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on Agricultural Economics |
| By: | Mohammed, Feiruz Yimer; Khonje, Makaiko G.; Qaim, Matin |
| Abstract: | The small farm sector is home to many of the world’s food insecure and undernourished people. Strategies to make smallholder farming more nutrition-sensitive often focus on agricultural diversification. In addition, women’s empowerment is widely considered useful to improve diets and nutrition. Many studies have analyzed the effects of farm production diversification and of women’s empowerment on dietary outcomes, but mostly in separate strands of literature. Here, we connect these strands of literature to contribute to a better understanding of the multifaceted links between farm production diversity, women’s roles in decision-making, and household diets. Using primary data from Malawi, we show that women’s decision-making is positively associated with farm production diversity and with household dietary diversity. Furthermore, women’s decision-making increases the positive association between farm production diversity and dietary diversity. We also differentiate between different domains of decision-making, including agricultural production, market sales, cash income control, and food purchases. The results suggest that strengthening women’s agency can make smallholder farming more nutrition-sensitive through multiple channels. |
| Keywords: | Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gausfs:347962 |
| By: | Hambur Wang |
| Abstract: | The effectiveness of farmer loan policies is crucial for the high-quality development of agriculture and the orderly advancement of the rural revitalization strategy. Exploring the impact of farmers' borrowing behavior on agricultural production technical efficiency holds significant practical value. This paper utilizes data from the 2020 China Family Panel Studies (CFPS) and applies Stochastic Frontier Analysis (SFA) along with the Tobit model for empirical analysis. The study finds that farmers' borrowing behavior positively influences agricultural production technical efficiency, with this effect being especially pronounced among low-income farmers. Additionally, the paper further examines household characteristics, such as household head age, gender, educational level, and the proportion of women in the family, in relation to agricultural production technical efficiency. The findings provide policy recommendations for optimizing rural financial service systems and enhancing agricultural production technical efficiency. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.00500 |
| By: | Rotem Zelingher |
| Abstract: | Ensuring food security is a critical global challenge, particularly for low-income countries where food prices impact the access to nutritious food. The volatility of global agricultural commodity (AC) prices exacerbates food insecurity, with international trade restrictions and market disruptions further complicating the situation. Despite online platforms for monitoring food prices, there is a significant gap in providing detailed explanations and forecasts accessible to non-specialists. To address this, we propose the Agricultural Commodity Analysis and Forecasts (AGRICAF) methodology, integrating explainable machine learning (XML) and econometric techniques to analyse and forecast global agricultural commodity prices up to one year ahead, dynamically adapting to different forecast horizons. This innovative integration allows us to model complex interactions and dynamics while providing clear, interpretable results. This paper demonstrates how AGRICAF can be used, applying it to three major agricultural commodities - maize, soybean, and wheat - and explaining how different factors impact prices across various months and forecast horizons. By facilitating access to accurate and interpretable medium-term forecasts of AC prices, AGRICAF can contribute to developing a fair and sustainable food system. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20363 |
| By: | Zahniser, Steven; Cardell, Lila; Zereyesus, Yacob Abrehe; Valdes, Constanza |
| Abstract: | Cuba’s economy, which has been struggling since 2016 and fared poorly during the Coronavirus (COVID-19) pandemic, has been unable to achieve a strong, sustained recovery and continues to face lower tourism revenues, decreased agricultural output, energy shortages, and double-digit inflation. This continuing economic downturn has limited Cuba’s ability to import agricultural products and weakened the country’s ability to produce its own food, thereby worsening food security in Cuba. To assess the extent of this problem, researchers at the U.S. Department of Agriculture (USDA), Economic Research Service (ERS) used the International Food Security Assessment (IFSA) model. Results indicated that an estimated 12.8 percent (1.4 million people) in Cuba did not meet the daily threshold of 2, 100 calories per capita in 2023. Due to uncertainties regarding the measurement of Cuba’s Gross Domestic Product (GDP), the researchers considered a scenario with adjusted GDP per capita (based on the average GDP per capita for the Caribbean subregion) and estimated that 37.8 percent of the population (4.2 million people) was food insecure. Although Cuba’s declining agricultural production has increased the need for agricultural imports, the country’s ongoing challenges in earning foreign exchange through tourism, remittances, and exports limit its ability to do so. Under these circumstances, U.S. agricultural exports to Cuba increased in 2021, 2022, and 2023 but were concentrated in a single commodity, chicken meat. |
| Keywords: | Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Security and Poverty, Health Economics and Policy, International Relations/Trade, Livestock Production/Industries, Political Economy, Productivity Analysis |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersrr:348092 |
| By: | Katoch, Sonali; Kumar, Anjani; Kolady, Deepthi E.; Sharma, Kriti |
| Abstract: | This study examines the adoption of compliance with food safety measures (FSM) using cross-sectional data collected at the farm level in three key states of the Indo-Gangetic Plains, Bihar, Punjab, and Uttar Pradesh in 2023. A Food Safety Index (FSI) was developed to assess the intensity of adoption of food safety practices. Determinants of compliance with practices were assessed using multiple linear regression and an ordered logistic model. Generalized propensity score matching was used to evaluate the heterogenous impact of the adoption of FSM on farm-level performance indicators. The findings indicate that farmers are embracing a moderate level (0.48–0.58) of the food safety index at the farm level. The various socioeconomic and demographic factors influence compliance with FSM which include education, income, marketing channel, training exposure, awareness level, and infrastructure. The impact assessment reveals the direct relationship between FSM compliance and performance indicators. However, a lower level of compliance may not yield significant improvements. The study suggests incentivization through pricing reforms, improving infrastructure, and strengthening formal marketing channels. |
| Keywords: | dairy farming; data; food safety; impact assessment; smallholders; Asia; Southern Asia; India |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2281 |
| By: | Mitchodigni-Houndoloa, Irene Medeme; Iruhiriyeb, Elyse; Egahc, Janvier; Afed, Ogouyôm Herbert Iko; Madoded, Yann Emeric; Ayenana, Mathieu A.T; Salaoue, Abdou Mouizz; Videglaf, Euloge; Schreinemachersg, Pepijn; Pitersh, Bart de Steenhuijsen |
