figure is that for
the best measure of the social opportunity cost of the commodity. economic with high rates of underemployment the opportunity cost
For additional unit to satisfy domestic demand, for an exportable, the will generally is significantly less than the market wager rate.
export prices are a measure of the opportunity cost of an additional unit
of domestic production since that would be exported, not consumed Skilled labour: Most instances skilled labour in developing
domestically. The world prices in domestic currency units is equal to countries is in short supply and would in all probability are fully
the world prices in foreign currency time the foreign exchange rate (the employed without the project. As a result, wages paid to such personnel
conversion ratio given in domestic currency units to foreign exchange are generally taken as representing the true economic value to the
rate (the conversion ratio given in domestic currency time the foreign society.
currency units). The calculation of social price of output begins with Land: In economic analysis, land is valued at its opportunity cost
the (Free on Board) export price for exportable and (Cost Insurance which is its net value of production foregone when the use of land is
Freight) import price for importable. These border prices are located changed from its "without project use" to its "with project use" Ministry
at Port-Sudan. The sources of these prices are the annual reports of the of Finance [7].
Bank of Sudan.
Estimating the shadow exchange rate factor and standard
The first step for deriving social outputs is the disaggregation of conversion factor: The shadow exchange rate (SER) is the economic
these inputs into domestic and foreign components by applying the price of foreign currency. There is a common misconception that if
standard percentages of foreign components of tradable determined by the market for foreign exchange is a free float, the shadow exchange
the Ministry of Finance and Economic Planning. rate (SER) is equal to the market exchange rate. That would be the case

