Lit in Review: Ghanaian Agriculture

Egyir, Adu-Nyako, and Okafor examine how the "Made in USA" poultry label affects consumer choice in Ghana. Among the statistics they offer, domestic production accounts for 10% of the poultry market. In 2010, the local price was just under $4/lb while imports cost under $1.10/lb Costs could be brought down with better management and vaccine delivery. Two decades ago, fish provided 60% of the animal protein they consumed, but poultry has been growing in importance. Most of the chickens (60%) are bought directly from the farm, with supermarkets only serving the high income group. The poultry packing industry is in its extreme infancy.

500 consumers were surveyed about their attitudes on how likely they were to purchase domestic chicken, versus Tyson (US), Brazilian, European, or Asian chicken. 56% were likely to buy Made in the USA, and 72% to buy Ghanaian. Asian chicken did not score very highly. More than 80% recognized COOL chicken. (That's Country of Origin Labeling, not the fellow on the right.)

Here is Kris Klokkenga's description of the differences between trying to farm in Illinois and in Ghana:

Proving I'm Alive: Big Bag of Blogs

Bellemare on Swinnen's paper on who wins and loses from high food prices and on the benefits to rural smallholders of joining marketing chains.

Tabarrok showing me why I should be very, very afraid: Kucinich and co. try a real life enactment of Atlas Shrugged.

Sumner discovers a second career as Bernanke's shrink, showing how his psychology  helps determine the fate of this recession. (If you wanted to be more sensational about it, you could talk about the discovery of the sinister figure in the shadows: Vincent Reinhart. That would be overdoing it a touch.)

The early impacts of AGRA's investment in Ghana, combining fertilizer subsidies, market access, and variable loan structure depending on outcome (essentially removing downside risk).

I was getting ready to run some proper experiments out here, only to learn that my very presence might bias the games. Of course, now this proposes that I need to replicate this (preliminary) finding itself. How general is the result? (HT: Aid Thoughts and Roving Bandit)

Urbanization in Africa is mostly about population growth rather than migration.

Lit in Review: Case Studies about LDS in Africa

Martinich, author of the LDS Church Growth blog, has published a series of case studies on the growth of the Church of Jesus Christ of Latter-day Saints globally, including on opening new cities for missionary work in general and two case studies in Ghana and Ethiopia showing how that was done specifically. Of interest to me, he recommends leaders use cost-benefit analysis in determining where new cities should be opened as part of the "homework" required for the revelatory process.

In Sunyani, Ghana, there were previously no members of the church in late 2010 when 6 young missionaries and one senior couple were sent in to form three "groups" (very small congregations ... yes, very small) in a city of less than 100,000. In the course of one year they had not only turned two of them into "branches" (small, but self-sustaining congregations, in this case around 50 people attending each week) but a fourth congregation had also been formed. The branches are being led by local leadership instead of missionaries.

In Awasa, Ethiopia, one family had been meeting since 2003 but did not become a branch until 2008 (average attendance about 20). When full-time missionaries were assigned in mid-2010, attendance rocketed from 20 to 70 by the end of the year. There are now four congregations there, though attendance has been highly variable and most of the members appear to be under the age of 21. Some local religious leaders also joined the Church during this time period. The groups are still heavily dependent on the missionaries for leadership and training.

In other posts, Martinich reports on recent Church growth in Sierra Leone and the temporary removal of senior missionary couples from the Democratic Republic of Congo following the election violence last month.

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.

Big Bag of Africa: Statistics, Governance, and Food

Shanta at the World Bank discusses the importance of good statistics to understanding what goes on in Africa:

Today, only 35 percent of Africa’s population lives in countries that use the 1993 UN System of National Accounts; the others use earlier systems, some dating back to the 1960s. To show that this is not an arcane point, consider the case of Ghana, which decided to update its GDP last year to the 1993 system.  When they did so, they found that their GDP was 62 percent higher than previously thought.  Ghana’s per capita GDP is now over $1,000, making it a middle-income country. ... 
Only 11 African countries have comparable data for the same year. For the others, we need to extrapolate to 2005, sometimes (as in the case of Botswana) from as far back as 1993.
In short, even the economists’ celebratory estimate of poverty declining in Africa during a period of growth needs to be taken with a grain of salt.  In reality, there are many countries for which we simply don’t know.
What’s going on here?

