128 Scarcity and Surfeitprincipally by the government, banks as well as community organisations.
Here again, the predominance and political influence of the Tutsi commu-
nity ensures that Tutsi businessmen are at an advantage.Trade and Market Structure
Regarding trade and market structures, a number of unfavourable factors
inhibit fair and efficient internal trade of agricultural products. These include
lack of storage systems, bad conservation methods and limited supply chan-
nels, as well as relatively unstable prices. The market structure is imperfect,
characterised as it is by two unequal players. These are a small number of
traders and a great number of producers who access a single and same mar-
ket and deal in a single product. There are few intermediaries and the price
offered is very low. On some retail markets, about 70% of traders are pro-
ducers themselves who sell small quantities of their produce. Producers and
retailers often live far from markets, and can only access the markets on foot.
In Bujumbura, most agricultural products are sold by retailers who buy
from producers or from other retailers. Trade in agricultural products is main-
ly retail. Wholesale trade is less developed and is limited to trade in beans.
Some large consumers purchase via bidding for sale from traders who man-
age to mobilise important quantities. According to other sources, storage of
great quantities is impossible by large-scale traders but this is done by other
contractors of collectors in producing regions depending on demand and the
state of the market.
Poor organisation, lack of transport, the near absence of an information
network, and losses through poor storage undermines efficiency. These mar-
ket imperfections explain abnormal profit margins, instability of prices and
weak incentives for producers. Most of the produce ends up in Bujumbura,
the most important and secure market. The government has done little to cor-
rect these market imperfections that allow a small coterie of influential busi-
nessmen to dominate the trade in agricultural products. On the other hand,
it exercises close and tight control over the pricing of cash crops both in fix-
ing the price and in the marketing of the products.
As a result of these constraints and the decline of productivity, producer
prices have declined enormously in real terms, providing little incentive to
farmers. During periods of good harvests, financial reserves of the stabilisa-
tion fund are used to close the budget deficit in total disregard of the sole pur-
pose of the fund of stabilising producer prices in order to protect them
against fluctuations in prices on international markets. whenprices decline,
the shortfall is not covered by the depleted stabilisation fund. The result is
that the producer's purchasing power worsens.
High population density amid a rapidly increasing population, poor
planning and the relative absence of a coherent agricultural policy have
contributed to worsen the environmental conditions of Burundi. The