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 9 of 12

only if there were no taxes and subsidies on the demand and supply derive the corresponding economic values. Conversion factors can be
of tradable goods, if all commodities and factors were priced at their calculated from [15].
economic value, and if the current account was sustainable. In all cases,
Private profitability: The data entered the first row of Table 7
the (SER) will diverge from the market or official exchange rate (OER).
provide a measure of private profitability. The term private refers to
Exchange rates are one of the key macro-prices affecting project observed revenues and cost reflecting actual market price received
performance. If the (OER) is taken as the (SER), and the (OER) is or paid by farmers, merchants, or processors in the agricultural
overvalued, then projects producing non-tradable with tradable inputs system. The private, or actual, market price thus incorporates the
are favored relative to projects producing tradable with non-tradable underlying economic cost and valuations plus the effects of all policies
inputs. and market failures. In Table 7, private profits, D, are the difference
between revenues (A) and costs (B+C), and all four entries in the top
On the other hand, if the (OER) is undervalued, projects producing
row are measured the observed prices. The calculation begins with
tradable with non-tradable inputs are favored relative to projects
the construction of separate budgets for farming, marketing and
producing non-tradable with tradable inputs. In the event that the
processing. The components of these budgets are usually entered in
OER is depreciated to attain external competitiveness, or the OER is
PAM as local currency per physical unit, although the analysis can be
appreciated to attain internal competitiveness, project performance
carried out using a foreign currency per unit. The private profitability
suffers. In general, the greater the divergence between the OER and
calculations show the competiveness of the agricultural system, given
the SER, the more likely will depreciation or appreciation occurs and
current technologies, output values, input costs, and policy transfers.
affects project performance.
The cost of capital, defund as the pre-tax return that owners of capital
Market prices are adjusted to economic values/prices using what require to maintain their investment in the system, is included in
are known as accounting prices, more commonly reflected to as shadow domestic costs (C), hence, profits (D) are excess profits above normal
prices. Shadow prices are introduced to reflect the true economic cost returns to operators of the activity [16]. If private profits are negative
of project inputs and output to the society in order to give emphasis (D<0), operators are earning a subnormal rate of return and thus can be
to those projects which contribute to governments efforts to achieve expected to exit from this activity unless something changes to increase
national development objectives. Shadow prices of goods or services profits to at least a normal level (D=0). Alternatively, positive private
also known as National Economic Parameters, is thus a measure of the profits (D>0) are an indication of supernormal returns and should lead
real worth to the economy of a specific project. to future expansion of the system, unless the farming area cannot be
expanded or substitute crops are more privately profitable [12].
This method of shadow pricing is tedious and time consuming and
consequently rarely followed. Instead, non-traded goods are generally Social profitability: The second row of the according matrix
valued at economic prices by the use of conversion factor. A conversion utilizes social prices, as indicated in Table 7 these valuation measures
factor is a short-cut method for converting prices of non-traded goods comparative advantages or efficiency in the agricultural commodity
and services into border prices. At the most aggregated level a single system. Efficient outcomes are achieved when economy's resources are
conversion factor, the standard conversion factor (SCF) is derived by used in activities that create the highest levels of output and income.
taking the ratio of all exports and imports at the border prices to their Social profits, H, are an efficiency measure because outputs, E, and
value at domestic prices. Shadow prices of non-traded items are then input, F+G, are valued in prices that reflect scarcity values or social
obtained by multiplying the (SCF) with the market prices. This reduces opportunity costs. Social profits, like the private analogue, are the
market prices to their real economic value. The formula for the SCF is: difference between revenues and costs, all measured in social prices
M+X H=(E-F-G). for outputs (E) and inputs (F) that are traded internationally,
SCF = (1) the appropriate social valuations are given by world prices- (Cost
(M + D) + (X − T)
Insurance Freight) import prices for goods or services that are imported
Where, M: Value of imports at border prices; X: Value of exports at or Free on Board export price for exportable [16]. World prices
border prices; D: Total import duties; T: Total export taxes. represent the government's choice to permit consumers and producers
This approach of converting the financial market value of non- to import, export, or produce goods or services domestically; the social
traded goods and services to economic values is considered to be value of additional domestic output is thus the foreign exchange saved
the weakest link in the logical chain of establishing shadow prices. by reducing imports or carried by expanding exports (for each unit of
Many applied studies therefore treat non-traded goods and services production, the CIF/ import or FOB export price). Because of global
approximately [7]. output fluctuations or distorting policies abroad, the appropriate world
price might not be those that prevail during the base year chosen for
Standard conversion factor (SCF) can be defined as the ratio of the the study. Instead, expected long rung values serve as social valuations
economic price value of all goods in an economy at their border price for tradable output and inputs. The services provided by domestic
equivalent values to their domestic market price value. It represents the factors of production-labour, capital and land-do have world prices
extent to which border price equivalent values, in general, are lower because the markets for these services are considered to be domestic
than domestic market price values. The SCF will generally be less than [13]. The social valuation of each factor service is found by estimation
one. For economic analysis using the world price numeracy, it is applied of the net income forgone because the factor is not employed in its
to all projects items valued at their domestic market price values to best alternative use. The practice of social valuation of domestic factors
convert them to a border price equivalent value. While items valued begins with distinction between mobile and fixed factors of production.
at their border price equivalent value are left unadjusted. Conversion Mobile factors, usually capital and labour, are factors that can move
factors can be calculated and used when testing economic viability of from agricultural to other sectors of the economy. For mobile factors,
a project. A conversion factor is the ratio between the economic price prices are determined by aggregate supply and demand forces. Because
value and financial value for a project output or input. This ratio can alternative uses for these are available throughout the economy, the
be applied to the constant price financial values a project analysis to social values of capital and labour are determined at a national level

