West African Trade: A Study of Competition, Oligopoly and Monopoly in a Changing Economy

Apart from the establishment of the marketing boards there have in recent years been other official measures, as well as numerous proposals for others, designed to alter the structure of the marketing of West African produce. This part of the study reviews certain measures and recommendations which stem from influential opinions onmarketing reform in West Africa and elsewhere. Some of the proposals bear on the import trade and internal trade, as well as on the export trade, with reference to which they are usually advanced.

In Chapter 2 it has been shown that the very large number of intermediaries in West African trade is to be explained in terms of underlying economic factors. In particular, it reflects the low level of capital and certain other productive resources and a comparative superabundance of unskilled labour in relation to the opportunities open to it. In these conditions the multiplicity of traders (both in the sense of a large number of traders at any given stage of distribution and of a large number of successive stages) is economic in the use of available resources.

These considerations are generally overlooked by the critics of the alleged wastefulness of the system. Compulsory reduction in the number of traders is often proposed in the belief that it will eliminate waste and reduce distributive margins. It is believed or implied that such a course would reduce prices to consumers or raise them to producers, and that some of the resources set free could be turned to more productive employment, notably to the production of more food.

As a general rule the services of an intermediary will be used only if the cost of his services to his customers (i.e. his margin) is less than the value set on them by the customers, whose capital, time and labour he saves. These services include bulking, blending, holding and distributing stocks, breaking bulk, and the establishment of market contacts. The intermediary will become redundant and will be by-passed if he is superfluous or if his charges are excessive.

This general consideration clearly applies in West Africa, where, no doubt as a result of the low level of incomes and of the comparative lack

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