The vice president of Zambia, Guy Scott, is, to not put too fine a point on it, white. Jayawardane argues that this will be most surprising to people who believe African countries are primarily divided along ethnic and tribal lines. For Zambians and many other countries, however, status and occupation are much more important dividing lines.

A very vocal critic of Nigeria's government, Richard Dowden, was invited to speak to the government. He reports his shock at seeing Pres. Jonathan nodding and smiling encouragingly as he and other speakers described what was wrong in the government, including being the highest paid government in the world. His assessment of the president is cautiously optimistic, though he also still has some real questions.

My impression of President Goodluck Jonathan is that he is Nigeria’s first intellectual president – a laid back former academic who wants to walk round a problem before deciding what to do about it. He likes to listen and ask questions – taking his time to understand and reframe the problem.

In other news, nearly half of Zambia's maize production got soaked during the rains last week. While it does not have to be destroyed - the government is optimistic it will dry oat - it may well decrease the amount of maize for human consumption that would have been available after another bumper harvest.

Ghana is providing northern farmers with 110 combine harvesters as part of its agricultural subsidy programs that currently lower the price on 100-150,000 tons of fertilizer.

Banana wilt has already wiped out 20% of the crop in one Ugandan district and is threatening nearly all the rest. This is an area where bananas/plantains are a major staple food.

World Food Prize 2 - a few short summaries

Howard Buffett keynote address:

“We cannot solve other people’s problems, no matter how much we spend.”

I like technology. It is an important solution, but it is not and cannot be the only solution.

Soil is more important than seed. You cannot correct low soil fertility by piling on chemical fertilizers. Our high-tech solutions promote monocropping, which isn’t good. None of the poorest farmers have had a soil test done, so we’re guessing at what their soils need. Dead soil has no biological activity: fertilizer is like putting oxygen mask on a deadman.

Farmers are willing to take risks on seed. They buy unmarked bags and unmarked cans because they are cheaper.

Secretaries of Agriculture panel

Ghana – fertilizer subsidies and mechanization are the future.

Mozambique – 4 pillars to increasing agricultural productivity: extension, markets and information, natural resource management, and public-private partnerships. Discussed comparative advantage of different zones of Moz and the need to support farmers in their comparative advantages. We are developing new exports, like cashews.

Q: Tanz and Moz – how are you going to avoid monocropping in your focus on corridors and comparative advantages?

A Moz: We are using crop rotation. We aren’t subsidizing other crops, but we subsidize fertilizer and encourage farmers to compost as well. “But don’t worry” we’re also building a phosphate factory.

A Tanz: Don’t only grow one crop – grow other crops in the same season as well.

Sheeran (WFP)

Farmers in many poor countries reduced production during food price crisis because input prices rose faster than food prices.

Asked a market trader how he set prices. “It’s easy. I go online every morning and find the price on the Chicago markets and give a 10% discount – we are a poor nation, after all.”

Using an analogy from IT – where you use some of your computer capacity to ensure the stability of the rest – what investments and inefficiencies do we need to make/accept in order to get the rest of our food production more stable? Ex: Could WFP reduce dependence in South Sudan down the line by buying food there, even though it is more expensive than in neighboring countries?

When leaders say “not on my watch” it is powerful. It gives accountability.

Lit in Review: Nigerian Agriculture 2

Birol and many coauthors presented a paper a year ago on the place of poultry in African livelihoods. More specifically, they are "Investigating the Role of Poultry in Livelihoods and the Impact of HPAI on Livelihoods Outcomes in Africa: Evidence from Ethiopia, Ghana, Kenya and Nigeria." That is, what would happen to Africans who raise chickens if their flocks were hit by a Highly Pathogenic bird flu?

