One issue that has long troubled development economist is how to make
agricultural markets work better for the poor in less developed countries such as
Mozambique. Recently, seed vouchers have been used to distribute seed during
emergencies, but some worry that seed emergency programs are setting up a parallel
distribution channel that crowds out private investment in the commercial seed sector.
This study determines smallholder’s probability of buying maize seed in markets with
both emergency and commercial seed. Results show that smallholder’s probability of
purchasing maize seed remains very low, especially in north (0.12-0.22) and central
Mozambique (0.19-0.38). Results also show that producers who receive emergency seed
are relatively less likely to buy seed. These results are consistent with the view that
continued distribution of emergency seed may prevent development of seed markets in
emerging economies. Based on these results, several recommendations are offered to
policy makers.