Agricultural growth, poverty, and nutrition in Tanzania:

Rapid economic growth has failed to significantly improve poverty and nutrition outcomes in Tanzania. This raises concerns over a decoupling of growth, poverty, and nutrition. We link recent production trends to household incomes using a regionalized, dynamic computable general equilibrium and microsimulation model. Results indicate that the structure of economic growth—not the level—is currently constraining the rate of poverty reduction in Tanzania. Most importantly, agricultural growth trends have been driven by larger-scale farmers and by crops grown in only a few regions of the country. The slow expansion of food crops and livestock also explains the weak relationship between agricultural growth and nutrition outcomes. Additional model simulations find that accelerating agricultural growth, particularly in maize, greatly strengthens the growth–poverty relationship and enhances households' caloric availability. We conclude that low productivity, market constraints (including downstream agroprocessing), and barriers to import substitution for major food crops are among the more binding constraints to reducing poverty and improving nutrition in Tanzania.economic growth, Poverty, Nutrition, household incomes, Computable general equilibrium (CGE) modeling, Agricultural growth, Microsimulation model, livestock, Food crops, low productivity, market constraints, Development strategies,

Biofuels and economic development in Tanzania

Biofuels provide a new opportunity to enhance economic development in Tanzania. Drawing on detailed cost estimates, we develop a dynamic computable general equilibrium model to estimate the impact of different biofuel production scenarios on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of a biofuels industry in Tanzania requires engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Our findings also indicate that cassava generates higher levels of pro-poor growth than do sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then sugarcane and cassava outgrower schemes can produce similar pro-poor outcomes. We conclude that in so far as the public investments needed to establish a biofuels industry in Tanzania are in accordance with national development plans, producing biofuels will contribute to achieving the country�s overall development objectives.Biofuels, Cassava, Computable general equilibrium (CGE) model, Growth, Poverty,

Wage Subsidies to Combat Unemployment and Poverty: Assessing South Africa’s Options

Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this country’s massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africa’s particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economy’s employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth.

Wage subsidies to combat unemployment and poverty

Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this country�s massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africa�s particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economy�s employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth.Computable General Equilibrium (CGE) microsimulation modeling, Developing countries, economic growth, employment absorption capacity, labor costs, macro-micro analysis, Unemployment, wage subsidies,

Droughts and floods in Malawi

Malawi suffers frequent droughts and floods. In an economy that is heavily dependent on the agricultural sector, it is crucial to understand the implications of these extreme climate events. Not only are rural livelihoods affected due to the severe impacts on the agricultural sector, but nonfarm and urban households are also vulnerable given the strong production and price linkages between agriculture and the rest of the economy. This study uses a general equilibrium model to estimate the economywide impacts of drought- and flood-related crop production losses. Climate simulations are based on production loss estimates from stochastic drought and flood models. Model results show that the economic losses due to extreme climate events are significant: Malawi loses 1.7 percent of its gross domestic product on average every year due to the combined effects of droughts and floods. This is equivalent to almost US$22 million in 2005 prices. Given their crop choices, it is smaller-scale farmers and those in the flood-prone southern regions of the country who are worst affected. However, urban and nonfarm households are not spared. Food shortages lead to sharp price increases that reduce urban households� disposable incomes. This study makes an important contribution by estimating the economywide impacts of extreme climate events. However, this is only the first step toward designing appropriate agricultural and development strategies that explicitly account for climate uncertainty.agricultural sector, CGE Modeling, Droughts, floods, Gross Domestic Product (GDP), households, Livelihoods, Poverty,

Prioritizing rural investments in Africa: A hybrid evaluation approach applied to Uganda

Prioritizing public investments requires information on relative returns that are difficult to derive from disparate evaluation studies. This paper presents a 'hybrid' approach that combines ex post evaluation data with an economy-wide model for experimenting ex ante with alternative investment portfolios within a consistent, structural framework. The approach is used to evaluate rural investments in Uganda. Agricultural research and extension services are found to be much more effective at promoting economic growth and poverty reduction than either rural feeder roads or irrigation infrastructure. This suggests that the government's recent shift in emphasis from extension services to irrigation is potentially misguided