Most policies that deal with bird flu focus on the supply side problem (replacing the value of lost birds). "According to the records of the World Bank-funded Avian Influenza Control Program, between February 2007 and January 2008, N623,077,880 (US$4,215,683) has been paid to compensate farmers whose birds were culled." They point that there is also a demand side: less demand for the remaining birds whether or not HPAI actually happens when people are afraid it might happen. Even households with no sick birds lost more than two-thirds of their poultry income from the first outbreak in 2006. 75% of poultry farmers either bought no new birds or left the industry,

HPAI is "endemic" in Nigeria, and with Ghana on the migratory route, it has also had three outbreaks. However, because they find that poor people in Nigeria use a variety of livelihoods strategies, even a bad outbreak of HPAI won't affect them much in their total portfolio. Among their policy recommendations is to help increase livelihood strategy diversity - give people more opportunities to earn money.

However, I would point out that one of the reasons they pursue diverse livelihoods strategies is because of the risk involved in trusting in any one activity. They are unable to access better (more productive, more efficient, more remunerative) production strategies because something like HPAI would wipe them out. This keeps average incomes lower and perpetuates poverty and low mobility. Steps to reduce the uncertainty of any activity they already use would make it more attractive and reduce their loss aversion.

I was surprised at the Jimeta modern market this Saturday. I went to the corner where the broiler chickens are and spoke to a poultry seller. I asked him for seven of his nine chickens so my family would be able to get some food storage together. He refused to sell me more than one. It took some time and discussion before he realized that I was not trying to buy his one broiler for only N700 ("No, I want 7") and for me to realize that he would only sell me one for N1120. This being the first time I had ventured out to buy my own chicken, I don't know how much of a pattern this is. Had my Hausa or his English been better, I might have made some headway in understanding what was going on.

Some statistics:

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.

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."

Random Acts of Development

Randomization the easy way: Fantasy Development. Pick your projects, players, books and duke it out with your colleagues to see who can develop the greatest development team.

A call to make the World Development Report a Wikipedia project so that all the (internet-connected) world can participate - also known as Development 3.0

Novel microfinance: goats replace money.

Current world population, updated every second.

Taiwan ($34,700/capita) surpasses Japan ($33,800) in PPP but not market exchange rates.
Review of a "pre-economics" book on How an Economy Grows, Libertarian style. Or, if you prefer, the account of the rise of two Indian corporate leaders "in the thick of the sweatiest corporate wrestling matches."
The first digital images of records from Ghana have been published on beta.FamilySearch.org

NAFTA gives Mexico some advantages (against China) in trading with the US, but needs to do more to take advantage of them. But the former trade minister who negotiated NAFTA "points out that the multiplier effect of exports in Mexico is unusually low. Each export dollar generates only $1.80 at home, compared with $2.30 in Brazil and $3.30 in the United States." Contrary to most trade discussions that argue that developing countries need to focus on building processing plants, the article argues Mexico needs to concentrate on building more of its own inputs so it can gain more from its exports and get access to more markets.

The effect of unconditional cash transfers on London's longest-term homeless. "Of the 13 people who engaged with the scheme, 11 have moved off the streets. ... The outlay averaged £794 ($1,277) per person ... [while] the state spends £26,000 annually on each homeless person in health, police and prison bills."

The difference between quantity education and quality education in Uganda. Private educators are perceived as offering a much better product: 90% of university students were privately educated [students - find the selection bias in that sentence]. The interviewee believes universal education was still a good idea just for getting the culture to believe in universal education and the policy is being followed up with universal secondary education. By way of comparison: building a school in Ethiopia.

Fair Trade Waylaid

Supermarket | United Kingdom

Customer: “Excuse me, where is the tea?”
Me: “Right this way.”
Customer: “Do you have any tea that isn’t fair trade?”
Me: “Excuse me?”
Customer: “Do you have any tea that isn’t fair trade? It’s more expensive!”
Me: “I’m sorry, but I think you are missing the point.”
Customer: “It’s more expensive! That isn’t very fair to me!”

Ghana no longer in the poor country category

A tweet from Todd Moss: "Ghana suddenly no longer poor. GDP rebase puts per cap GDP at >$1300. Bye-Bye IDA. http://bit.ly/cni0K4"

Basically, they adjusted the prices and weights assigned various sectors of the economy. The weights hadn't changed since 1993, but banking and ICT have become much more important parts of the economy since. As a result of the changed weights, GDP per capita is now calculated at $1,318 while the old weighting said it was only $753. Ghana's loans have already gotten cheaper.

