Policy Interventions and Economic Benefits for a Market Driven Oil Palm Industry

ABSTRACT In effective policies, Governance structures and management system relating to environmental and social (access to markets and fair prices) performance are perhaps one of the major problems to sustainable oil palm development at various levels; from Governments, international institutions and industry bodies down to individual oil palm companies. The role of the Government is regulatory and to create suitable investment climate. It is a common occurrence for Governments to be involved in the economies of their countries depending on their systems of governance. A state may wish to correct market failures of macro-economic inequity or undesirable outcomes that a pure market-driven system can sometimes produce. The paper examines policy interventions (reforms) and economic benefits for a market driven oil palm sector in Nigeria. It observes that the output market was previously controlled by monopoly marketing board; market liberalization in 1986. It also observes that there are issues of policy uncertainty which undermined the impetus for reform. Also highlighted are the benefits of Government interventions in Agriculture. The kinds of intervention to be taken to have a stable institutional development and regulatory framework needed for the palm oil industry to operate efficiently and for competition to proceed effectively are considered.