CHAPTER 3
FOOD SYSTEM CONTEXT
3.1 Introduction
This chapter is intended to assist in identifying agricultural production, marketing, and
consumption patterns, and the policies that influence these patterns.  The identification of
these patterns should rely on past studies and professionals (government, researchers,
NGO's) with experience in each of the areas. For each part of section two in this chapter
there are worksheets in separate appendices to guide the reader through the process of
understanding the important context required for monitoring and reporting price behavior.
This manual focuses primarily on monitoring price and market development for staple and
cash crops.  The approach of understanding the production system, consumption patterns,
and the policies that influence trade also applies to livestock markets.
3.2 Important contextual information
The context within which prices are determined is essential to be able to understand prices.
The contextual information includes agricultural production patterns, consumption patterns,
domestic marketing patterns, external trade patterns, historical and  current marketing
policies, and macroeconomic patterns.  In each section there is an example worksheet to
reinforce the concepts discussed in that section, with a blank worksheet in the appendices to
be completed by the analyst.
To supplement and verify the information discussed in these sections and generated using
the worksheets, it is important to acquire relevant studies done by government (ministries,
research sections, or Central Statistics Office), universities, donors, UN agencies, and
NGOs.  Although an analyst can have a good understanding of some contextual information,
these studies will both reinforce some information already known and add new information
that will strengthen the monitoring and reporting.
3.2.1 Agricultural production patterns
Knowledge of agricultural production patterns is important to price analysis because:
it provides the basis for selecting which commodities to monitor since people
usually consume what they produce (with the exception of cash crops)
it provides the basis for selecting which markets to monitor since surplus and deficit
areas tend to have different price behavior
it provides context for understanding historical price behavior (time series analysis)
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