Standard Chartered's Razia Khan noted the re-basing would automatically make deficit and debt levels appear more benign but would also mean its tax revenue collection as a ratio of GDP would slide below the average for sub-Saharan African countries.

The rebasing also changes how we understand the structure of the Ghanian economy. Services are now more important (>50% of GDP) than agriculture (30%).

Now the big money question: does this change poverty? If poverty data is based on household surveys, no. If your poverty measure is based on GDP per capita and inequality data, yes. FAO's hunger data, for instance, is based far more on the latter approach. There have been fewer hungry people in Ghana than we believed.

African Agriculture: Chicken Imports, Bananas, and Bangladesh Land Grab

The Bangladesh government joins the group of countries purchasing and leasing land in Africa to grow food for home. They have contacted governments in west Africa (Ghana, Senegal, Cote d'Ivoire, and Liberia). Unlike many other "land grab" proposals, these appear to promise a 50/50 split of food grown so that if Bangladeshi investments can double yields, it is possible for the countries to increase their food availability. As I highlight in my upcoming food policy textbook, cereal yields in west Africa are still more than half what they are in other regions of the world so such a large increase is possible.

Zimbabwe's chicken farmers are upset that the government lifted the temporary ban on chicken imports. Most of the imports come from Brazil and South Africa, which farmers claim heavily subsidize their chicken industries. One kg of chicken costs only $1 to raise in Brazil, but about $2.85 in Zimbabwe which forgoes the use of GMO-inputs. Local chicken sells for roughly $4-5 per kg while the imported chicken goes for $2/kg. The Zimbabwe Poultry Association head complains that "the problem is" lack of government price fixing to prevent retailers from raising the prices on local chickens, which cost much less at wholesale than retail and unfair dumping. Unmentioned are ways government could reduce local costs, help chicken farmers move into other industries, or support both farmers and consumers. Most of what he would like to see happen would benefit producers at the expense of consumers and pit one group of producers against another.

An article praises the benefits of banana culture research and constructing a center to provide marketing and extension services in central Kenya.

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."

BIG Bag o Foodie Links

Water

Libya's Great Man-Made River nears completion at $20 billion and 2,333 miles long to connect the 5% of the country with rain to the rest.

What makes water projects work? Social capital, says IFPRI. Water and sanitation committees (cleverly known as WATSANs) in Ghana are not only more likely where communities have other social groups and less likely where communities are ethnically divided, they seem to improve payment for water services and improve water safety. Female leaders seem particularly important.

Food Safety
Powell gives NY Times reporter Bittman's new book two thumbs down for terrible food safety advice: "This is food safety idiocracy. Any food safety advice in Bittman’s book should be disregarded as fantasy."

Powell also found something worse than e. coli and salmonella:a metal staple in his pretzel-filled M&M. "I would rather take my chances with Salmonella or E. coli that I know I can cook to death rather than bleeding internally to death."  Update: Contrition from Mars goes a long way.

Foodie Faddies
Ben and Jerry's has surrendered. They're taking the "All Natural" label off their ice cream because a number of the ingredients are heavily processed (high fructo... I mean, corn sugar, highly processed? you don't say...)

And speaking of corporations, Wilde lets us know that corporate heads are either deluded or lying when they claim that "Personally, I would like to serve a healthier product.  But, if these efforts threaten profitability, I risk getting sued by stakeholders.  Corporations are obliged to pursue maximum profits and no other goal." A recent study of actual court cases says this is not the case.

If one can argue with a straight face that selling healthier food enhances the reputation and long-term prospects of the company, I think that would count as a reasonable business judgment.

Wilde's best line: "Markets are a great game, but a dreadful religion."

Powell urges us to buy local while avoiding "locavore nonsense" by quoting Doering:

buying local makes a good deal of sense when the natural conditions support the seasonal production of good, fresh local food. Who wouldn’t buy our local asparagus in June and fresh sweet corn and tomatoes in August? ...  What is new is the pretentious elevation of this simple idea by the chattering culinary class to the status of a comprehensive creed, which, they assert, can make a major contribution to a more sustainable food system.

