Creating more inclusive and integrated safety net programs for the poor in Ethiopia

Poster prepared for a share fair, Addis Ababa, May 201

The food retail revolution in poor countries: Is it coming or is it over? Evidence from Madagascar

"Global retail chains are becoming increasingly dominant in the global food trade and their rise leads to dramatic impacts on agricultural supply chains and on small producers. However, the prospects and impacts of a food retail revolution in poor countries are not yet well understood. Here, we examine this question in Madagascar, a poor but stable country where global retailers have been present for over a decade. Our survey and analysis finds that while global retail chains sell better quality food, their prices are 40 to 90% higher, ceteris paribus, than those seen in traditional retail markets. In poor settings, characterized by high food price elasticities, a lack of willingness to pay for quality, and small retail margins, supermarkets appear to set prices with an eye toward maximizing profits based on price-inelastic demands for quality products from a small middle class interested in one-stop shopping. It seems unlikely that global retail chains will further increase their food retail share in such poor settings." from Authors' AbstractFood retail, Supermarkets, Food quality, Poor Developing countries,

Infrastructure, market access, and agricultural prices

The effect of recent agricultural market reforms in many developing countries is often measured through tests for market integration by analyzing co-variation of food prices. However, market integration studies often fail to link the discovery of the lack of integration to causal factors. This analysis documents and relates price variation to structural determinants in the case of Madagascar. The spatial variability between communities is linked to the distance to a paved road, the quality of the road, access to soft infrastructure, and the level of competition between traders. Differences in seasonal variation are mainly related to the differential opportunity costs of capital in rice villages and to hard infrastructure in non-rice villages. Communities that lack basic infrastructure show lower prices during the harvest season and higher seasonal gaps. Moreover, it is shown that road distance matters more than road quality during the harvest period as there is no strong relationship between road quality and the producer price decline per unit of time. While the presence of roads shows up in relatively higher producer prices, it does not automatically lead to more competition among traders. Hence, investment in hard infrastructure is not sufficient to successfully increase market access. However, soft infrastructure on top of hard infrastructure seems beneficial for increased producer prices, reduced price variability, and improved market integration.Markets Prices. ,Price regulation. ,Infrastructure (Economics) ,

Public Service Provision, User Fees, and Political Turmoil

Following an electoral dispute, the central highlands of the island of Madagascar were subjected to an economic blockade during the Þrst half of 2002. After the blockade ended in June 2002, user fees for health services and school fees were progressively eliminated. This paper examines the provision of schooling and health services to rural areas of Madagascar before, during, and after the blockade. We Þnd that public services were more resilient to the blockade than initially anticipated, but that health services were more affected than schools. The removal of user fees had a large signiÞcant effect on public services that is distinct from the end of the blockade and the increase in school book provision.

THEFT AND RURAL POVERTY: RESULTS OF A NATURAL EXPERIMENT

This paper investigates the relationship between theft and poverty in rural areas. Following a disputed presidential election, fuel supply to the highlands of Madagascar was severely curtailed in early 2002, resulting in a massive -- if temporary -- increase in poverty. This situation constituted a natural experiment of the effect of poverty on theft. Using original survey data collected in June 2002 at the height of the crisis, we find that crop theft increases with poverty and that an increase in law enforcement personnel reduces cattle theft, a form of organized crime. Results suggest that theft is used by some of the rural poor as a risk coping strategy. Increased transport costs led to a rise in cattle and crop theft, suggesting that isolation raises crime.Food Security and Poverty,

Relationships and traders in Madagascar

This paper documents the role that personal relationships play in economic exchange. Original survey data show that agricultural traders in Madagascar perceive relationships as the most important factor for success in their business.Evidence details the extent to which relationships are used to serve a variety of purposes such as: the circulation of information about prices and market conditions; the provision of trade credit; the prevention and handling of contractual difficulties; the regularity of trade flows; and the mitigation of risk. Of these, the regularity of supply and demand and the sharing of risk appear particularly important. Larger and more pros-perous traders are those with quantitatively and qualitatively better relationships. Family plays little role in business beyond assistance at start-up.Agricultural trade ,Madagascar ,Credit Madagascar ,

Property rights in a flea market economy

This paper studies liberalized grain markets in Madagascar and examines how property rights are protected and contracts are enforced among agricultural traders. We find that the incidence of theft and breach of contract is low and that the losses resulting from such instances are small. This, however, does not result from reliance on legal institutions actual recourse to police and courts is fairly rare, except in cases of theft but from traders' reluctance to expose themselves to opportunism. As a result, Malagasy grain trade resembles a flea market, with little or no forward contracting and high transactions costs. The dominant contract enforcement mechanism is trust-based relationships. Trust is established primarily through repeated interaction with little role for referral by other traders. Information on bad clients does not circulate widely, hence severely limiting group punishments for non payment.Property rights. ,Grain trade. ,

The quiet revolution in India's food supply chains:

There has been a rapid transformation of food supply chains in India over the past two decades. Modern retail sales are growing at 49 percent per year and quickly penetrating urban food markets and even rural markets. The food-processing sector is growing quickly while also concentrating and undergoing a rapid increase in the capital-output ratio, with little increase in employment. A modern segment is emerging in the wholesale sector, with the penetration of modern logistics firms and specialized modern wholesalers.wholesale markets, Supply chains, Farmers, Supermarkets, Food processing, logistics, cold chain, Food markets,

Crime and Poverty: Evidence From a Natural Experiment

This paper investigates the relationship between poverty and crime. Following a disputed presidential election, fuel supply to the highlands of Madagascar was severely curtailed in early 2002, resulting in a massive if temporary increase in poverty. Using original survey data collected in June 2002 at the height f the crisis, we find that crime increase with poverty. Our most conclusive results are for crop theft. We also find that an increase in law enforcement personnel reduces cattle theft which, in Madagascar, is a form of organised crime. Theft appears to be used by some of the rural poor as a risk coping strategy. Increased transport costs led to a rise in a cattle and crop theft, suggesting that isolation raises crime.