Agriculture repeats itself

Chapter 10 of my textbook on Food Policy for Developing Countries discusses nanotechnology and the fact that companies have a vested interest in ensuring that nanotech does not become the next great consumer scare. To do that, they need to make sure there is public debate, address consumer concerns early on, openly, forthrightly, and without condescension. Governments have an important role to play also in clarifying up front what standards will be required. Having a clear regulatory framework will encourage companies to invest and make it easier for them to demonstrate openly that their products meet safety standards. Here is M. Nestle agreeing on the scope of the problem and supplying some new reports on the subject.

There is a hefty debate brewing on which framework should be used to debate international agricultural policies. Doha is going nowhere slowly. At COP17 African countries had been reasonably unified, but are less so now that South Africa is calling for a greater environmental focus, with Ghana, Mali, and Tanzania prominent on the other side of the debate. One of the better arguments in the article:

Harjeet Singh of ActionAid International said that farmers with fewer than two hectares would only be able to make $3 a year at the present rate for carbon. He said he did not doubt the intentions of South Africa in "pushing for climate-smart agriculture as the answer to agriculture's problems" but added that "climate-smart agriculture could benefit South Africa a lot because your farmers are large-scale and carbon markets work for agriculture on the industrial scale".

Cote d'Ivoire has announced the (re?)formation of a state cocoa board that will take over most of the higher level market functions. The article seems to be written from a Ghanaian-centric viewpoint, worrying about how the CdI board will be able to compete with Ghana's and the likely impact on world prices [which will be lower, duh, because the civil war kept cocoa production and sales much lower].

And for variety, here is an interview with a Zimbabwean crocodile farmer. He has 10,000 crocs at a time, which he exports to Europe and Asia to sell their skins and meat. Among his major costs are importing the beasts to feed the crocs and trying to get enough eggs to keep the project at that size.

Lit in Review: Impacts of thte 2010/11 Surge in Food Prices

Ivanic, Maros, Will Martin, Hasan Zaman. (2011). “Estimating the Short-Run Poverty Impacts of the 2010-11 Surge in Food Prices.” World Bank Development Research Group, Policy Research Working Paper 5633, Apr

In the 2007/08 price increase, most of the price increase was concentrated in staple cereals. This meant the effects were concentrated on the poor who had few outside options to shift to. In the current price shock, however, food prices have increased in many more commodities and by less overall. This means there are more substitutions available and much of the hit has affected foods the poor consume less of anyway. As a result, they estimate that only 44 million more people are poor instead of the 105 million more in 07/08.

However, it appears that price transmission is higher this time than last.

Political Economy of Conflict Prevension

The Economist argues that Ghana blocked AU forces from resolving the Ivorian conflict because Ghanaian cocoa smugglers benefitted, while Nigeria was preoccupied with its own election.

Mamdani on Cote d’Ivoire:

When it came to Zimbabwe and Kenya, power-sharing arrangements were put in place, with a helping hand from SADC in Zimbabwe and the UN in Kenya. The objective in both cases was to avert a full-blown crisis. …  In the Ivory Coast, however, the UN insisted on an election, and … [then] came in with guns blazing to force a military implementation of its preferred solution.

Blattman on Mamdani:

1)      “Outside influence is strong, but this is not a nation that complacently follows the orders of an international agency.”

2)      “Mamdani also holds up power-sharing as a means to avoid crisis. But crisis in what space of time? What one wants is a political equilibrium stable in the long term. I’m less confident that the power-sharing route is a successful one–in terms of either growth or stability.”

3)      “So, for the hundreds of elections yet to come in Africa, what message do you want to send to incumbents or opposition rulers who lose the poll: stand and fight for a power sharing agreement, or accept the outcome?”

4)      “If the 2010-11 violence was the only life lost for legitimate future elections, Cote d’Ivoire could count itself among history’s least bloody democratic transitions. I think Mamdani’s point is that this will not be the last blood shed. He is probably right. But the historian and the economist alike ought to ask: what is the counterfactual? Fewer deaths? Less uncertainty? Lower poverty? Lesser oppression? Personally, I think not. But that is just a guess.”