I was in a very chic restaurant in Tucson, Ariz. where the smug chef righteously proclaimed that all his ingredients were locally grown. He was quite offended when I asked him about the environmental and other costs of importing all that fresh water to grow that food in the Arizona desert. And how is it more sustainable to deny developing countries the opportunity to export their tropical fruits and vegetables?

And five programs to improve school lunches:

• Salad bars
• Healthy vending machines (Cornell nutrition and agricultural economics students occasionally foment for that when gradual changes move the vending machines back to less healthy choices.)
• Chefs joining the staff or advising kids on healthy eating and food prep
  
• School gardens (not without controversy)
• Buying food from local farmers

Potpourri
Breakfast in Iraq: "At first this weekend I was jealous of my friends in DC enjoying DC brunches.  Then we went to a local hole-in-the-wall and I saw breakfast. ...  After that, I was basically jealous of myself, because the food was so good." 

Tyson is facing a suit for gender discrimination which could jeopardize millions in government contracts if a) it is proved true and b) they don't give 750 female workers backpay and roughly 100 more female applicants jobs. That could cause a significant market power shift. Change.org naturally assumes guilty before proven innocent.

And the FAO is touting small-holder dairy farms. There are presently over 750 million people engaged in it, with an average of two cows. The most interesting and unexpected problem they bring up is environmental: "Low-yield dairy systems in Africa and South Asia are estimated to have higher carbon footprints per 100 kilogram of milk produced than high-yield systems in the United States and Western Europe."

Let My People Come

New data from Gibson and McKenzie (HT: Roving Bandit, full discussion voxEU) reveals that the gains to high-skilled immigrants are vastly larger than the costs or benefits to others, the benefits to others outweigh the costs, and at worst the value of the negative externalities is less than 2% the private value. Some other of their conclusions:

• the best and brightest stand to earn $40,000-$70,000 more per year by working abroad – which is at least two to three times as much as the developing country individuals would earn at home. 
• Trade and investment is rare, and the net effect is relatively small. ... Moreover, the value-added of this trade creation will depend on the profit margin of the trade deals – if this is only 10-25% of the transaction value, the mean effect will reduce to $500-$1000 per migrant in Ghana, and smaller in Micronesia and Tonga.
• The high-skilled from developing countries do remit, typically sending around $5,000 per year. These amounts are large relative to per capita incomes in their home countries, but less than they would have earned at home.
• The net fiscal cost depends strongly on the progressivity of the tax code. Countries like Ghana and Papua New Guinea which have highly progressive tax rates and spend small amounts on public services per citizen suffer larger fiscal losses than countries like Tonga and Micronesia with flatter tax rates.

Fertilizer Subsidies in Ghana: Politics Matter

A new IFPRI publication discusses Ghana's 2008 fertilizer subsidy program, enacted while fertilizer prices rose 35%:

Governments previously overlooked other aspects of agricultural development, such as improved infrastructure, in favor of costly universal subsidies, and fertilizer was distributed through centralized state monopolies that crowded out private importers and sellers. A more sustainable approach to the role of subsidies in agricultural development calls for temporary vouchers that target smallholder farmers, cultivate demand for private retailers, and exploit the efficiency of private markets.
... The pattern of voucher allocations was not determined by a district’s poverty level. In fact, slightly more vouchers were granted to less-poor districts, which may have undermined the subsidy program by displacing unsubsidized purchases.
A closer examination reveals that the government targeted vouchers toward districts in which the ruling party was defeated in the last election. A district received 2 percent more vouchers for each percentage point by which the party had lost ... The vouchers were apparently wielded to bolster the party’s popularity where it was lacking....
Banful warns that without a mechanism to curtail political misuse, the new subsidies advancing across Africa will likely fall short of their potential to help farmers and stimulate agricultural productivity.