| Abstract: | Fruits and vegetables (F&V) share health benefits due to common phytochemicals (e.g., phenolics, flavonoids, carotenoids), vitamins (e.g., vitamin C, folate, pro-vitamin A), minerals (e.g., potassium, calcium, magnesium) and fibers (Kalmpourtzidou et al, 2020). According to World Health Organization (WHO) and Food and Agriculture Organization (FAO) guidelines (2003), the recommended consumption of fruits and vegetables is at least 400 g/day (WHO & FAO, 2003). Unfortunately, F&V intake is far below this recommendation, and the situation is alarming, especially in low- and middle-income countries (LMICs) (CGIAR, 2021). Poor diets are a primary cause of malnutrition and the leading cause of non-communicable disease (NCD) worldwide. Improving diets, including F&V intake, could save one in five lives annually. However, the extent and nature of the problem are poorly understood due to insufficient dietary data, particularly in LMICs. Increasing F&V intake will require starting with consumers, understanding dietary patterns, and addressing desirability, accessibility, affordability, and availability barriers through cost-effective solutions using the end-to-end approach. Solutions to the intractable problem of low F&V intake must be multifaceted and interconnected, requiring a holistic end-to-end approach such as the approach undertaken by the FRESH Initiative. This report describes the results of expert and stakeholder consultations held from 4 to 8 March 2024, organized by the CGIAR Research Initiative on Fruit and Vegetables for Sustainable Healthy Diets (FRESH). The exercise aimed to explore the future role of fruits and vegetables in Benin's food system. These crops are critically important to healthy diets and generate income to value chain actors. It is, therefore, important to understand which trends and uncertainties may shape the future food system and what actors can do to steer developments in the desired direction. In this report, the approach to such foresight analysis is explained, as well as the current state of fruits and vegetables in Benin's food system. Alternative futures are explored regarding their consequences and options for anticipatory policy and stakeholder engagement. |
| Keywords: | fruits; vegetables; phytochemicals; vitamins; minerals; food consumption; malnutrition; non-communicable diseases; diet quality; value chains; Africa; Sub-Saharan Africa; Western Africa; Benin |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158284 |
| By: | Sulinkhundla Maseko (Department of Agricultural Economics, Extension and Rural Development - University of Pretoria [South Africa]); Selma T Karuaihe (Department of Agricultural Economics, Extension and Rural Development - University of Pretoria [South Africa]); Damien Jourdain (Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - BRGM - Bureau de Recherches Géologiques et Minières - IRD - Institut de Recherche pour le Développement - AgroParisTech - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | Evaluating the impact of agricultural practices helps policymakers and farmers in their decisionmaking. In Zambia, most households depend on agricultural activities, in particular maize production. This paper examines the impact of the adoption of residue retention on households' maize yield in northern Zambia. We used the propensity score matching (PSM) method. By using the probit model, we also determined the factors that influence the adoption of residue retention. The results show that adopting residue retention has a positive and significant net effect on household maize yield. Residue retention traps moisture in the soil and improves soil structure. This suggests that a greater focus on this aspect is required to encourage more farmers to adopt residue retention to improve maize yield. Government policies can be structured to promote residue retention among smallholder farmers. |
| Keywords: | impact evaluation propensity score matching residue retention Zambia, impact evaluation, propensity score matching, residue retention, Zambia |
| Date: | 2023–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04525209 |
| By: | Mwombeki, Wiston; Dijkxhoorn, Youri; de Steenhuijsen Piters, Bart |
| Abstract: | This report describes the results of expert and stakeholder consultations held from 10 to 13 June 2024, organized by the One CGIAR program on Fruit and Vegetables for Sustainable Healthy Diets (FRESH). The exercise aimed to explore the future role of fruits and vegetables in the Tanzanian food system. These crops are important to healthy diets and generate income for value chain actors. It is, therefore, important to understand which trends and uncertainties may shape their role in future food systems and what actors can do to steer developments in the desired direction. The report explains the approach to such foresight analysis and describes the current state of fruit and vegetables in the Tanzanian food system with a focus on the Arusha and Kilimanjaro regions. Alternative futures are explored regarding their consequences and options for anticipatory policy and stakeholder engagement. |
| Keywords: | food systems; fruits; vegetables; healthy diets; Africa; Eastern Africa; Tanzania |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158286 |
| By: | Ndolo, Victoria; Chimwala, Dalitso; Musa, Frank; Bempong, Silas; Bannerman, Boateng; Nwabuikwu, Odiche; McCloskey, Pete; Folson, Gloria; Gelli, Aulo |
| Abstract: | Reaching over 400 million children for investments of $50 billion a year, school meals are popular safety nets with documented impacts across social protection, education and nutrition dimensions1. Governments have linked school meals to food system transformation, where public procurement is used as an outlet for farmers, through Home-Grown School Meal Program (HGSMP) approaches. HGSMPs have the potential to improve children’s diets, whilst also providing a market for farmers. Implementing school meals that meet quality standards, including food, nutrition, smallholder sourcing and environmental requirements is critical. In practice, data on the quality of school meal delivery is scarce. There is also an opportunity to improve HGSMP menus, optimizing on foods that are nutritious, locally available and “climate-smart†. |
| Keywords: | artificial intelligence; capacity development; feasibility studies; monitoring; school feeding; Africa; Eastern Africa; Malawi |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158339 |
| By: | Egamberdiev, Bekhzod |
| Abstract: | Resilience thinking has gained prominence in research and policy debates in food security analysis. This article aims to estimate the effect of household resilience capacity on food security outcomes. The manuscript uses the Cambodia Living Standard Measurement – Plus Survey 2019-2020. The measurement of resilience capacity is done through Resilience Index Measurement and Analysis – II by FAO. In the RIMA approach, the manuscript also applies Latent Profile Analysis (LPA) to cluster households, categorizing homogenous resilience levels through “Low Resilient, ” “Medium Resilient, ” and “High Resilient” profiles. In the estimation strategy, the current study proposes a step-by-step analytical approach for using the propensity score matching (PSM) techniques with LPA to draw causal effects of resilience profiles on dietary diversity and food expenditure per capita. The findings generally confirm that “Medium Resilient” and “High Resilient” households have positive effects on food security outcomes compared to those labelled as “Low Resilient” households. |
| Keywords: | Resilience capacity, food security, latent profile analysis, average treatment effect, propensity score matching |