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 10 of 12

not solely within the agricultural sector. Fixed, or immobile, factors, of Domestic resources coefficient (DRC): DRC ratio assesses
production, are the factors whose private or social opportunity costs the social returns to domestic resources or social profits. Usually,
are determined within a particular sector of the economy. The value of it measures the efficiency or comparative advantage in order to
agricultural land, for example, is usually determined only by the lands determine if the production of a specific crop makes efficient use of the
worth in growing alternative crops. domestic resources or not. The DRC is always calculated by dividing
the factor costs (G) by the value added in social prices (E-F), which can
Effects of divergences (transfers): The third row, divergences
be formulated in a below equation:
arise from either distorting policies or market failures. Either source of
divergences cause observed market prices differ from their counterpart DRC=G/(E-F) (5)
efficiency prices. The symbol I measures divergences in revenues (caused
The result of the calculated equation determines the extent of the
by distortions in output prices), the symbol J stands for divergences in
efficiency or comparative advantage of producing the commodity.
tradable input costs (caused by distortions in tradable input prices), the
Thus, when it is less than one, it shows the country has comparative
symbol K represents divergences in domestic factors costs (caused by
advantage in producing a commodity. While, if it is higher than one,
distortion in domestic factor prices), and the symbol L is the net transfer
this indicates, the DRC value of domestic resources which is used to
effect (arising from the total impact of all divergences). According to
produce the commodity is higher than the contribution of its value
that principle, all entries in the PAM matrix under the third row equal
added at social price [17]. The obtained results can be expressed in the
to the difference between entries in the first row (measured in private
below equations [13].
prices) and entries in the second row (measured in social prices).
Where, DRC<1: Presence of efficiency and comparative
One source of divergences is the existence of a market failure a
advantage to produce a commodity; DRC>1: Absence of efficiency
market fails if it does not generate competitive price that reflect social
and comparative advantage to produce the commodity; DRC=1: The
opportunity costs and lead to an efficient allocation of products or
absence of government intervention.
factors. And the second source of divergences is distorting government
policy. Means of competitiveness international value added: IVA as
an absolute competitiveness measure is defined as a crop revenue
Measures of protection, comparative advantage and competi- less the imported tradable inputs, expressed in foreign currency. It is
tiveness equal to (A-B) in the side of financial (Private) analysis, or (E-F) in the
Nominal protection coefficient of output (NPCO): It reflects economic (Social) analysis side. A crop with positive (IVA) indicates
the price distortions between the private price and social prices, and positive foreign exchange earnings or saving. The principal defect of
measures the extent of policy intervention on the output side; it’s a ratio such a measure is that it neglects the domestic factors [13].
of the price of a commodity actually received by farmers, including IVA=E-F (6)
the distortions due to government interventions, to computed
border equivalent price which would prevail in the absence of market Results and Discussion
distortions. It measures the deviation of domestic prices from their
world or border price equivalent. And it's estimated by dividing the Price incentives and efficiency of resource use
revenue in private prices (A) by the revenue in social prices (E). Output price incentives: The results of the PAM analysis are
NPCO=A/E (2) presented in Table 8 These results show the calculated nominal
protection coefficients (NPCs) for the selected export crops. The NPC
Where, NPCO<1: The presence of government taxes on outputs; is used to measure the output price incentives provided by the adopted
NPCO>1: The appearance of government subsidies on outputs; policy. This ratio is estimated by dividing the revenue in private prices
NPCO=1: The absence of government intervention on output. (A) by the revenue in social prices (E). It measures the extent of policy
Nominal protection coefficient of inputs (NPI): It measures intervention on output side. If this ratio is less than one, it shows the
the actual divergences or distortions between the domestic prices of presence of taxes on outputs. If the NPC is greater than one, it indicates
tradable input and its border or world price. It measures by dividing the presence of subsidies. When the NPC is equal to or close to one
the tradable inputs value in private prices (B) by its value in social (in the absence of market failure) it reveals the absence of government
prices (F). intervention in the output market [11].

NPCI=B/F (3) As it can be seen from Table 8, the calculated NPCs for the selected
export crops during the period under analysis are greater than one, with
Where, NPCI<1: The presence of government subsidies on inputs; the exception of melon, whose NPC averaged about 0.62. This result
NPCI>1: The appearance of government taxes on inputs; NPCI=1: The means that the adopted government policy provided significant price
absence of government intervention on inputs.
Effective protection coefficient (EPC): It is a comparison between Seasons Crops
the value-added measured in private prices (A-B) by the value added   Onion Melon Mango Banana
measured in social prices (E-F), and it’s a measure more efficient to the 2009/10 2.91 0.7 4.37 1.49
policy effect so as it assessing the pure impact of the polices on each of 2010/11 1.97 0.83 2.95 1.6
the input and output and it can be measured as 2011/12 0.96 0.77 1.49 1.34
2012/13 1.87 0.41 1.1 1.17
EPC=A-B/E-F (4) 2013/14 1.43 0.39 4.45 1.21
Where, EPC<1: Appearance of government taxation’s in the Average 1.82 0.62 2.87 1.36
system; EPC>1: Presence of efficiency and comparative advantage to Table 8: The nominal protection coefficients of output (NPCOs) for the selected
produce a commodity; EPC=1: Absence of government intervention. export crops, 2009-2013.