Methods matter: The sensitivity of Malawian poverty estimates to definitions, data, and assumptions

This paper decomposes differences between the official poverty estimates of Malawi and a set of revised estimates by Pauw et al. (2016, forthcoming) with respect to five methodological differences: (i) the use of a revised set of unit conversion factors; (ii) the specification and use of regional poverty lines as opposed to a single national poverty line; (iii) the use of implicit survey-based prices rather than external price data; (iv) estimation of food separate poverty lines in the two surveys; and (v) permitting a change in the food/non-food composition of the consumption basket over time. Our results suggest that the decline in national poverty varies between 3.4 and 8.4 percentage points, compared to the official estimate of a decline of 1.8 percentage points

Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options

With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be two billion barrels, with recoverable reserves estimated at 0.8–1.2 billion barrels. At peak production, likely to be reached by 2017, oil output will range from 120,000 to 210,000 barrels per day, with a production period spanning up to 30 years. Depending on the exact production levels, the extraction period, the future oil price, and revenue sharing agreements with oil producers, the Ugandan government is set to earn revenue equal to 10–15 percent of GDP at peak production. The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and address its development objectives. However, this is subject to careful management of oil revenues to avoid the potential pitfall of a sudden influx of foreign exchange. Dominating the concerns is the potential appreciation in the real exchange rate and subsequent loss of competitiveness in the nonresource tradable goods sectors such as agriculture or manufacturing (Dutch Disease). These sectors are often major employers in developing countries and the engines of growth. Several mitigation measures can be employed by government to counter Dutch Disease, including measures that directly counter the real exchange rate appreciation or measures that offer direct support to traditional export sectors in the form of subsidies.crude oil, agricultural competitiveness, general equilibrium modeling,

Labour market policy and poverty : exploring the macro-micro linkages of minimum wages and wage subsidies

Includes abstract.Includes bibliographical references (p. 220-228).This study adds value to the South African literature on labour market policy evaluation and their poverty impacts in general, and minimum wages and wage subsidies in particular, both in terms of the theoretical and descriptive analyses provided. Various possible modelling approaches are explored, with careful consideration of the advantages and limitations of each. A rich set of model results is also generated. Under both the policies evaluated, the poverty outcome is shown to generally be positive but small. Furthermore, the outcome is highly sensitive to the wage elasticity of demand: while minimum wages tend to be more effective in reducing poverty when the wage elasticity is low, wage subsidies generate superior outcomes under a high wage elasticity scenario

COVID-19 impacts on food systems, poverty, and diets: Lessons learned from country-level analyses

In COVID-19 and global food security: Two years later, eds. John McDermott and Johan Swinnen. Part One: Food Security & Poverty, Chapter 2, Pp. 22-29With the outbreak of COVID-19, governments attempted to contain the spread of the virus by limiting the movement and interaction of people through a variety of measures, including restrictions on domestic and international travel, social distancing, and “lockdowns” that temporarily shut down non-essential businesses (IFPRI 2020). While governments had control over these domestic measures, they could do little to shield economies from disruptions to global trade or declines in foreign investment and tourism. Amid uncertainty about how the pandemic would unfold, IFPRI worked with local partners during 2020 to develop economywide models to analyze the impacts of COVID-19 measures on economic growth, food systems, and livelihoods in approximately 30 countries (Pauw, Smart, and Thurlow 2021). Initially, social accounting matrix (SAM) multiplier models were used to trace quarterly and annual shocks during the 2020 calendar year. The real-time analysis provided by these results could potentially be used by policymakers to inform the design of COVID-19 restrictions (for example, in terms of sector targeting or duration) and remedial measures (such as targeted cash transfers or firm subsidies)