| JEL: | Q18 Q13 O20 C01 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:305322 |
| By: | Isabelle Tsakok |
| Abstract: | Mauritius was on the brink of disintegration in the 1980s, but by 2019 had managed a peaceful transformation from a low income, monocrop, inward-oriented economy to a diversified, outward-oriented, upper middle-income country. Mauritius is now again at a crossroads, having to adapt to accelerating climate change and the impacts of multiple crises. The government of Mauritius has a vision of transforming the country into a knowledge-intensive and inclusive economy of the Fourth Industrial Revolution (4IR). Will it succeed this time? It can if it has the leadership, commitment to deepen reforms already started, and the implementation capacity. |
| Date: | 2023–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_10_23 |
| By: | Andres Fortunato (Center for International Development at Harvard University); Sheyla Enciso |
| Abstract: | This growth diagnostic report analyzes the economic constraints that explain the underperformance of the agriculture sector in Namibia. Section 1 starts by showing why Namibia’s agricultural challenge is unique when compared to the rest of the world. We then describe the sector’s key features, recent trajectory, and growth potential across different relevant dimensions in Section 2. In Section 3, we provide an adaptation of the growth diagnostic framework to the case of agriculture in Namibia and a detailed analysis of its economic constraints. Finally, Section 4 presents policy guidelines for addressing the challenges described in this report and prioritizing policy interventions accordingly. |
| Keywords: | Namibia, Growth Diagnostics |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:221 |
| By: | Bailey Klinger; Ivan Ordonez; Federico Sturzenegger |
| Abstract: | We discuss three cases of corporate-smallholder partnerships in South Africa’s former homelands, which have tried to bridge the problem of low productivity by supplying technology, technical assistance and financing along with established channels for sales and distribution. The cases are indicative of some key difficulties faced by such ventures: building trust, finding a suitable partner, successfully transferring technological to small farms, and reducing risk, particularly climate-related. In order for these types of partnerships to help close the gap between South Africa’s two agricultures, solutions to these problems must be provided at greater scale. We explore mechanisms to achieve that scale, drawing lessons from South Africa’s successful franchising sector, as well as newly emerging business models and technologies from abroad. |
| Keywords: | South Africa, agriculture |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:214 |
| By: | Patricio Goldstein (Center for International Development at Harvard University); Timothy Freeman; Alejandro Rueda-Sanz; Shreyas Gadgin Matha; Sarah Bui; Nidhi Rao; Timothy Cheston (Center for International Development at Harvard University); Sebastian Bustos (Center for International Development at Harvard University) |
| Abstract: | The Colombian Amazon faces the dual challenge of low economic growth and high deforestation. High rates of deforestation in Colombia have led to a perceived trade-off between economic development and protecting the forest. However, we find little evidence of this trade-off: rising deforestation is not associated with higher economic growth. In fact, the forces of deforestation of some of the world’s most complex biodiversity are driven by some of the least complex economic activities, like cattle-ranching, whose subsistence-level incomes are unable to meet the economic ambitions for the region. All the while, the majority of the Amazonian departments’ population works in non-forested cities and towns, at a distance from the agriculture frontier that forms the “arc of deforestation.” The relative urbanization of the Amazonian departments, despite the vast land mass available, recognizes that prosperity is achieved through close social-economic interactions to expand the knowledge set available to be able to produce more, and more complex activities. Achieving economic goals therefore relies on creating new productive opportunities in non-forested, urban areas. |
| Keywords: | Colombia, Peru, Amazon Rainforest, deforestation |
| Date: | 2023–02 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:210 |
| By: | de Brauw, Alan; Bloem, Jeffrey R. |
| Abstract: | Climate shocks are becoming increasingly prevalent because of climate change (IPCC, 2023). Moreover, these climate shocks have more potential to negatively affect populations of low- and middle-income countries, as these populations are more likely to be employed in or around agriculture for income generation, which is particularly vulnerable to climate change (Gitz et al., 2016; Clarke et al., 2022). As a result, mechanisms to help these populations build resilience to climate shocks are increasingly needed to mitigate increases in food insecurity as negative shocks occur. One such mechanism, that has become more prevalent in recent years, is anticipatory action. Anticipatory action occurs when governments, donors, humanitarian agencies, or a combination thereof can effectively anticipate a climate shock and act beforehand to provide aid (often in the form of cash transfers) and advice to those who they believe will be affected, rather than waiting until the onset of the climate shock and providing affected households with post-emergency aid. Anticipatory action takes advantage of recent improvements in weather prediction (e.g., Alley, Emanuel, and Zhang, 2019) and can be designed in several different ways to assist potentially affected households and communities maintain assets, shift production patterns, or smooth consumption through a negative climate shock. These methods can include information, which can help households plan for the shock, and cash transfers, to help households implement those plans particularly if they would otherwise be liquidity constrained. Transfers could take place once or, for vulnerable households in longer onset shocks such as drought, they could take place repeatedly over time. |
| Keywords: | climate; shock; climate change; agriculture; resilience; cash transfers |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158220 |
| By: | Witkowska-Dąbrowska , Mirosława Teresa; Sęk, Robert |
| Abstract: | Excessive or inappropriate use of nitrogen fertilizers in agriculture causes environmental pollution problems around the world. The purpose of the study was to assess the state of farmers’ knowledge of the regulations on the implementation of cross-compliance in terms of the implementation of the nitrate program. The empirical part of the study was drawn up on the basis of a pilot survey conducted in 2022 in the Kolno municipality. The research was carried out on a randomly selected minimum required sample of 65 respondents (farmers). The analyses of the responses presented took into account the age and education of the respondents. The relationship between the state of knowledge and education was confirmed by the chi-square test. To achieve the purpose of the study, a hypothesis was put forward, such as that farmers, although aware of the need to comply with cross-compliance, have gaps in their knowledge of the specific rules of conduct. Based on the results of the study, it was found that younger farmers showed greater knowledge of cross-compliance in the context of the nitrate program, but the best results were found in the group of younger but experienced farmers, starting from the age of 30. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2024–06–28 |
