Escobal, J. (Ed). Comercialización agrícola en el Perú. Lima: GRADE; AID.

The elimination of market imperfections has been proposed as an alternative to the discretionary management of relative prices, as far as support policy for the agricultural sector is concerned. The increase in productivity and the reduction in unit costs that this type of policy would generate would improve agricultural profitability without raising product prices and without the need to subsidize the use of inputs.

Within this process of agricultural sector reform, special attention must be paid to marketing systems. During the last few decades, the reduced efforts of the public sector in relation to agriculture have concentrated on improving agronomic conditions, raising productivity. However, this effort has been made without paying much attention to the relationship between products and the market. In a liberal environment such as the one that has been taking hold in Peru, the competitiveness of agricultural markets is a crucial element to ensure that the price system allocates resources efficiently.

There is little point in raising yields of a given crop if the absence of adequate infrastructure, information or institutional arrangements prevents the producer from obtaining a higher value for the sale of his product, as he has to face uncompetitive markets. The studies in this book help to explain why the lifting of certain restrictions that existed before 1990 did not lead to what Anglo-Saxon scholars call “the right prices”. What happens is that such lifting of restrictions is a necessary condition, but it is not sufficient to improve the efficiency of agricultural commodity markets in Peru. Indeed, the existence of non-competitive market structures and the presence of externalities -both positive and negative- condition the operation of agricultural product markets in the country; this opens up a little-explored field of state intervention, in which the government, instead of displacing the private sector, seeks to reduce these market imperfections.