As we discuss in our forthcoming textbook on global food policy, policies are enacted for a variety of reasons to benefit a variety of causes. Is the relevant policy choice between a program that reduces poverty less efficiently and one that reduces poverty more efficiently, or is it between a program that reduces poverty and no program altogether? Efficiency cannot be determined without reference to the goal: improve electoral chances? reduce poverty? increase production? promote long-run fertilizer markets? reduce hunger? keep urban wages low? some combination of all the above?

Successes: Ghana's Community-Based Rural Development Project

Ghana's Community-Based Rural Development Project has been in place for six years now with a specific mandate to work on the Millennium Development Goals (MDGs). It was set up as part of Ghana's Poverty Reduction Strategy (PRSP). What has it done?

• Build infrastructure: "With the construction of five dams, one dugout, 188 feeder roads [1125 km], 20 market structures and 12 slaughterhouses in rural communities across the country, many otherwise disillusioned rural folk can now make something meaningful out of life. ... on-going projects on two wind pumps, eight dams, two dugouts, irrigation facilities, 214 feeder roads, 45 market structures and 15 slaughterhouses, which are expected to bridge the urban-rural development gap." "Most of these are now about 70 percent complete" with another 100km of roads being procured. "Roads that used to be impassable for an average of 173 days now have the duration reduced to 14 days. Communities that had access to only three vehicles on market days now see up to ten vehicles after the roads were improved." "The Construction of slaughterhouses has also provided hygienic and sanitary environment for handling and storage of meat, thus promoting good healthy conditions for the people."
• Capacity building in local government: "provided training for all 138 district assemblies and 454 selected district councils in decentralisation policy and regulations, procurement, financial management, planning, and monitoring and evaluation. ... Also, the entire accounting system for the district assemblies has been reformed"
• Capacity building in private sector: "1,606 trainees have acquired various valuable vocational skills from the Learning Centres found in various parts of the country. Out of these, 1,209 beneficiaries have been given funds to start their own businesses. Nine hundred and fifty-seven (950) of them have actually set up and are doing very well. ... This has resulted in increased employment opportunities with increased income levels and rural livelihood as a whole."

More info here and here. So how are we measuring success?

1 - Not by inputs. Wonderful. Huzzah.
2 - Not by economic growth, poverty reduction, employment, or any of the MDG yardsticks, though there is some attention to increased incomes as a result.
3 - Output of "intermediary" inputs to development.
4 - Not by efficiency of the production of "intermediary" inputs.

The good thing about this is that they are measuring the direct outputs which are readily measurable and accountable. We built these countable roads; we trained these countable people; we gave finance to these countable businesses. It's clear. It's transparent. It's readily measurable and people can verify it.

If the only thing we care about is rural economic growth, this is a problem. It may be reasonably supposed that these inputs produce economic growth, but it's not assured. Given that improved training of government workers only affects growth through improved governance and the governance-growth link is not the most robust empirical finding in the literature, proving that CBRDP has produced growth  to the satisfaction of a reasonably critical audience would be fairly difficult.

But we may care about these inputs in and of themselves. More roads may make life easier and happier even if we can't statistically provide that it produces income. Training government and business leaders can have positive impacts for years down the road. What do we mean by development?

The other issue this doesn't address is if it might have been possible to accomplish the same goals using fewer resources. Is there a private sector or non-profit organization that could have accomplished more, faster, or cheaper? That's another important question, but it shouldn't overshadow the progress that has been made.

Meanwhile, Easterly concludes that Ghana's tourist areas are well set up for the hardier traveling stock, but they probably shouldn't aim for creating another Cancun.

WB on Africa's successes

The World Bank's Kenyan report is out. It cheers that Kenya's economy is recovering from the global recession. They expect growth of about 4 percent this year and nearly 5 percent next year. However, they are concerned that growth is not more widespread throughout economic sectors (mostly non-tradable services) and they really want investments to be made to improve Mombasa's port which slows trade.

The Bank also cheers successes from government getting out of the way:

The best example is Ghana’s cocoa sector, which was destroyed by the hyperinflation and overvalued exchange rate in the early 1980s. When the exchange rate regime was liberalized and the economy stabilized, cocoa exports boomed (and continue to grow). Similar examples include Rwanda’s coffee sector and Kenya’s fertilizer use. Africa’s mobile phone revolution, too, is an example of the government’s stepping out of the way—in this case by deregulating the telecommunications sector—and letting the private sector jump in.