De Mesquita has another argument for why bad economic times would promote terrorism, even though most terrorists are better educated and have higher income than average. First, if terrorist cells screen for skills that do well in the labor market, they will be more interested in hiring the better educated. Second, if economic downturns increase mobilization, that will increase size of the pool from which terrorists can recruit, enable them to further select from the top.

Food price jumps

Wholesale food prices in the US saw the largest one month jump in Jan-Feb since the 1973/4 food crisis.

Most of the increase was because of a sharp rise in vegetable costs, although meat and dairy prices also jumped. Harsh winter freezes in Florida, Texas and other Southern states damaged crops, driving up vegetable prices. Meanwhile global prices for corn, wheat and soybeans have risen sharply in the past year. That has raised the price of animal feed, pushing up the cost of eggs, beef and milk at the wholesale and consumer level, according to the report. Corn prices are up 59.4 percent from last year. Wheat is up 81 percent, and soybeans are up 29 percent…

However, that doesn’t mean retail prices will go up by that much:

Retailers have focused on cost-cutting and are concerned about passing price increases on to consumers, he noted. "They are very cognizant of the fact that consumers are very budget conscious and they have many options to take their business to alternative retailers -- their competitors," he said. "That plays a major role in them holding increases to a minimum level or not passing them on at all."

Again, this is not about monetary policy. Overall prices went up 0.4%, including the large bump in food prices. That is not how monetary policy affects the economy.

For instance, the rise in chocolate prices to a 32 year high reflects the conflicts in the Ivory Coast and who would collect the tax revenue for chocolate exports, not US monetary policy. Even then, global prices do not always reflect local prices or the timing of price rises:

"We're going to be seeing at least a 30-cents per pound increase in chocolate prices, which is crazy," Oakey said. So far, Oakey says she's locked into a contract this year. So even if cocoa prices rise or fall, she'll pay the same price for chocolates. It's the outlook for next year that's a bit unsettling. "I still have enough to get me through Easter, at least," said Oakey. "But I would say going into the Christmas season, we're going to see some price increases. Either that or change chocolates." … Other chocolatiers, such as Amano in Orem are also feeling an impact in rising cocoa prices, because they're planning their specialty gourmet chocolate purchases a year ahead.

Post-liberation governance, aid effectiveness, and a less dismal science

On the difficulty of running a post-liberation government, with applications to Rwanda, Uganda, and South Sudan: 

the central challenge for power holders is often not economic, but political. Former rebels continue to use the informal mechanisms that suited them so well when conspiring outside government. Power consequently resides in a shadow state, characterised by the personal and reciprocal arrangements which developed in the struggle. … though optimists point to economic progress, the reality is one of intense intra-elite competition with incredible violent potential, as has been witnessed in all three countries in the past and as might soon occur again in Rwanda and South Sudan.

Last month’s violence in South Sudan between rebel groups and the government.   

“Satellite images released by US pressure group the Enough Project, appear to back up claims of troop reinforcements and northern ‘fortified encampments inside Abyei.’ … With the referendum over, [former peace] deals [between southern groups] are now falling apart as groups jockey for power.”

The ‘consensus’ still seems to be that outright war is unlikely, that enough people want to avoid it … but they don’t yet have the trust and social capital to make it a nonissue.

The Africa News Blog cynically posits that the lessons to be learned from Gbago’s fall are not the ones we might wish: don’t hold elections unless you know you’ll win, don’t let the news get out if they don’t, and do your election rigging well in advance (prevent opposition from getting out their voice) rather than trying to stuff ballot boxes.

How effective is aid in Madagascar? Aid doubled between 2008 and 2010 with few noticeable results.

How effective is aid in Haiti? Well, people would rather stay in the tent cities where conditions are much better thanks to the aid. Is that a good thing or a bad thing? It’s just a good thing we don’t have to actually talk to poor people to find out how to do this kind of work (/sarc)

Over lunch two weeks ago, I wondered at the fact that media don’t run more positive stories about Africa like the successful, peaceful, free, and fair elections that happened recently. After all, since the West expects bad news, reporting more bad news is just “dog bites man,” it’s not news. When things go right, why don’t we see more news announcements “Something Goes Right in Africa.” … Might make an interesting blog title, that. 