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 11 of 12

incentives to the selected export crops. The explanation for the fact that Competitiveness of cultivation of the selected export crops
mango, onion and banana exports are subsidized while melon export
is taxed can be attributed to the high cost of production of melon and Relative competitiveness: The ability of the cultivated crop to
its relatively low productivity as compared to the other crops for which make efficient use of the domestic resources or not is measured by
the climate is conducive. the domestic resource coefficient (DRC). The DRC as a measure of
efficiency or comparative advantage is calculated by dividing the factor
Input price incentives: The input price incentives are measured costs by the value added in social prices. A domestic resource coefficient
by the nominal protection coefficient on inputs (NPI). The (NPI) is value greater than one indicates that the value of domestic resources
a similar calculation to the (NPC) applied to tradable inputs. It is used to produce the commodity is greater than the contribution of its
calculated by dividing the value of tradable inputs at private prices by value added at social price. A DRC value less than one; indicate that
the value of tradable inputs at social prices. If the value of (NPI) is low, the country has comparative advantage in producing that commodity.
it implies a positive protection to farmers through input subsidy by the The changes in relative competitiveness of the selected export
government, whereas a high ratio implies the opposite, i.e., inputs are crops cultivated during 2009-2013 are shown in Table 11. It appears
taxed by the government. that relative competitiveness fluctuated among the crops in any one
The PAM results obtained for the nominal protection coefficients year and within the same crop over the analyzed years. As it can be
of inputs (NPI) are presented in Table 9. Most of the obtained NPIs seen, all of the selected export crops appeared to be competitive all over
for the selected export crops are less than one during the analyzed the analyzed period. The ability of the selected export crops to use the
period. These results indicate that the adopted policy encouraged the available domestic factors efficiently is the result of the adaptability of
production of the selected export crops through subsidization of the these crops to the climatic factors and soil conditions of the various
cultivation centers. Based on that, it could be concluded that the
inputs used for production of these crops during the period under
adopted policy managed to realize significant improvement in the
analysis.
efficiency of the cultivated crops to use domestic resources.
The overall production incentives: In calculating the (NPC), no
International competitiveness: The results of international
account is taken of the subsidies or levies on inputs. To correct for this
competitiveness (IVA) of the selected export crops are presented in
defect allowance for distortions on both input and output prices is made
Table 12. It appears that in terms of international value, all of the selected
by calculating the (EPC). The (EPC) measures the protection according
to the value added rather than final product. It is calculated in the PAM export crops, especially melon and mango, are more competitive. The
by the ratio of the value added measured at market prices (A-B) to the relatively lower international competitiveness of onion as compared to
value added measured at social prices (E-F). If the calculated ratio of the other selected export crops can be explained by the low yields of
(EPC) is greater than one, this indicates that the protective measures onion due to the climatic unsuitability of some production centers of
provide positive incentives to produce the commodity. A (EPC) which onion (for example, the Gezira area) and the low input intensity level
is less than one, on the other hand, implies net disincentives and for onion production.
taxation’s in the system. Also, the estimated IVAs reflected high variability in international
With the exception of melon, the calculated EPCs for the selected competitiveness of the studied crops during the analyzed years,
export crops were greater than unity (Table 10). This result indicates both within the crops in any one year and within the same crops in
the presence of efficiency and comparative advantage in producing the different years. This variability was due primarily to changes in
those crops in 2009-2013 as a result to the heavy support provided by exchange rate, in addition to changes in yields and annual changing
the adopted government policy throughout the analyzed period. world prices.