Getting involved where it needed to:

The example of Mali’s mangoes is a beautiful illustration of how, when governments intervene to provide genuine public goods—and only those goods—the private sector can spur growth and poverty reduction. In Lesotho’s textile industry and Rwanda’s gorilla tourism case, too, the government stepped in to provide just the enabling factors for take off.

And giving "smart" subsidies:

In the case of NERICA (New Rice for Africa) or the KickStart pump, the government went beyond providing an initial subsidy. They continuously consulted with farmers about the design of the new technology (in the case of NERICA) and how to market it (in the case of KickStart). They were able to avoid the fate of other subsidy programs that simply provided the subsidy without paying any attention to the beneficiaries’ knowledge or preferences.

I find it interesting that both the market and the government are cheered throughout while also discussing the failures of each. "In fact, what distinguishes these successes from similar efforts that didn't succeed is that they emerged from a domestic consensus or idea within the countries."

What IFPRI has been doing

They've been very busy at IFPRI recently....

The Regional Strategic Analysis and Knowledge Support System (ReSAKSS) is a new data base with some two dozen indicators regarding African agriculture, designed at the request of NEPAD. Immediately from the home page you can generate many comparative maps on GDP, poverty, hunger like the one below showing that they now estimate 90% of the adult population of the Democratic Republic of Congo are hungry.

Ghana has a goal: "In the past five years, Ghana has experienced fairly high levels of poverty-reducing growth, and the country has set 2015 as a target date to achieve middle-income status." They are already classified as lower-middle and are about half-way to upper-middle status.


IFPRI has a useful report out on Gender and Governance in Rural Services in India, Ethiopia, and Ghana. It looks at women's access to agricultural extension and water supplies. Each country has a very different system in place, with different pros, cons, and different recommendations for what to do next. Available for free online, but you can only print 1-2 pages at a time.

A number of PowerPoints on mitigatingclimate change through agriculture came from a meeting last week in Bonn. Includes a proposed study on Payment for Environmental Services to reduce livestock-land degradation cycles. Another paper finds that rural people living near national parks in Costa Rica and Thailand are doing better financially than rural people who are further away from them, largely as a result of new jobs in conservation and ecotourism.

They are releasing a new dataset on chronic poverty in Bangladesh using both qualitative and quantitative panel data on 2000 households. Other papers on Bangladeshi poverty and food security that came out quite recently include:
Agricultural marketing, price stabilization, value chains, and global/regional trade
Cross-cutting issues: Governance and gender
Food utilization and nutrition security
Growth and development potential of livestock and fisheries in Bangladesh
Income growth, safety nets, and public food distribution
Investing in crop agriculture in Bangladesh for higher growth and productivity, and adaptation to climate change

Successes: Private Education in Africa

The assumption among education and aid professionals has been that these private schools for the poor can't possibly be any good, that they're exploiting the poor. There is finally a long study of them now by James Tooley, and the results are very encouraging. Laura Freschi at Aid Watch reports:

Parents living in abject poverty were willing to pay between $1.50 and $7 per month to send their children to private schools even when public ones were available. The places varied pretty widely: India, Nigeria, Ghana, Kenya, and China. Why?

Most reasons that the parents gave for their choice had to do with what the World Bank calls the “short route” to accountability (as opposed to the “long route” which works through the political process). Because school owners’ profits and reputations in the community depend directly on whether parents are happy with their children’s schooling, they paid attention to parents’ complaints. Because teachers in private schools can be fired, they were less likely to be late, idle or absent. ...

Not that the private schools were perfect—far from it: many of the schools Tooley visited were tucked away in poorly lit, dilapidated, smelly buildings without toilets, and teachers there did lack government training certificates, and were paid less than in the public system. But Tooley found that in low-cost private schools, across the board, classroom sizes were smaller, and teachers were much more likely to be found teaching during an unannounced visit. They are also achieving better results: the students in private schools outperformed their public school peers in nearly every subject they were tested in.