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:

Aid effectiveness on a bad day

But all three books make the case that the ineffectiveness of much philanthropy is actually the fault of the philanthropist. They applaud the motives for giving, but all make the point that people too often let their philanthropy be guided by their hearts alone. “Deciding what you will do to make change happen is a choice that requires both your head and your heart”, write Messrs Fleishman and Tierney in the best chapter in “Give Smart”, entitled “What Am I Accountable For?” The biggest problem for philanthropists, they argue, may be that “they are essentially accountable to no one but themselves.”

Some of the problems:

1 - There’s the overall lack of evaluations being done, and even when we do them we can’t simply aggregate the results and call it done, as Blattman points out:

We’re selective in which programs we evaluate, and ten[d] towards the decentralized, uncoordinated, and less sensitive programs. I call it the “non-random impact of random impacts”

2 - Then there's the question of who receives the aid. Do we give to "bad governments"? On the one side, giving aid supports a corrupt regime. On the other, removing aid is likely to harm the poorest instead of the targets. Admittedly, there is a lot of disagreement about the model here: aid is hurting when it goes in and when it goes out. One of the ethical underpinnings, though may just be "strongly determined by how much you discount future suffering versus suffering today," writes Aid Thoughts.

Note: in the case being discussed at Aid Thoughts (Malawi and the British) I do not intend to imply that the Malawi government is “bad” on the basis of their insulting an ambassador. A little more care should be given, in my view, to differentiating between “behavior we don’t like” and actual villainy. If someone wants to argue that the government is villainous, then the debate should be about whether aid should be cut for that reason, rather than because a diplomat was expelled. Although, from an economist's perspective, I guess it reveals the true British preferences.

3 - And then Tales from the Hood tells us it may be time for aid -- all international aid -- to leave Haiti. His argument is that Haiti has been constantly interfered with without ever being given the chance to govern itself.

Tucker argues that this may not be the best thing, that the root cause of Haitian poverty is lack of capital, and the root cause of lack of capital is incredibly bad governance. He concludes unusually, however:

Now, to be sure, there are plenty of Americans who are firmly convinced that we would all be better off if we grew our own food, bought only locally, kept firms small, eschewed modern conveniences like home appliances, went back to using only natural products, expropriated wealthy savers, harassed the capitalistic class until it felt itself unwelcome and vanished. This paradise has a name, and it is Haiti.

Where Tucker gets the idea that Haiti only eats the food it produces is a little beyond me. Starvation is high, but so are food imports. The standard story (which Erica Philips and I debate in a forthcoming case study) is that massive US rice imports have harmed local agriculture significantly.

Big Bag of Africa: Malawi politics, Rwandan agriculture, S. Sudan constitution

Malawi’s politics used to be highly geographic, with each third of the country focusing on one primary party. Between 2005 and 2009, that picture changed dramatically:

The DPP party gained an enormous following, enough that some people have started worrying about single-party democracy. Matt at Aid Thoughts postulates the primary reason for the great upswelling of unity is the national fertilizer subsidy. During the election, parties differentiated themselves mostly be claims of how they would apportion subsidy money. Since DPP had already shown how it (relatively) evenly distribute the money, they were a known entity. Now, is this vote buying, or demand-responsive democracy, or political entrepreneurship, or rampant socialism, or something else altogether?

One of my most-consistently-visited posts dealt with Rwandan agricultural growth prospects being potentially oversold. In the meantime, growth has been good and better than the regional average for five years. Hansl believes the way forward is to invest in irrigation, integrated fertilizer management, diversification of ag products, and most controversially get out of smallholder agriculture:

The relatively high level of land productivity reflects the favorable agro-climatic potential resulting in two harvest seasons, as well as the intensive nature of the predominant agricultural production systems. In contrast, labor productivity remains low compared to these countries, albeit increasing over the last decade. This is related to the fact that Rwanda has the highest proportion of rural population, most of them engaged in labor intensive agriculture. It appears that most opportunities for future productivity gains lie in the area of making agricultural production less labor intensive, in other words less subsistence based.

I commented earlier that the Rwandan hills will make mechanization somewhat difficult.

Comments on South Sudan’s temporary constitution. Primary concerns: it doesn’t say just how temporary, nor how the new process will be more transparent and participatory, nor if there will be term limits which the vice president had spoken in favor of. (HT: Roving Bandit)

Vaguely on the subject of African geopolitics, below the fold is a map of energy connections between African states:

Simple Development Stories vs. Reality

The differences between what we want to do, what we are good at, and what we [maybe] need to do. (HT: Barder, Source)

 We’ll never really be free of simplistic development stories. But at least that means the rest of us can have jobs adding another layer of reality to the debate: No, Malawi’s fertilizer subsidies are not simply a glorious story of an African government bucking “the Man.” IMF austerity programs also made the fertilizer subsidies possible.

