STOCHASTIC FOOD PRICES AND SLASH-AND-BURN AGRICULTURE

Demand and Price Analysis, Farm Management,

U.S. Food Aid: It’s Not Your Parents’ Program Any More!

Much has changed in the 50 years since modern food aid began with the enactment of U.S. Public Law 480 in 1954. Yet contemporary policy debates often become derailed by failures to appreciate the significant changes that have already occurred. This paper identifies the most important of these changes and explains how these set the stage for further desirable changes to U.S. food aid programs.food security, humanitarian assistance, hunger, poverty, safety nets, surplus disposal, trade promotion, Agricultural and Food Policy, Food Security and Poverty, International Relations/Trade,

MARKETS, SOCIAL NORMS, AND GOVERNMENTS IN THE SERVICE OF ENVIRONMENTALLY SUSTAINABLE ECONOMIC DEVELOPMENT

Environmental Economics and Policy, International Development,

FOOD AID AND COMMERCIAL INTERNATIONAL FOOD TRADE

1. This paper was commissioned by the Trade and Markets Division of the Organisation for Economic Co-operation and Development (OECD) to address the relationship between food aid and commercial international food trade as background to an anticipated OECD study on the export competition aspects of food aid. The terms of reference for this study call for "a critical review of the existing literature on the potential use of food aid as an export support policy or, alternatively, the potential that food aid bears implications similar to those of export supporting policies." 2. This paper can be summarized as follows. Food aid has multiple objectives, modalities and effects and there has been significant movement over time in each of these areas. Concerns about the use of food aid as an export support policy are founded in both the history of bilateral food aid, in the political economy of food aid support in major donor countries, and in some current uses. The effects of food aid on commercial international food trade turn on several key factors, chief among which is its targeting, of which timing of deliveries is an important subfactor. Due to inevitably imperfect targeting at both macro and micro levels, food aid clearly displaces commercial sales of food contemporaneously in recipient economies. The evidence is unclear as to the distribution of these short-term losses across domestic and foreign suppliers in recipient countries, but the evidence somewhat favors the conclusion that most of the displacement comes out of commercial imports. Whether this displacement adversely effects international food markets depends on the manner in which the food aid is obtained, how well integrated the recipient economy market is with the global market, and recipient demand for variety. The longer-term effects of food aid turn on the dynamic income effects of food aid receipt and the extent to which these stimulate future food demand. The crucial questions then are how the short-term losses due to contemporaneous displacement of commercial imports, the global market effects of alternative food aid procurement modalities, and the long-term gains from any derivative income stimulus balance out over time and how these costs and benefits are distributed among donors and third party exporters. Research on these topics has been surprisingly scarce and, largely as a consequence, premature conclusions are too often drawn on the basis of quite limited evidence on the contemporaneous displacement effects of food aid on recipient country markets. Finally, because food aid's effects on trade stem directly from the efficacy of targeting, policymakers exploring the effects of food aid on commercial international food trade must consider explicitly the trade-off between higher expected displacement of commercial trade and higher expected targeting errors of exclusion of intended beneficiaries through restrictive distribution rules.International Relations/Trade, O1, Q17, F1, Q18,

DOES FOOD AID STABILIZE FOOD AVAILABILITY?

This paper explores the empirical relationship between U.S. food aid flows per capita and nonconcessional food availability per capita in PL 480 recipient economies. The evidence suggests PL 480, while modestly progressive in its distribution, is if anything procyclical in recipient economies. Food aid fails to stabilize food availability. Both increased domestic food production i.e., agricultural development and commercial trade appear more effective than food aid in advancing food security objectives through the stabilization of food availability per capita in low-income economies.Food Security and Poverty,

THE EFFECTS OF REAL EXCHANGE RATE DEPRECIATION ON STOCHASTIC PRODUCER PRICES IN LOW INCOME AGRICULTURE

Demand and Price Analysis, International Relations/Trade,

FOOD AID EFFECTIVENESS: "IT'S THE TARGETING, STUPID!"