| URL: | https://d.repec.org/n?u=RePEc:ags:iafepa:344433 |
| By: | Russo Gaino, Vitória |
| Abstract: | This paper adds to the literature on origins of institutions through a comparative study of landownership in colonial Mexico and Brazil and argues that pre-colonial indigenous land practices were key in shaping colonial outcomes. While both Portugal and Spain drew on their institutional traditions and historical experience with land grants to introduce the sesmarias and merced systems in the New World, different outcomes emerged. In New Spain, the haciendas produced cash crops and livestock using indigenous labour in large agricultural enterprises. In Brazil, the engenhos, similarly large private landholdings dedicated to sugar production for large-scale export, employed African slave labour almost exclusively. This variation can in part be traced back to the impact of land institutions – while the Aztecs in New Spain were familiar with private landholdings for nobility, the Tupi’s nomadic nature meant that private land was virtually inexistent before colonisation. Hence, the Spanish colonists were able to adapt and build on existing Aztec practices, such as granting land to nobility and using the encomienda labour draft to work these private lands. However, when the Portuguese introduced the sesmaria in coastal Brazil and attempted to get indigenous labour to work the fields, the Tupi rebelled, fought, and fled, and colonists turned to African slave labour instead. |
| JEL: | Q15 F54 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125844 |
| By: | Rabi Mohtar |
| Abstract: | It is estimated that $1 trillion to $6 trillion per year (up to 2050) needs to be invested globally if the world is to stay below the 2°C global warming ceiling of the Paris Agreement and to meet its adaptation goals. Currently, investments stand at about $630 billion per year, way below the original target. And although great efforts have been made in the climate-finance area, more than 70% of the funds deployed have gone to one sector, renewable energy, followed by the transportation sector. The agriculture sector has been severely underfunded, even though it produces 20% of global greenhouse gas emissions. This leaves the most vulnerable communities at risk as the effects of climate change are already impacting this sector intensely. In this policy brief, four principles are proposed as a foundation when deploying funds into climate-change mitigation and adaptation projects: equity, creativity, impact, and transparency. Climate finance has an enormous potential to make bigger impacts when the right principles are applied. |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_20_23 |
| By: | Leonardo Brogi; Gianni Betti; Francesca Gagliardi |
| Abstract: | The aim of this paper is to test the questionnaire developed for a survey that will be conducted in the framework of the PNRR Agritech project. It is a consumer survey to gather information on willingness to pay, preferences and sensory perceptions of sustainable products. A pilot survey was conducted using a web-based questionnaire designed to evaluate and analyse these topics. The questionnaire responses reflect consumers' views on sustainability issues, as they are asked to assign ratings to the sustainability attributes of generic products and to choose between specific supply chain products, such as wine, meat and packaging, in order to explore environmental and social sustainability attributes. The data collected is summarized in frequency tables and charts and can be used to develop statistical and econometric models. Indeed, a logit model and a structural equation model (SEM) using the PLS-PM algorithm were constructed to examine consumer willingness to pay for sustainability attributes in agri-food products, based on constructs of environmental, social and economic sustainability. |
| Keywords: | agrifood chain; sustainability; willingness-to-pay |
| JEL: | D91 C21 Q18 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:917 |
| By: | Duan, Rui |
| Abstract: | Belonging to a strand of literature on women’s status during the Industrial Revolution, this project empirically investigates how parliamentary enclosure affected the English gender pay gap in agriculture in 1750-1850. Drawing data on women's and men’s pay in agriculture from credible secondary sources, it examines the causal relationship between the gender pay ratio and changes in the proportion of land enclosed. Overall, parliamentary enclosure negatively impacted the demand for female labour and thus women’s relative pay in agriculture. Women’s work in dairy and arable farming was disrupted by farmers’ preferences for grain growing and seasonal male labour force employed in large enclosed farms. The enclosure of common land also eroded an important source of women’s income. This is particularly true for arable counties in the southeast. In some places, such as counties that underwent less intense wartime enclosure and high-wage northern counties, enclosure possibly revived some demand for female labour on the newly enclosed farms and helped narrow the gender pay gap after the French Wars. Nevertheless, alternative explanations do exist, such as changes in crop combinations. These potential positive effects were too small to reverse the general downward trend of the gender pay ratio and women’s, especially wives’ increasing dependence on the male breadwinner. Meanwhile, it is worth noting that the negative effects were also small in magnitude. This suggests the main driver of a widened gender pay gap in agriculture lay in other contemporaneous socioeconomic changes. |
| JEL: | Q15 J31 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125860 |
| By: | Marivoet, Wim; Hema, Aboubacar |
| Abstract: | The objective of this analysis is to gain more insight into the coping behavior of households in Mali when facing covariate shocks and stressors of different kinds. To achieve this, we rely on a unique dataset, which consists of eleven waves of cross-sectional household data combined with an extensive list of shock indicators compiled from external sources. Apart from a detailed profiling of both dimensions, this analysis relies on a data mining algorithm to uncover interesting associations between covariate shocks and coping strategies. Among the main findings of this study is the pronounced diversity in shock and coping profiles observed across time and place, which in turn complicates any straightforward identification of common and consistent patterns in household coping behavior. This said, political violence has increased over time; food prices hiked in 2018, 2022 and 2023; rainy seasons were underperforming in 2021 and 2023; extreme weather events reached a peak in 2021; while the Gao region in 2023 suffered from all five shock domains at the same time. While fewer households resorted to coping over time, those who did combined slightly more strategies – which either points to increased inequality or generalized depletion of coping potential. Further, poor and erratic weather conditions appear to be important triggers for households to disinvest in farming and livestock activities, with food secure people being more inclined to resort to emergency coping when shocks prevail. This analysis also very much reveals the need for additional research on the same integrated and enhanced dataset. |
| Keywords: | households; shock; violence; conflicts; food prices; extreme weather events; farming systems; livestock; food security; Western Africa; Mali |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158282 |