One answer to why not is because, among the people who have information about the continent, it’s in very few people’s interest to widely spread good news. Another name for it is the Tragedy of the Commons in Selling Tragedy by Kenny, who has a book out trumpeting development successes: Remember Tolstoy’s maxim: “happy families are all alike; every unhappy family is unhappy in its own way.” From its introduction, Kenny writes that

the proportion of the population of sub-Saharan Africa affected by famine averaged less than three-tenths of a percent. The proportion who were refugees in 2005 was five-tenths of a percent. The number who died in wars between 1965 and 2001 averaged one one-hundredth of a percent.

For instance, on the plus side the Somali government prevented the trafficking of a pair of endangered lion cubs. See, occasionally the news in Africa really is about lions!

Big Bag of Africa

One of my better-visited posts dealt with Ethiopian monetary policy. The question is: what is the chance of another Birr devaluation? One vote for pretty good based on pretty simple trends. The currency stays relatively stable against the dollar for 5-6 months, then is devalued. The hope with the last one, though, was that it would be large enough to stave off another such episode for a longer period of time. Blattman ponders:

The under-qualified macroeconomist in me expected Ethiopia’s recent devaluation to actually spur rather than slow the manufacturing sector. In time that may be so. But in a place where inputs and machinery are imported, a devaluation is a mixed blessing. Existing firms must be adding real value to production to succeed. The agricultural export sector, where few foreign inputs are needed, seems to have a brighter future.

South Africa is starting its own development agency. "development assistance for the year 2006 is estimated between $363 – $475 million.  This is 0.18% of South Africa’s GDP from 2006 – which matches the figures for US development assistance as a share of the economy."

People seem to enjoy ranking Africa's leaders. Here is the latest (Hat tip: Africa is a Country)

The Economist does Nollywood (Nigerian Hollywood).

How helpful is fairtrade chocolate? One journalist's opinion is here

World cocoa prices easily exceed the Fairtrade minimum. Kuapa has built schools and clinics but competition for beans is fierce and many other buyers offer farmers incentives, such as loans or machetes or insecticides.  Some farmers are loyal to Fairtrade but many have good reasons to sell their beans elsewhere.

Farmers are an important lobby in Ghana, which has seen two government changes in the last five elections, and hence

Ghana has fixed a minimum farm gate price of 3200 cedis, or $2165, roughly two thirds of the world market price.  It is unusual for farmers to be this well rewarded.  During the late 1970s, producers received just 10 per cent of the world market price.

This means fair trade matters less in Ghana than it used to now that the alternative is not as bad.  Here is another good article on the subject.

Speaking of chocolate exporters, there's a new article on Cote d'Ivoire which "traces the civil war to the politicization of citizenship and ethnicity during the democratization process."

Food Crises in Africa

Minot of IFPRI researched the transmission of the 2007/08 global food price crisis to African food prices in 12 countries. African food prices increased about 63%, with significant variation - much larger in Malawi, smaller in Uganda for instance. With a more concentrated set of prices, about half of the rice prices moved significantly with global food prices but most other food prices did not respond significantly over the longer term. He hypothesizes three factors that would influence this: the size of the shifts, the importance of oil prices in the crisis, and local policy factors. "In general there isn't a strong relationship between African prices and world market prices" and any connections are stronger for wheat and rice than other commodities.

The Tunisian revolution is unusual for many reasons. One is just that revolutions are unusual in Africa. A second is that it does not appear that the revolters have anyone in mind they would like to put in power; they're just kind of against whoever takes the reins at the moment. A third is that there is a wide variety of reasons given by the protestors, including responses to high food prices but that isn't the first thing being mentioned in most stories. A fourth is that Tunisia also appears to be unusual when compared with other Arab states, Cowen's principle mention being that there are significant policy areas they get right, like clean water provision.

Food prices are rising fast in Cote d'Ivoir:

In the northern city of Odienné and in Gagnoa in central Côte d’Ivoire, before the election crisis a kilogram of sugar cost the equivalent of about $1.25. It now costs $2.40; and the same goes for a litre of cooking oil. A sack of rice now costs around $35 in Odienné and the centre-north city of Korhogo; families could buy the same sack before the political crisis for around $26. In Abidjan [the capital] a kilogram of meat cost $2.80 before; now prices range between $4.40 and $5. ...