Zambia continues its fertilizer subsidy program and is encouraging a Russian firm to build a new fertilizer plant to help them do it.

Saudi Arabia in Ethiopia ($2.5 billion for rice) and Zambia ($125 million for pineapple): “Saudi Star plans to export 2/3 of the food it will grow on the Ethiopian land…” The Saudi government announced this year that there are 27 other countries in whose agriculture it hopes to invest.

Hungry families turning down a free lunch. “When India was poor, its failure to feed itself properly did not seem odd. Poverty was explanation enough. But after one of the most impressive growth spurts in history, the country’s inability to lift the curse of malnutrition has emerged as its greatest failure—and biggest puzzle. … Astonishingly, a third of the wealthiest 20% of Indian children are malnourished, too, and they are neither poor nor excluded.” After complaining that Indian plans to reduce hunger are insufficient given the structural and bureaucratic difficulties, however, the Economist’s answer of turning the program into a CCT that wouldn’t address them either seems odd.

Why? Try Banerjee and Duflo's explanation: "The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. We shouldn’t forget, too, that other things may be more important in their lives than food."

Easterly asks, Why are we not concerned about the brain drain in North Dakota? I don’t know where he was during the previous gubernatorial election, but in the great state he and I share the brain drain out of New York State was a major debating topic. While it’s true no one proposed putting a wall around the state to keep people in, it was still a topic of concern.

Willingness to Pay: Livestock

Awono, Dupraz, and Vermersch, (2011) “Consumer willingness to pay for attributes of west-African poultry: using the microeconomics of implicit price,” GREDI Working Paper 11-01.

By west-African they mean Cameroon. They estimate a hedonic function to get at consumers’ willingness to pay for each attribute. They find that the most important attributes are low cost, being sold in separate parts, and distance to find it (the further the distance, the greater the desire for separate, ready-to-cook parts). This gives frozen chicken – imported from Europe or Brazil – a decided advantage over local “wet” market chicken grown locally. Attributes that were not significant included: taste, product quality, household size or occupation, or education. Imported chickens are blamed with putting many local poultry farmers out of business. The main item in favor of local chicken is that you can haggle over prices.

That apparently is not so much the case in China: “They insist on having the animal killed in front of them so they can guarantee it’s fresh. They need to see the gleam in the animal’s eye so they know the merchant is not cheating them.” Oh, the importance of a marketplace based on trust and enforced quality standards!

Among desirable attributes for meat in general is a certain degree of safety. Food safety is significantly increased by cooking your meat thoroughly. One article claims that we have gotten much better at getting rid of pathogens and contaminants in our pork supply chain, so we ought to be able to cook pork at lower temperatures while maintaining adequate safety, as we do with better cuts of beef. But the culture is so accustomed to only well-done pork that there is little call for recipes with medium-done pork.

Behavioral economics has some interesting things to say about willingness to pay in development contexts. Glennerster and Kremer present a handful of interesting conclusions, based largely on RCTs. For one thing, conditional cash transfers (CCTs) are more effective than we think … and often on “control” groups: Malawi varied up the amount of the conditional cash transfer and even the smallest amount was enough to get the average effect, families in Mexico and Columbia who are near the cutoff for receiving the CCT are also more likely to send their children to school without receiving a penny themselves, scholarships for the best-performing girls in Kenya also induced greater effort from boys. Despite all this wonderfulness, the most cost-effective way of getting more students into school was providing information (in Madagascar) while CCTs in Mexico were the least effective. They have similar fun with health research on intervention uptake. Small incentives matter for individual behavior.

Food price controls

I was looking up information on the Kenya maize price controls from last year to find out if they were still in effect. I found several copies of the same article with a headline that really misses the point. The headline is:

Maize Price Controls Rejected

But that's not what the article is about. Farmers petitioned the Kenyan government: if you're going to go around setting prices, the least you could do is tell us what the prices will be before we plant the seed so we can be prepared. The government's answer was that such a policy would be "an utopian market situation" but that's just not how the Real World works. The government has not ruled out setting prices, or making its grain reserves purchasing and selling practices more transparent (though progress has been made in that direction), but has only decided that it will not set prices at the "utopian" timing that would allow economic actors to plan appropriately.