| By: | Timothy Cheston (Center for International Development at Harvard University); Patricio Goldstein (Center for International Development at Harvard University); Timothy Freeman; Alejandro Rueda-Sanz; Ricardo Hausmann (Harvard's Growth Lab); Shreyas Gadgin Matha; Sebastian Bustos (Center for International Development at Harvard University); Eduardo Lora (Center for International Development at Harvard University); Sarah Bui; Nidhi Rao |
| Abstract: | Does economic prosperity in the Colombian Amazon require sacrificing the forest? This research compendium of a series of studies on the Colombian Amazon finds the answer to this question is no: the perceived trade-off between economic growth and forest protection is a false dichotomy. The drivers of deforestation and prosperity are distinct – as they happen in different places. Deforestation occurs at the agricultural frontier, in destroying some of the world’s most complex biodiversity by some of the least economically complex activities, particularly cattle-ranching. By contrast, the economic drivers in the Amazon are its urban areas often located far from the forest edge, including in non-forested piedmont regions. These cities offer greater economic complexity by accessing a wider range of productive capabilities in higher-income activities with little presence of those activities driving deforestation. Perhaps the most underappreciated facet of life in each of the three Amazonian regions studied, Caquetá, Guaviare, and Putumayo, is that the majority of people live in urban areas. This is a telling fact of economic geography: that even in the remote parts of the Amazon, people want to come together to live in densely populated areas. This corroborates the findings of our global research over the past two decades that prosperity results from expanding the productive capabilities available locally to diversify production to do more, and more complex, activities. |
| Keywords: | Colombia, Amazon rain forest |
| Date: | 2023–02 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:207 |
| By: | Federico Sturzenegger; Bailey Klinger; Ivan Ordonez |
| Abstract: | Combining satellite data with FAO potential yields we provide a new measure of South Africa's current and potential crop farming output. We find that field crop production is twice its census estimate, contributing 1.4% of GDP rather than 0.7%, and that achieving potential could increase its contribution a further 0.5% of GDP. Estimating horticulture potential is more difficult. We find that its 0.7% contribution to GDP is massively unreported, with actual production at 2.5%. Reaching potential could increase this number a further 0.5%. The distance from current to potential output represents over 100 billion 2017 rand of additional gross income and about 350.000 thousand jobs and is unevenly distributed across the country and concentrated in four provinces: Free State, Western Cape, Kwazulu-Natal and Eastern Cape. Our result suggests that there is room to expand agriculture, but because the potential gains are geographically concentrated, the solutions should have a strong location dimension. |
| Keywords: | South Africa, agriculture |
| Date: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:215 |
| By: | Marivoet, Wim; Hema, Aboubacar |
| Abstract: | This report describes the methodology and output behind the integration and enhancement of nationally representative household surveys on food security and coping strategies implemented in the G5 Sahel countries between 2018 and 2023. Whereas the data integration process involves the harmonization of variables across multiple cross-sectional surveys, the enhancement procedure focuses on adding shock data on multiple dimensions of political violence, food price anomalies, and climate- and weather-related events. Despite shortcomings in data quality and exhaustivity, the resulting datasets represent a unique playground to study the interaction between shocks and stressors on the one hand and household coping strategies and their impact on food security on the other hand. |
| Keywords: | climate; food security; households; violence; Burkina Faso; Chad; Mali; Mauritania; Niger; Africa; West and Central Africa; Sahel |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158183 |
| By: | Bliznashka, Lilia; Nwabuikwu, Odiche; Diatta, Ampa; Ray, Soumyajit; Iruhiriye, Elyse; Gelli, Aulo |
| Abstract: | Somalia is one of the world’s poorest countries, ranking last among 193 countries and territories on the 2023–24 Human Development Index. In 2022, 54% of the Somali population, or 15.5 million people, lived below the poverty line. Somalia suffers from extreme food insecurity: 4 million people live in crises or emergency food insecurity. Malnutrition is highly prevalent, with 15% of women and 23% of children underweight. Child stunting affects 28% of children. Overweight and obesity in women are also high at 22% and 11%, respectively. Social protection programs (SAPs) can serve as platforms to reach women and children at scale —serving not only to enhance access to food but also to improve their nutrition and health outcomes. In 2019, the Federal Government of Somalia launched an inaugural government-led national safety net program, known as Baxnaano. The program comprises nutrition-linked unconditional cash transfers, institutional capacity building, and development of a universal social registry. |
| Keywords: | poverty; food security; malnutrition; social protection; cash transfers; child health; capacity development; Sub-Saharan Africa; Eastern Africa; Somalia |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158233 |
| By: | Alejandro Rueda-Sanz; Timothy Cheston (Center for International Development at Harvard University) |
| Abstract: | Achieving economic prosperity in the Amazon rainforest is often seen as incompatible with protecting the forest. Environmental researchers rightly warn that rapid deforestation is pushing the Amazon close to a potential tipping point of forest dieback into grassy savanna. Less has been said about what is required to generate shared prosperity in Amazonian communities. Deforestation is often treated as inevitable to serve human needs, local and global. This report synthesizes the findings of two engagements by the Growth Lab at Harvard University that study the nature of economic growth in two Amazonian contexts: Loreto in Peru, and Caquetá, Guaviare, and Putumayo, in Colombia. The aim of these engagements is to leverage the Growth Lab's global research into the nature of economic growth to apply those methods to the unique challenge of developing paths to prosperity in the Amazon in ways that do not harm the forest. This report compares and contrasts the findings from the Peruvian and Colombian Amazon to assess the extent to which there are generalizable lessons on the relationship between economic growth and forest protection in the Amazon. |
| Keywords: | Colombia, Amazon, Economic Complexity, Remoteness |
| Date: | 2023–02 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:209 |
| By: | Marivoet, Wim; Hema, Aboubacar |