Seasons Crops Seasons Crops

Onion Melon Mango Banana Onion Melon Mango Banana
2009/10 0.26 0.32 0.13 0.11 2009/10 0.51 0.08 0.27 0.15
2010/11 0.27 0.3 0.13 0.22 2010/11 0.35 0.08 0.15 0.13
2011/12 0.27 0.3 0.13 0.21 2011/12 0.19 0.1 0.07 0.1
2012/13 0.27 0.32 0.13 0.21 2012/13 0.45 0.39 0.05 0.08
2013/14 0.33 0.32 0.12 0.21 2013/14 0.48 0.03 0.21 0.08
Average 0.28 0.31 0.13 0.19 Average 0.4 0.13 0.15 0.1
Table 9: The nominal protection coefficients of inputs (NPIs) for the selected export Table 11: The domestic resource coefficient (DRC) for the selected export crops,
crops, 2009-2013. 2009-2013.

Seasons Crops Seasons Crops

Onion Melon Mango Banana Onion Melon Mango Banana
2009/10 4.27 0.74 5.52 1.69 2009/10 1818 14146 3098 6333
2010/11 2.57 0.87 3.37 1.78 2010/11 3001 15030 6638 7972.4
2011/12 1.06 0.81 1.58 1.46 2011/12 8199 14866 17021 12175
2012/13 2.42 0.45 1.14 1.25 2012/13 3823 4487 27441 16981
2013/14 1.87 0.4 5.35 1.29 2013/14 4806 59146 5700 19232
Average 2.43 0.65 3.39 1.49 Average 4329 21535 11980 12539
Table 10: The effective protection coefficients EPC for the selected export crops, Table 12: The international value added for the selected export crops, 2009-
2009-2013. 2013.

Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833
Citation: Bushara MOA, Elnagarabi EEEM, Ibrahim IOA (2018) Impact Analysis of Government Policies on the Economic Performance of Some
Horticultural Crops in the Sudan (2009-2013). Arabian J Bus Manag Review 8: 361.

Page 12 of 12

Summary, Conclusions and Recommendations conditions of the various cultivation centers. Based on that, it could
be concluded that the adopted policy managed to realize significant
Summary improvement in the efficiency of the cultivated crops to use domestic
The agricultural sector of Sudan represents the most important resources.
sector of the economy. The area estimated to about 1.882 thousand Also, the estimated IVAs reflected high variability in international
kilometer square and it's classified as one of the largest country in competitiveness of the studied crops during the analyzed, both within
Africa. The total area of the agricultural land in Sudan is approximately the crops in any one year and within the same crops in the different
200 million feddans of which 40 million feddans is cultivated which years. This variability was due primarily to changes in exchange rate,
is amount to about 20% of the total arable area for agricultural in addition to changes in yields and annual changing in world prices.
production. Despite all these opportunities, the production and export
of horticultural products remain extremely weak. Recommendations
This study aims at the examination of the capacity of the potential • Providing extra Governmental subsidies to the importing
demand markets for horticultural products from Sudan as well as inputs for the production, the harvest, and post-harvest
assessing the productive capacities for an expanded horticultural operations.
production. In addition to that, to assess the impact of the adopted • Expand and diversify the product base of horticultural exports.
government policies as regard to outputs, producer's incentives and
resources use. • Adoption of appropriate technical packages to develop the
total output of horticultural exports and improving its quality.
The most important questions of this study was about the
incentives provided by the adopted government policies toward • Reform the structure of the marketing and export system.
export of horticultural products, the competitiveness of the exported
• Self-autarchy of improved seeds and seedling is highly
horticultural crops.
recommended.
The study relies on secondary data pertaining the period of References
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1. The General Administration for Transfer Technology and Guidance (2014).
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The PAM results obtained for the (NPIs) selected export crops are 12. Babiker NO (2012) Impact analysis of government agricultural policy on
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Arabian J Bus Manag Review, an open access journal Volume 8 • Issue 4 • 1000361
ISSN: 2223-5833