Aid Thoughts featured two anonymous guest posts on the Malawian fertilizer subsidies, neither of which is as robustly positive as most reactions. The first argues that operational efficiency is the wrong metric to use to evaluate the subsidies because mere technical efficiency does not address opportunity costs or sustainability. What else could be done with the same funds (s/he suggests irrigation investment or investment outside agriculture as two possible counterfactuals)? The second also asks to what extent the program is encouraging overall economic growth and movement out of subsistence agriculture. Without lasting growth of some kind, all the gains would disappear should the subsidy be removed the next time there is a financial crisis.

Fairlie has argued that the livestock sector performs an essential role in reducing downward risk for cereal farmers. If farmers have a good harvest, they don't have to worry about prices crashing through the floor because the animals will eat it. This encourages higher average production, lower average grain prices, and less elastic/less volatile grain markets. This function is then a key public good that livestock provide.

Meanwhile, Syria has been increasing cash payments to poor people, reducing prices on basic foods, and introduced a heating fuel subsidy (72%) for public sector workers just days after Tunisia's leader left office.

An International Recipe

Pork and Beef from NotCanada: Canada has been so kind as to regularly invite the neighbors over for a good old fashioned meat inspection. It saves time and transaction costs to have US inspectors give an opinion or two on Canadian meat products, many of which are subsequently sold south. Normally the inspectors find some problems at a few individual plants and make some friendly recommendations. This time around, the problems they found were far more systematic, the government had failed to follow up on problems noted in the last inspection, the government had also failed to follow its own manuals at plant level, and 6 of Maple Leaf's plants (Canada's largest meatpacker) were either banned from shipping to the US or served notice that they would be banned if they didn't clean up at once.

Quinoa from Bolivia: Once pushed aside by Spaniards in favor of wheat,quinoa's rising popularity among foodies has increased its price seven fold since 2000 even as production increased tenfold. The increasing price, however, has led farmers to export the vast majority of their crop and instead eat rice and beans, lowering the families' nutritional wellbeing. Bolivia and Peru produce 97% of the world's quinoa. Farmers say it is not lifting them out of poverty, but they are living better.

President Evo Morales' government has deemed quinoa a "strategic" foodstuff, essential to this poverty-afflicted nation's food security. It is promoting the grain and has included quinoa in a subsidized food parcel for pregnant women....

Quinoa (pronounced KEEN-wah) provides 10 essential amino acids, is loaded with minerals and has a high protein content — between 14 and 18 percent. The FAO (U.N. Food and Agriculture Organization) says it is so nutritious it can be substituted for mother's milk.

"This food is about the most perfect you can find for human diets," said Duane Johnson, a 61-year-old former Colorado State agronomist who helped introduce it to the United States three decades ago.

Quinoa isn't a cereal. It's a seed that is eaten like a grain, but is gluten-free and more easily digestible than corn, wheat, rye, millet and sorghum. And it can be substituted for rice in just about anything — from soup to salad to pudding to bread.

Onions from India: A delightful article on the political economy of very particular foods and the importance of keeping the urban middle-class happy, rather than farmers.

You might find it hard to believe, but high prices of onions can trigger the fall of the government in India. In 1998, a supply side shock led to a sharp increase in onion prices in the country and most notably, in the state of Delhi. In the following elections, the ruling party was routed in large part due to its failure to control the price of onions in the capital state. Today, onion prices in India are up again, rising by over 100% in just three weeks in December [and the government has responded in short order.]

Commenters complain, however, that onions are in fact a staple and affect the welfare of the poor greatly. (Eg.: "For many poor people in the villages Onion is the only item eaten with bread.")

Beans from Malawi?: Scientists are arguing that the Malawi government should encourage farmers to plant beans (pigeon pea, actually) with their maize to reduce the cost of Malawi's fertilizer subsidies. Pigeon pea fertilizes the ground so fertilizer costs are cut in half, improves the productivity of the synethetic fertilizers that are used, and stabilize and increase production. Currently the talk is of complementing fertilizer rather than removing them.

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.

Not a blank slate

Water Wellness confesses the end of a illusion:

I realized the flaw in my assumptions: the environment I entered was not a blank slate.
When thinking of development in rural Africa, I can see how it would be easy to make this assumption. Most images of the Sub-Saharan portray dry, desolate landscapes that conjure feelings of remoteness and destitution. Yet even rural Malawi is awash with NGOs, private sector activities, religious groups, community organizations, and government programs to name just a few. Despite their proximity, effective coordination is a rare occurrence. Most organizations seem to make the same assumption: that their program is filling some kind of void and takes precedence. ... Rural Malawi is anything but a blank slate.

Big Bag o Blog Links

Facebookistan: the third largest country.

The power of barter: how a teenager turned a beat up cell phone into a Porsche.

Mobile banking for the unbanked - how Kenyan banks and microcredit orgs use mobile banking.