| Abstract: | The objective of this analysis is to gain more insight into the coping behavior of households in Chad when facing covariate shocks and stressors of different kinds. To achieve this, we rely on a unique dataset, which consists of eleven waves of cross-sectional household data combined with an extensive list of shock indicators compiled from external sources. Apart from a detailed profiling of both dimensions, this analysis relies on a data mining algorithm to uncover interesting associations between covariate shocks and coping strategies. Among the main findings of this study is the pronounced diversity in shock and coping profiles observed across time and place, which in turn complicates any straightforward identification of common and consistent patterns in household coping behavior. This said, political violence has increased until 2022 and then fell back; food prices hiked in 2022 and 2023; rainy seasons were underperforming in 2021 and 2023; extreme weather events reached a peak in 2022; while four departments in 2023 suffered from four distinct shock domains at the same time. While coping prevalence and coping intensity are roughly aligned over time, they are only weakly correlated in geographical terms in 2023. Further, the biggest change in people’s coping behavior involves keeping children from school when confronted with severe political violence coupled with severe climate change and light seasonal performance shocks – while many distinct combinations apply for different subpopulations. Finally, this analysis also very much reveals the need for additional research on the same integrated and enhanced dataset. |
| Keywords: | shock; households; violence; conflicts; food prices; extreme weather events; schools; climate change; food security; Africa; Chad |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158285 |
| By: | Whelsy Boungou (PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université); Alhonita Yatié (BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | To the question of whether global stock market indices are sensitive to climate change, the answer is "Yes". Using weekly data from the stock market returns of 97 countries over the period from 31 August 2020 to 18 April 2022, we document a significant negative impact of climate change on the performance of global stock indices. |
| Keywords: | Climate change, Stocks, Google |
| Date: | 2022–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04745793 |
| By: | Hambur Wang |
| Abstract: | This study investigates the impact of industrial agglomeration on land use intensification in the Yangtze River Delta (YRD) urban agglomeration. Utilizing spatial econometric models, we conduct an empirical analysis of the clustering phenomena in manufacturing and producer services. By employing the Location Quotient (LQ) and the Relative Diversification Index (RDI), we assess the degree of industrial specialization and diversification in the YRD. Additionally, Global Moran's I and Local Moran's I scatter plots are used to reveal the spatial distribution characteristics of land use intensification. Our findings indicate that industrial agglomeration has complex effects on land use intensification, showing positive, negative, and inverted U-shaped impacts. These synergistic effects exhibit significant regional variations across the YRD. The study provides both theoretical foundations and empirical support for the formulation of land management and industrial development policies. In conclusion, we propose policy recommendations aimed at optimizing industrial structures and enhancing land use efficiency to foster sustainable development in the YRD region. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.19304 |
| By: | Mekonnen, Dawit Kelemework; Yimam, Seid; Arega, Tiruwork; Alemu, Tekie; Gonfa, Kidist H.; Ringler, Claudia |
| Abstract: | Using a representative sample of irrigation schemes, the study documents the physical, knowledge, and governance infrastructures of irrigation schemes in Ethiopia’s most intensively used river basin, the Awash. The findings show that about 20 percent of the equipped area of irrigation schemes in the basin is not being irrigated, while the number of actual beneficiaries on average exceeds the number of planned beneficiaries. The results also show significant knowledge gaps among irrigation scheme managers, extension agents, and leaders of water users’ associations (WUAs): 96 percent of them do not know the total water withdrawals or the irrigation water requirement per season. About 14 percent of the surveyed irrigation schemes have neither traditional water committees nor WUAs, and only 21 percent are organized in legally registered WUAs despite a substantial number of identified benefits of these organizations. Moreover, only 58 out of 489 irrigation schemes have women committee members. Many schemes lack a clear strategy for covering maintenance costs: almost 40 percent of schemes collect contributions from members only when the system fails, while 17 percent report no contributions for maintenance at all suggesting considerable risk of system deterioration and failure. The results challenge some of the assumptions about irrigation infrastructure in Ethiopia and confirm and quantify other assumptions in the literature. |
| Keywords: | irrigation schemes; infrastructure; Awash River; river basins; advisory officers; water user associations; women; Ethiopia; Africa |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2287 |
| By: | Loukas Balafoutas; Esther Blanco; Raphael Epperson |
| Abstract: | Technological progress offers new and promising ways to provide targeted information to consumers and facilitate behavioral change. We conduct a randomized controlled trial with a global supermarket chain and food producer to evaluate the effectiveness of a targeted information intervention that offers consumers individualized feedback about the sustainability of purchased products and close substitutes. We find that the majority of consumers access the information, independently of whether they have bought sustainable or unsustainable products in the past. Yet, providing the targeted information has no significant impact on consumption choices, which is neither driven by inattention to information nor price differentials. |
| Keywords: | Information provision, pro-environmental behavior, sustainability, label credence goods, randomized controlled trial |
| JEL: | D12 D82 Q53 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:inn:wpaper:2024-10 |
| By: | Hidrobo, Melissa; Mueller, Valerie; Bryan, Elizabeth; Nesbitt-Ahmed, Zahrah; Laderach, Peter; Roy, Shalini |
| Abstract: | Climate change is destabilizing agrifood systems globally, disproportionately afflicting rural populations in low- and middle-income countries (LMICs) and leading to escalating food insecurity and disrupted livelihoods. Alongside mitigation efforts, large-scale measures are needed to support climate-vulnerable people. Social assistance (SA) programs – such as cash transfers, in-kind transfers, public works, food assistance for assets programs, and school feeding – are increasingly recognized as promising scalable approaches. Moreover, if properly designed, these programs have the potential to address the disproportionate climate risks that women and girls (WGs) face. WGs have important roles in making agrifood systems more climate-resilient, given that they represent almost 40 percent of the workforce (50 percent in sub-Saharan Africa) (FAO, 2023) and have gender-differentiated roles and knowledge. Yet they are more limited in their opportunities to adapt to climate change, due to systemic inequalities in their access to resources, technologies, information, services, and networks, and due to restrictive social norms. |
| Keywords: | cash transfers; climate resilience; school feeding; women |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:158271 |
| By: | Farzana MUNSHI (Brac University, Dhaka, Bangladesh); Ahsan SENAN (Brac University, Dhaka, Banglades); K.M. Arefin KAMAL (Brac University, Dhaka, Banglades) |