In the 1992 United States presidential campaign, Bill Clinton and his staff regularly invoked the forceful reminder "It's the economy, stupid!" in order to maintain a tight focus on the core issue that would ultimately decide their electoral success or failure. This initially seemed reductionist to many observers, because a presidential campaign is a complex affair, with myriad issues and pressures confronting the candidate every day. But Clinton and his staff were ultimately proved correct. Most of the important issues that could ignite or derail their campaign did boil down to the economy, and their famous, ruthless focus proved highly successful. This paper advances the argument that similar focus on issues of targeting are essential if food aid is to succeed in its core mission to contribute to human development by providing temporary relief of food insecurity among poor peoples in the world. The issue of "targeting" concerns the who, the when, the what and the how questions surrounding transfers: is aid reaching people who need it (and not flowing to people who do not need it), when they need it, in appropriate form, and through effective modalities? There has been considerable research in recent years on targeting transfers generally, much of it motivated by the search for effective targeting mechanisms that do not require costly administrative screening. Targeting is of special importance in food aid for two basic reasons. First, food is a critical resource. People who go without enough and appropriate food for even a relatively short period of time can suffer irreversible health effects of undernutrition and related diseases and injuries. Therefore, reaching beneficiaries who would otherwise suffer undernutrition, in a timely manner, and in an appropriate form is especially important for the effectiveness of food transfers. And if done right, food transfers can be fundamental to effective development strategy, by safeguarding the most valuable asset of the poor: the human capital embodied in their health and education. Second, the key alleged problems surrounding food aid - displaced international trade, depressed producer prices in recipient countries, labor supply disincentives, delivery delays, misuse by intermediaries, diversion to resale or feeding livestock or alcohol brewing, dependency, inattention to beneficiaries' micronutrient needs, etc. - all revolve ultimately around questions of targeting. If the donor community could improve the targeting of food aid, it could improve the effectiveness of food aid in accomplishing its primary humanitarian and development aim - the maintenance of valuable human capital - and reduce many of the errors that sometimes make food aid controversial, ineffective, or both. A limited amount of descriptive research has explored ex post whether food aid has reached intended beneficiaries, and has found considerable targeting errors of inclusion (providing aid to the non-needy) and exclusion (failure to reach the needy) at both macro and micro levels. There have also been considerable efforts at improving ex ante food aid targeting through the development and refinement of early warning systems, vulnerability mapping, and similar tools, so that aid might reach needy people in a more reliable and timely fashion. This paper offers a brief interpretive review of this evidence. Section I summarizes the empirical evidence on food aid targeting at both macro- and micro- levels, emphasizing the inherent tradeoff between errors of exclusion (missing intended beneficiaries) and errors of inclusion (providing transfers to the non-needy). Section II then discusses the consequences of targeting errors, again looking at both errors of exclusion and inclusion and at micro- as well as macro- levels. Section III reviews some of the options available for improving targeting. Section IV concludes.Food Security and Poverty, Q18, O1, I1,

Employment dynamics in the rural nonfarm sector in Ethiopia Do the poor have time on their side?

We study rural employment transitions in Ethiopia between farming and both low- and high-return nonfarm employment. We find that initial asset holdings and access to saving and credit are important factors for transition into high-return rural nonfarm employment and that households’ participation in high-return rural nonfarm activities is robust to their experience of health shocks. However, shocks that affect their wealth or liquidity may trigger descents into low-return nonfarm employment. On the other hand, shocks that reduce agricultural income motivate transitions into high-return rural nonfarm employment.rural nonfarm; income diversification; employment transitions; Ethiopia; shocks

ARE AGRICULTURAL EXPERIMENT STATION FACULTY SALARIES COMPETITIVELY OR MONOPSONISTICALLY DETERMINED?

We examine the determinants of agricultural experiment station faculty salaries and find that productivity pays-as manifest by grantsmanship, publications, and the elicitation of competing offers-with no residual evidence of a negative seniority-salary relationship that could signal university monopsony power. This contrasts with findings in the previous literature on faculty salaries. Moreover, national market salary benchmarks, which may proxy for imperfectly observable productivity, correlate almost one-for-one with individual faculty salaries, with individual deviations from peers' salaries proving essentially random. This evidence is much more consistent with the hypothesis that experiment station faculty salaries are determined in a competitive labor market than with the prevailing wisdom that they are set monopsonistically.Teaching/Communication/Extension/Profession,