The economics of farm commodity storage: a policy framework

Abstract

This study presents a (simple) policy model underlying farm commodity storage for a development economy. Utilizing a simple statistical/mathematical formulation, the policy model highlights the following: storage is a profitable enterprise with the net revenue function being at equilibrium position where the quantity stored is multiplied into the price difference less storage cost; market price differences resulting from storage activities will become more significant when storage is done for the economic benefit of the farmer such that the net benefit estimates become one of the planning decision parameters. The implication this has for increased government funding in the provision of storage facilities for Nigeria farms cannot therefore be over stressed.


KEY WORDS: Farm Commodity, Storage, Economic Development

[Global Jnl Agric Res Vol.1(2) 2002: 135-142]