Agricultural Efficiency Gains and Trade Liberalization in Sudan

The traditional agriculture in Sudan occupies 60% of the total cultivated land and employs 65% of the agricultural population. Nevertheless, it is characterized by its low crop productivity, which is mainly driven by low technical efficiency, while drought and civil conflicts threaten most of its areas countrywide. Therefore, it has contributed only an average of 16% to the total agricultural GDP during the last decade. This paper addresses from an empirical point of view the sectoral and macroeconomic implications of agricultural efficiency improvement in Sudan and assesses the efficiency gains under the assumption of trade liberalization. Efficiency improvement experiments are implemented by augmenting the efficiency parameters of labor, capital, and land in a Computable General Equilibrium (CGE) framework. The CGE model of the study relies on the newly produced Sudanese Social Accounting Matrix (SAM), which provides data on 10 agricultural sectors, 10 industrial sectors and 13 service sectors. Results show that improving the agricultural efficiency would lead to improvements in GDP, welfare level, and trade balance. In addition it would also improve the output and competitiveness of the Sudanese agricultural exports and increase their strength to face the challenges of liberalization.