| Abstract: | Agriculture and cottage, micro, small, and medium-sized enterprises (CMSMEs) – the two critically important sectors for pro-poor and inclusive growth in Bangladesh – were severely affected by the coronavirus disease (COVID-19) pandemic and the subsequent lockdowns. Supply chains were interrupted, jobs were lost, and businesses were closed. This study identifies the major challenges faced by these two sectors and develops intervention strategies to promote them in the post-pandemic period. This is done through an extensive review of relevant literature, discussions with sector experts, and a survey. Based on the research findings, we recommend some policy interventions, such as greater digitisation and the development of uninterrupted cold-chain infrastructure across the country. We also recommend more supportive policies to scale up start-ups that offer solutions to at least one of the major challenges faced by these two sectors. |
| Keywords: | Agriculture, SMEs, start-ups, Bangladesh, COVID-19 |
| JEL: | Q10 L10 M13 R11 I1 |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-20 |
| By: | Iselin, John; McCulloch, Sean; Ryan, Erica |
| Abstract: | Liu et al. (2023) examines the effect of climate change on labor allocation in India over a long time span. The authors find that rising temperatures are correlated with lower shares of workers in non agricultural sectors. They also identify a likely mechanism: falling agricultural productivity leads to a reduction in demand for non-agricultural goods or services, leading to a reduction in labor demand in non-agricultural sectors. We undertake a reproduction and extension of Liu et al. (2023), and find that we are able to computationally reproduce all the numbers produced by the authors up to marginal differences in the calculation of standard errors. We describe a set of data issues that hindered full reproduction of the original dataset, and, in one case, contradicts a claim of data availability made by the authors. Finally, we test the robustness of the main results to a more consistent use of fixed effects and the use of Poisson regression, following Chen and Roth (2024). The Poisson regression approach does not alter the results, but in several of the new fixed effects specifications the author's original results are less conclusive and lose statistical significance. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:180 |
| By: | Luis Antonio Sáez (Department of Applied Economics, Universidad de Zaragoza); Vicente Pinilla (Department of Applied Economics, Universidad de Zaragoza and Instituto Agroalimentario de Aragón (Universidad de Zaragoza-CITA)) |
| Abstract: | This study explores how the existing duality between ends and means, prevalent in both political and academic frameworks, can be overcome. Focusing on the case of Spain, the study analyzes how depopulation policies define their objectives and the extent to which they adhere to a demographically incrementalist paradigm. Finally, conclusions are drawn regarding the formulation of strategies to invigorate rural areas experiencing population decline. The aim is to ensure that these objectives are the product of a balanced debate on both ends and means, thereby contributing to the development of individuals and the rural communities in which they reside. |
| Keywords: | : depopulation, depopulation policies, rural development, shrinking regions |
| JEL: | H50 H70 J18 N44 O20 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:zar:wpaper:dt2024-02 |
| By: | Alexander M. Danzer; Helen Zeidler |
| Abstract: | This paper investigates time inconsistencies in food consumption based on a field experiment at a college canteen where participants repeatedly select and con- sume lunch menus. The design features a convex non-monetary budget in a natu- ral environment and satisfies the consume-on-receipt assumption. Leveraging 3, 666 choices of different food healthiness, we find no time inconsistency at the meal level. Utility weight estimates at the dish level reveal that consumers balance healthiness between food categories. Individuals who exert self-control take up a commitment device as soon as available, while non-committers are present-biased. Dynamic inconsistencies in food and money choices are independent. |
| Keywords: | Field Experiment, Dynamic Inconsistency, Commitment, Food Consumption |
| JEL: | D12 D01 C93 D91 I12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:239_danzer_zeidler.rdf |
| By: | Dong, Kangyin (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China); Yang, Senmiao (International Business Strategy Institute, University of International Business and Economics, Beijing 100029, China); Wang, Jianda (Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong, China); Nepal, Rabindra (School of Business, Faculty of Business and Law, University of Wollongong, Australia); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | This paper studies 41 countries from 1995 to 2021 and uses the European Green Deal (EGD) as an example to explore the impact of policy intervention on the relationship between geopolitical risk and climate vulnerability. The main findings show that: (1) Geopolitical risk can exacerbate climate vulnerability, primarily manifested in negative impacts on food, water, health, and ecosystems. (2) Green transition and green investment can mitigate the adverse impact of geopolitical risk on climate vulnerability. (3) The positive effect of the EGD on the green transition and green investment can further mitigate climate vulnerability caused by geopolitical conflicts. This study provides practical approaches and references for policymakers to reduce the impact of geopolitical conflicts and enhance climate resilience. |
| Keywords: | The European Green Deal; Geopolitical risk; Climate vulnerability; Green transition; Green investment |
| JEL: | C33 O19 Q54 Q56 |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_015 |
| By: | Mukashov, Askar; Robinson, Sherman; Thurlow, James; Arndt, Channing; Thomas, Timothy S. |
| Abstract: | This paper uses machine learning, simulation, and data mining methods to develop Systematic Risk Profiles of three developing economies: Kenya, Rwanda, and Malawi. We focus on three exogenous shocks with implications for economic performance: world market prices, capital flows, and climate-driven sectoral productivity. In these and other developing countries, recent decades have been characterized by increased risks associated with all these factors, and there is a demand for instruments that can help to disentangle them. For each country, we utilize historical data to develop multi-variate distributions of shocks. We then sample from these distributions to obtain a series of shock vectors, which we label economic uncertainty scenarios. These scenarios are then entered into economywide computable general equilibrium (CGE) simulation models for the three countries, which allow us to quantify the impact of increased uncertainty on major economic indicators. Finally, we utilize importance metrics from the random forest machine learning algorithm and relative importance metrics from multiple linear regression models to quantify the importance of country-specific risk factors for country performance. We find that Malawi and Rwanda are more vulnerable to sectoral productivity shocks, and Kenya is more exposed to external risks. These findings suggest that a country’s level of development and integration into the global economy are key driving forces defining their risk profiles. The methodology of Systematic Risk Profiling can be applied to many other countries, delineating country-specific risks and vulnerabilities. |
| Keywords: | climate; computable general equilibrium models; machine learning; risk; uncertainty; Africa; Eastern Africa; Sub-Saharan Africa; Kenya; Rwanda; Malawi |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2286 |