In Abidjan’s wealthier neighbourhood of Cocody, Fatim Touré [food retailer] sat waiting for clients. “Many people just turn around when I tell them the prices,” she told IRIN. “But it’s not the vendors’ fault; with this crisis, hauliers are charging more for moving vegetables into Abidjan.” She said a sack of aubergines which used to cost her $20, now cost $26.
Cooking fuel is costing families more: In Abidjan a 12-kg bottle of propane gas that went for about $9, now costs about $13. A market vendor in Gagnoa told IRIN charcoal there used to be $10 a sack; now it’s double that. ...

Higher-income families in Abidjan are able to keep extra food at home just in case of further unrest. Some said the most significant impact for now is that they feel confined to their homes. “Every week we stock up at the supermarket, just in case,” bank executive Bertrand Comoé said. “I don’t allow the children to be out after 6pm. Everyone is home by that hour; it’s like a prison. It’s stressful, but we have to do what we can to avoid the worst.”

And let's not forget the role of BLOOD CHOCOLATE in Cote d'Ivoir's current political struggles.

FAO happily announces that Niger's food production is up 60% over last year and that the livestock that survived last season's drought are now well-pastured.  The people, however, not so much. Malnutrition and food insecurity are still quite high. "FAO/WFP called for an improvement in family purchasing power in Niger by assisting pastoralists to replenish their livestock and boosting off-season agriculture such as vegetable and roots and tubers production."

The Africa News Blog is concerned that drought could seriously hamper Kenya's economic growth (6% last year), ability to provide electricity, and political stability.

Yglesias:

I think speculators get a bad rap and speculation is a stabilizing impact on commodity prices. The easiest illustration of this comes from the price of onions. Onion futures trading was banned in 1958 at the behest of then-congressman (later president) Gerald Ford who felt speculators were engaged in price manipulation. The result is that onions are one of the most unstable commodities out there:

And for a food crisis of a different kind: for authentic African cuisine in Dubai, there's just one place to go: Tribes, serving authentic African BBQ and burgers, accompanied by authentic music: Wakka Wakka.  Hoo boy.

More from Sudan

Blattman argues that pastoralists in Sudan are part of a reaction against statehood. He has a book on anarchist history to recommend. [Video on Sudan's pastoralists and their concerns about statehood below the fold]

FAO happily reports that food insecurity decreased in southern Sudan during 2010 thanks to favorable rains. Though food production is up 30% on 2009, there is still a sizable food deficit. People returning to the area following the referundum are expected to increase food demand further, increasing the deficit. The range of estimates suggest an increase of 40-170% in the number of food insecure people.

Texas in Africa on political stability:

My real worry for this situation is not that war will break out between north and south ... but rather than tensions within the South will be played out in the context of an extremely fragile state. Southern Sudan will immediately become one of the world's poorest, weakest states - albeit one with oil - with a plethora of ethnic groups who don't see eye-to-eye on everything. That's rarely a recipe for stability.

McDoom at the African News Blog on southern Sudan's ability to govern itself:

“Is (the south) ready to govern itself? That’s what they’ve been doing for the last six years, doing just that,” David Gressly, the top U.N. official in the south, said.
It has its own constitution, a separate central government,  10 state governments all answering to Juba, its own parliament and even its own laws.
The two regions even have different banking systems...Juba in fact kept an entirely separate immigration system.

According to the Economist, Arabs have viewed the separation in a much different light than other groups. Some have claimed it is part of a Western plot to isolate Arabs, while others have pointed out to the implications for Kashmir.

Blattman also discusses [below the fold] a few important points on thinking about using aggression and the threat of aggression to bring about peace. Granted, he's largely discussing Cote d'Ivoire, but the principles apply equally well to any future instability in or around southern Sudan. Also below the fold are two videos: one on the life of Sudan's pastoralists and The Daily Show on Clooney-vision.

LDS in Africa: Emergency Preparedness

Non-African missionaries from the Church of Jesus Christ of Latter-day Saints have been transferred from Cote d'Ivoire because of the post-election political unrest to Benin and Togo.

