The informal regulation of the onion market in Nangarhar, Afghanistan

Giulia Minoia, Wamiqullah Mumatz and Adam Pain

Type: Briefing Paper

Organisation: AREU

Country: Afghanistan

Date: 28/01/2015

Full summary

This briefing paper is based on a study on the onion market which investigates how one agricultural commodity market works and the ways in which social relationships govern access to the market in terms of information, credit, trading costs, returns and risks.

 

The key messages are:

 

  • A highly risky market in terms of price volatility rather than access to credit and price information are the key risks that onion farmers face.
  • This price volatility can partly be addressed by building cool storage facilities to ensure a buffer stock that will mitigate price volatility. However this will not address the influence that key powerful players in the market exert in regulating access and colluding over price and costs.
  • Current liberal market orthodoxy is hostile to market interventions to reduce the risk environment. Such interventions characterise past agricultural transformations and this may be the only means by which risk can be reduced for small farmers now.