Agricultural growth linkages in Sub-Saharan Africa:

How much extra net income growth can be had in rural areas of Africa by increasing the spending power of local households? The answer depends on how rural households spend increments to income, whether the items desired can be imported to the local area in response to increased demand, and, if not, whether increased demand will lead to new local production or simply to price rises. For every dollar in new farm income earned, at least one additional dollar could be realized from growth multipliers, according to Agricultural Growth Linkages in Sub-Saharan Africa.Income Rural areas Africa., Agricultural development Africa., Agricultural policy Economic aspects., Households Zimbabwe., Social accounting., Africa sub-Saharan,

FORWARD CONTRACTS AND CROP INSURANCE: SHOULD PREMIUMS BE ADJUSTED FOR RISK MANAGEMENT PRACTICE?

Current premium rate-making methodology for the government-sponsored Multiple Peril Crop Insurance (MPCI) program adjusts premiums for farms engaging in certain cropping practices. These practices are production methods such as irrigation, fallow and double-cropping. Actuarial evidence has shown that such practices can separate farms into distinct risk classes. We suggest that risk-management tool is another category of practice which could be considered in setting premium rates. The present analysis shall focus on one risk management tool: cash forward contracts. Making this assessment requires that we use a key actuarial concept called loss cost ratio. Preliminary evidence (from sam ple moments of yield distributions) suggests that indeed the loss cost ratio may be lower in the presence of forward contracts when corn, wheat and soybeans are the insured crops

FORWARD CONTRACTS AND CROP INSURANCE: SHOULD PREMIUMS BE ADJUSTED FOR RISK MANAGEMENT PRACTICE?

Current premium rate-making methodology for the government-sponsored Multiple Peril Crop Insurance (MPCI) program adjusts premiums for farms engaging in certain cropping practices. These practices are production methods such as irrigation, fallow and double-cropping. Actuarial evidence has shown that such practices can separate farms into distinct risk classes. We suggest that risk-management tool is another category of practice which could be considered in setting premium rates. The present analysis shall focus on one risk management tool: cash forward contracts. Making this assessment requires that we use a key actuarial concept called loss cost ratio. Preliminary evidence (from sam ple moments of yield distributions) suggests that indeed the loss cost ratio may be lower in the presence of forward contracts when corn, wheat and soybeans are the insured crops.Risk and Uncertainty,

Foodgrain market integration under market reforms in Egypt

Using urban price data for the period 1976 to 1992 and rural price data for the period 1982 to 1992, the study assesses the degree of market integration for wheat, maize and rice. The study finds that i) reforms have not destabilized foodgrain prices; ii) there is some indication that the degree of segmentation among food grain markets has decreased during the reform period, especially for rural wheat and maize markets; iii) urban markets exhibit a much higher degree of market segmentation, particularly for wheat; and iv) the extent of market integration in terms of the magnitude of market interdependence and speed of price transmission was until 1992 very limited. Urban markets seemed to have a lower magnitude of integration than those of rural areas and the speed of adjustment was higher among these markets, reflecting the better communication and infrastructure network in urban areas.Markets Prices Egypt. ,Grain Marketing. ,

Agricultural Growth Linkages in Sub-Saharan Africa

The wide spread increase in rural purchasing power under the Green Revolution in Asia during the 1970s was key to increased rural employment and industrialization. Studies suggested that an extra dollar of agricultural income was typically associated with an additional $0.80 of nonagricultural income from local enterprises stimulated by the spending of farm house holds. Studies in Africa, where the Green Revolution was harder to discern, tended to be much more pessimistic. This report revisits these issues using especially detailed panel data sets on rural consumption and incomes, collected by IFPRI and collaborating national institutions for a variety of purposes during the mid to late 1980s in Burkina Faso, Niger, Senegal, Zambia, and Zimbabwe. Results suggest that house hold spending of higher rural incomes from increased exports has the potential to greatly stimulate further rural income increases, on a scale that even surpasses experience in Asia. Central to this is the claim that many of the goods and services that figure heavily in rural consumption patterns in Sub-Saharan Africa are nontradables at current transport costs and prices. These include perishable fruits, vegetables, animal products, and prepared foods, services of all kinds, local handicrafts, and some bulky local starches of too low value to bear the costs of importing or exporting. By focusing on the nontradable nature of large sectors of African rural economies, the report evokes a theme central to many of IFPRI’s fieldwork-based studies: why some development strategies are more effective at achieving both growth and poverty Alleviation than others. Sustained growth in rural incomes that is widely spread across households is shown to be an effective way to furnish the sustained additional local purchasing power necessary to promote aggregate production of non tradable items, while increasing the incomes of large numbers of poor people. The report does not deal with the interventions necessary to start growth in rural areas, other than to illustrate that it must involve bringing new external funds into localities on a recurring basis, such as would be the case from expansion of agricultural exports. The report thus also raises another major theme of IFPRI’s work, the complex role of agricultural and food policy in over all economic development. Jump-starting the production of agricultural tradable is shown to have much higher returns than thought previously, because of growth link ages. Conversely, rising food staple prices are shown to have the potential to choke off growth from demand-side link ages if the conditions for a high supply response to prices are not in place. Success in raising household incomes in rural areas will rapidly lead to greatly increased demand for wage goods such as food, many of which are nontradable in rural Africa. If increased local production is not forth coming, the relative price of these items will rise rapidly, reducing the welfare of large numbers of poor people and eventually raising production costs for the agricultural tradable that provide the engine of growth

Agricultural Growth Linkages in Sub-Saharan Africa

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