| By: | Hoffmann, Bridget; Dueñas, Juliana; Goytia, Alejandra |
| Abstract: | Climate change is projected to increase the frequency and intensity of extremely hot days. We use a panel regression framework at the sub-national (i.e., region) level to identify the effect of extreme heat on economic growth in Latin America accounting for acclimation to the season and to the local climate. Extreme heat has a negative and significant impact on economic growth, and the magnitude of the impact is increasing in the intensity and duration of heat. Our results suggest that the impact of each additional consecutive day of extreme heat is greater than the impact of the prior day. Extreme heat affects economic growth directly in addition to its indirect effect through higher seasonal mean temperatures and extreme heat could account for 34-68% of the total projected reduction in the annual economic growth rate at midcentury due to temperature change. Our results suggest that extreme heat is one potential channel for the documented non-linearity in the impacts of rising mean temperature. |
| Keywords: | extreme heat;heat waves;economic growth |
| JEL: | Q5 Q54 Q51 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13810 |
| By: | Bonciani, Dario (Sapienza University of Rome); M Masolo, Riccardo (Universitá Cattolica del Sacro Cuore, Milano); Sarpietro, Silvia (University of Bologna) |
| Abstract: | Food price changes have a strong and persistent impact on UK consumers’ inflation expectations. Over 60% of households report that their inflation perceptions are heavily influenced by food prices and display a stronger association between their inflation expectations and perceptions. We complement this finding with a Structural Vector Autoregression (SVAR) analysis, illustrating that food price shocks have a larger and more persistent effect on expectations compared to a ‘representative’ inflation shock. Finally, we augment the canonical New-Keynesian model with behavioural expectations that capture our empirical findings and show that monetary policy should respond more aggressively to food price shocks. |
| Keywords: | Inflation expectations; inflation perceptions; monetary policy |
| JEL: | D10 D84 E31 E52 E58 E61 |
| Date: | 2024–10–11 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:1094 |
| By: | Tajmazinani, Ali Akbar |
| Abstract: | While there is increasing consensus in the academic debate on the regressive nature of energy subsidies and the necessity to reduce them, this is much less so for food subsidy reforms - not least because of the positive impact of food subsidies for food security. They make food affordable even for lower-income households, and therefore they are often important for the well-being of this group. In addition, food subsidy reforms can be designed in different ways and have quite different effects. Badly designed programmes may cause more harm than good. Many countries in the world, including in the MENA region, struggle thus with the question of whether, and under which conditions, it is recommendable to reduce food subsidies. This discussion paper examines the most recent experience of food subsidy reform in Iran in order to derive some lessons for food subsidy reforms elsewhere. Iran has a long history of providing general commodity subsidies, including for energy and food items, and it has attempted several waves of subsidy reforms in the past three decades, most notably in 2010 (energy and bread) and 2019 (petrol), whereby it established a nationwide direct cash transfer system. However, given the political and economic circumstances, subsequent administrations have returned to different kinds of consumer subsidies, which have required further reforms. The most recent form of food subsidy was the preferential foreign exchange rate (PFER) policy, which allocated about US$100 billion of the government's foreign exchange reserves with a fixed rate (far below the market rate) - during the four years following the unilateral withdrawal of United States from the Iran nuclear deal in 2018 - to import food and other basic commodities. Finally, the Raisi administration abolished the PFER policy in May 2022 and started to redistribute what it saved from the consumer subsidy cuts through the Just Distribution of Subsidies Scheme (JDSS), which is actually a targeted direct cash transfer scheme. The main question of this discussion paper is: Under which conditions is a reduction or full elimination of food subsidies recommendable, given the experiences of Iran with its most recent reform (the replacement of consumer subsidies by targeted direct cash transfers paid out by the JDSS), and what challenges might such a reform entail? A secondary analysis of national data on "household expenditures" and "price index" is used to calculate future changes in household living expenditures in the short and medium terms, and to determine winners and losers of the new policy. Moreover, a thematic analysis of published contents (interviews, columns, articles and public speeches) about the scheme from key experts - before and after the launch of the scheme - is used to map out various aspects of the successes and failures of the scheme. Our findings indicate that the way food subsidy reforms are designed and at what moment they are implemented matter a lot with regard to their effects. In the Iranian case, several factors could undermine the success of the recent food subsidy reform. First, ignoring the framework conditions of reform - including both international and domestic factors (such as economic instability, diminishing vertical trust, a lack of smooth foreign relations, budget deficit and low standards of good governance) - can jeopardise the reform or nullify its effects. Second, the lack of an "indexation element" (for the level of cash transfers) in an environment of continually increasing inflation and currency devaluation lead to a rapid decline in the purchasing power of cash transfers. Third, implementation shortcomings, such as targeting errors (due to weaknesses of the Iranians' Welfare Database), delivery deviations and a lack of transparency, lead to serious levels of mistrust. Ultimately, all of the above-mentioned challenges in the design and implementation of the scheme seem to hamper its objectives with regard to food security, poverty reduction, promotion of income equality and the abolition of corruption. As a consequence we recommend that policy-makers (i) bear in mind the effect of national and international framework conditions (such as uneven international relations, economic situation, high inflation, diminishing vertical trust and chronic budget deficits) on the possible success of the reform; (ii) consider prioritising other, more urgent economic reforms (such as reforming the budgeting, banking and taxation systems) instead of reforming food subsides, which may be vital for the food security of the lowest income groups of the population; (iii) set an "indexation element" in the scheme and raise the cash amount and/or provide a fixed package of food items in a timely manner; (iv) control for possible targeting errors in the compensation element of the food subsidy reform before launching the scheme and during its implementation; and (v) make sure that any scheme that is meant to compensate for the subsidy cuts, such as a direct cash transfer scheme, is well-embedded in the overall social protection system of the country. |
| Keywords: | Subsidy reform, food subsidy, cash transfer, redistribution, inflation, Iran |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:305247 |