This study has raised a number of issues as regard government policy and its effects on priees, production and consumption of millet and maize, the two substitutable crops in consumption. The objectives of the study were to: (1) assess the effects of specifie trade and real exchange rate distortions on the real domestic maize priee; (2) evaluate the likely implications for maize output;
and (3) appraise whether millet can compete with maize in consumption if trade is free.
In attempting to examine the cereals production, import and consumption in Namibia, this study found that the production was growing at an average annual rate 6.80% and consumption at 6.50 %.
With these growth rates, one tends to make conservative judgement that total needs were adequately met during the study period.
However, the results also revealed that the yield of millet has been substantially low. Hence increasing millet yield in a most cast-effective way remains the key to successful millet production in Owamboland.
The review of agricultural policy during pre-independence period shows that millet has been neglected and as such has never
thrust of the agricultural policy reform has been the promotion of millet production to serve as import substitute for maize.
The analysis also shows that cereal imports were growing at 3.3 % per year. In fact, on average about half of the maize consumed in the country is imported every year. Therefore macroeconomie policy, particularly trade and exchange rate policy, are of vital importance.
In this connection, the analysis of the effects of these policies on real producer priee of maize was conducted. The real producer priee of maize is made up of the real world market priee of maize, the real exchange rate and nominal protection coefficient. For a small country like Namibia, the real world priee of maize is given, while the real exchange rate and nominal protection coefficient of maize can be affected by government policies.
To distinguish between the contribution of change in government policies and external shocks to the observed change in real maize producer priee, the determinants of real exchange rate were examined. The exogenous influence on real exchange rate is represented by foreign terms of trade while the domestic policy-related influences are represented by current account balance, trade policy and nominal exchange rate.
The analysis indicates that foreign terms of trade has a significant positive influence on the evolution of the real exchange rate. The real exchange rate is also found to be
crucial variable is trade policy. The negative significance of the dummy trade variable used as a proxy for overall trade bias on the real exchange rate means that, after independence, there has been an anti-trade bias in government trade policy. In fact the level of real exchange rate overvaluation was found to be higher after independence, averaging 18.75% per year.
Removal of direct interventions such as SACU and maize specifie trade distortions would have, on average, decreased the real producer priee of maize by 17.56% per year and maize output by 0.90% per year during the 1985-1994 period. The removal of both direct and indirect interventions (reflected in correcting real exchange rate misalignment) would result in an annual decrease in the real maize producer priee of 9.24 %, and 0.46% annual decline in maize output during the period under study. In addition, i t has been found that the removal of all the interventions would have significantly reduced the instability of real maize producer priees in Namibia.
The liberalization of maize trade and the elimination of real exchange rate misalignment would result in a decrease in maize output of about 0.46 % on average per year, but in a significant increase in maize consumption of about 2.77 % per year, and in substantial decline in millet consumption of about 9.70% per year.
Clearly millet will not compete with maize in consumption once trade and other distortions are removed. It is difficult to provide
study of trade liberalization that encompasses the entire tractable sector of the economy must be commissioned.
In conclusion, perhaps the most important factors which, if adopted or in place, could contribute to higher and more reliable millet production and greater food security are enumerated below.
In a highly populated area like Owamboland, increasing yield per unit of land is the key to success of millet production but i t must be accompanied by: (1) at the farm level, land preparation, timely planting, improved seed varieties, and insects and weed control, and (2) outside the farm, the most important factor is priee incentives.
Macroeconomie and agricultural policy reforms are necessary to ensure that farmers enjoy remunerative priees. Therefore, the provision of marketing facilities, transport, storage, input supply, credits and support services must be considered.
Furthermore, a significant research programme to increase millet yields must be maintained or designed on a sustainable basis.
Particular attention needs to be paid to areas that show sorne potential (fertile land and water) for crop production. It is anticipated that the findings of this study will help assist in shaping policy in Namibia.
Furthermore, this study raised the following questions which could be the areas of further research: (1) If the government wants to promote millet production, will increase in millet output lead to improvement in household income relative to other income
a profitable venture? (3) Why do people spend more on maize than on millet, the staple food?