An unidentified LDS bishop in Africa decided he would follow one of the church's programs for youth to experience what it was like. He asked one of the youth verify that he had successfully completed his project similar to how her parents would sign off on hers.

He shared with her the things he had learned and done and then she asked to see his journal entry regarding this experience because that was part of the requirement. He replied, "Well, I did not write about this in my journal. I don't have one." The young woman replied, "Well then Bishop, I cannot sign your Personal Progress book. Come back when you have completed all the requirements." He said that he had learned a great lesson.

A World Bank RCT on AIDS and poverty in Malawi

found that if poor schoolgirls and their families received small monthly cash payments, the girls had sex later, less often and with fewer partners. A year and a half after the program started, the girls were less than half as likely to be infected with the AIDS or herpes viruses than were girls whose families got no payments. The likelihood that the girls would agree to sex in return for gifts and cash declined as the size of the payments from the program rose, suggesting the central role of extreme poverty in sexual choices. ...“The program empowered these girls to make better choices,” said Berk Ozler, a senior economist with the World Bank’s Development Research Group.

Half the girls received no cash payments. The parents of the other half were paid $4 to $10 a month while the girls themselves received $1 to $5 a month if they attended school regularly.

Hat tip: Poverty News Blog.

Meanwhile, Blattman tells us there is something not worth reading. I am thankful for one more data point to support my biases: "I also got talked into reading Wicked. ... I just can’t shake the feeling I’ve lost six hours of my life I will never get back."

Oh, and "I, Pencil" meets iPad.

All you need is ... political will

The simple story: the newly elected Malawian president said "Hey, I didn’t get elected to be a beggar nation, and right now we’re begging for about 45 percent of our food. Do you have any suggestions?" They enacted fertilizer and seed subsidies

Within two years, Malawi went from famine to food exportation. Now the fertilizer subsidies have caught on among neighboring countries—10 are testing similar policies, including Tanzania, Nigeria and Zambia. Faced with the evidence of success, USAID, the World Bank, and many European donors are putting their support behind subsidy programs.

“The dogma was that you don’t subsidize African farmers, even though we subsidize American, European and Japanese farmers to the tune of 1 billion U.S. dollars a day,” Professor Sánchez says. “Things have changed. It was basically the political will from one president.”

One man saved the day. A similar story is being told in Zambia. But now let's talk about the seeds:

A major criticism of the Malawi model is that it encourages farmers to turn to a single staple crop (and yes, it's corn, in case you were wondering...). Horticulturist Linda Larish notes that the traditional Malawian staple, a taro-like plant called manioc, has largely been abandoned by farmers switching to imported hybrid corn.

“Even though they are self-sufficient and can grow their own food, they are at the mercy of the seed and fertilizer companies,” Larish says.

Not by coincidence, Malawi’s policies gave Monsanto a foothold for its hybrid maize in sub-Saharan Africa. Is it philanthropy, PR, or simply shrewd business?

Meanwhile, other scientists are finding ways to improve native rice varieties themselves, rather than merely splicing genes from African varieties into the more popular, commercialized Asian varieties.

Lit in Review: Integrated Soil Fertility in Malawi

Sauer and Tchale (2009), "The Economics of Soil Fertility Management in Malawi," Review of Agricultural Economics, Vol. 31, No. 3, p. 535-560

Integrated Soil Fertility Management (ISFM) uses both organic and inorganic methods to improve soil quality, such as dual cropping complementary crops that can fertilize other and improved following. Sauer and Tchale (2009) review eight studies and produce another one demonstrating that ISFM provides greater productivity, profits, and sustainbility than chemical fertilizers alone for African smallholder farmers.

Maize yields in Malawi -- the subject of three of the case studies for our new Food Policy book: count em, one, two, three -- have been highly dependent on fertilizer prices and government policies. At the turn of the century, government policies had done a great deal to limit the growth of the private fertilizer market. Sauer and Tchale explain that "gertilizer dealers require substantial risk premiums to hold and transport fertilizer in an inflationary economy," and the increasing prices for fertilizer from reduced subsidies, devalued currency, and rising world prices have hurt demand for fertilizer greatly. So Integrated Soil Fertility Management (ISFM) is likely to do substantially better in Malawi relative to inorganic fertilizers only, than it would in other places.

In their study, they find that inorganic fertilizers have a return to scale of 0.5, compared with 2.5 for ISFM; ISFM improved maize yield by 8-9 percent in two areas and 3 percent in a third region. If you include the value of the other crops planted at the same time to fertilize the ground (groundnuts, soy, and pigeon peas), the yield increases. ISFM also significantly increases the marginal value of fertilizer. So supporting ISFM can reduce the government burden of fertilizer subsidies while increasing sustainability, incomes, and food security.