A midwife in Ghana reports how an LDS training mission to teach resuscitation techniques are saving lives.

Cowpea and Cocoa

Cowpea (black-eyed pea) is one of those wonderful nitrogen-fixing plants that improves soil quality after it's harvested. Cowpeas are high in protein. They also happen to be quite tolerant of a wide range of temperature and rainfall. Africa produces 5.2 of the 5.4 million tonnes of cowpeas worldwide and researchers are working to protect it from its many pests to increase household food security and farm income - most cowpea is currently grown for subsistence.

Public/private partnerships are trying to market black-eyed pea bread (cowpea flour, wheat flour, and peanut butter) as a cheaper, nutritious alternative to all-wheat bread, but the volume is still pretty small. Cowpea flour is only really replacing about 15% of the wheat flour - bread needs the wheat gluten to rise properly - but somehow reduces the final price by 40%. As with replacing gas with corn, cowpeas look a lot more attractive when wheat, rice, and maize prices are high.

Cocoa production has flatlined over the last 10 years in Cote d'Ivoire, the world's largest cocoa producer, largely because the civil war that split the country between rebel north and government south has halted investment and the trees are beginning to show signs of their age. Chocolate companies have mostly tried to sort through increased price volatility by offering smaller chocolate bars (hidden price increases) and using less cocoa (lower quality). They are also diversifying production away from one volatile country. Ghana, the #2 cocoa producer, is trying to take advantage with a financing deal 25% larger than last year's. It seems that companies, however, are trying to diversify out of the region altogether into Indonesian and Vietnamese cocoa.

In other African hunger news, a USAID project in Southern Sudan has been having some success in what was once the world's hungriest town. Primarily the $2 million has been spent hiring young men to build fences and infrastructure to enhance government capacity and security. The increase in paid employment has reduced hunger and the hope is that there will be longer term benefits in terms from reducing conflict.

And, at best tenuously related to most of this, more on WalMart's South African acquisition ambitions, political analysis of the DRC's decisions to temporarily halt all artisanal mining (TiA calls it "unintended" consequences, but the analysis says anything but), and a report on an entrepreneur in a Malawi refugee camp. "I hope that this installation in the Perspectives of Poverty project will help to ... show people as whole human beings, not merely victims of tragedy."

LDS in Cote d'Ivoire

The experiences of one Latter-day Saint woman in the Ivory Coast:

Sister Powa served as first counselor in the Cocody Ivory Coast Stake Relief Society presidency during the Ivorian civil war in 2002. ... Visiting teaching — traveling to the nine wards in her stake and making sure all the sisters had food and water — were big responsibilities made harder when the police instigated a curfew, Sister Powa said. When they couldn't visit teach in person, they made telephone calls instead. But they were thankful they had followed President Gordon B. Hinckley's counsel when he advised members to collect food storage for emergencies. ...

When families from the war-stricken area of Ivory Coast left their homes, the bishops asked the members of Sister Powa's stake to host them. Most of them never returned home, but stayed and tried to begin life anew. ...

"We taught them that they should keep their faith; most of them did keep their faith," she said. "You have to rely on God. If you don't have hope, your life is gone. You have to keep praying that the war will stop; you shouldn't give up."

Eventually, the war did end, but members still face difficulties every day. What amazes Sister Powa about her ward and stake are the people who walk miles and hours to and from church, who have tough challenges in life and who sell goods on the street to feed their families when no other jobs are available. These people come to church with smiles on their faces, excited to be part of the gospel, she said. ...

When she came to Utah, Sister Powa was happy to discover that the Spirit works the same way here as it does in her own country. ... hen she arrived in Utah she noticed something different and was surprised by what she found.

"It's like you have something special, but you don't know it. You just take it for granted," she said. "When someone in Ivory Coast takes [the gospel] seriously, the life of that person changes a lot ... In Ivory Coast, you are excited about [it]. This is the Church of Jesus Christ."

"All I know is that I'm so happy to be in the Church. I love when I went to the temple; the Spirit is the same inside," she said. "This is what I like — the Church is the same no matter where you are...."

The nearest temple for LDS in Cote d'Ivoire is in neighboring Accra Ghana, approximately 260 miles from the capital, Abidjan.