Supermarkets, Modern Supply Chains, and the Changing Food Policy Agenda

There is great interest among policy makers in how to influence the behavior of supermarkets in ways that serve the interests of important groups in society, especially small farmers and the owners of traditional, small-scale food wholesale and retail facilities. Two broader issues are also important: (1) finding a way for food prices to “internalize” the full environmental costs of production and marketing; and (2) finding a way for supermarkets to be part of the solution, rather than part of the problem, to the health problems generated by an “affluent” diet and lifestyle. There are concerns over the growing concentration in global food retailing and the potential market power that concentration implies. But the evidence of fierce competition at the retail level, and the high contestability for food consumers’ dollars, have kept this issue in the background. The ultimate impact of supermarkets in developing countries will be on the level and distribution of improved welfare for consumers. What happens to small farmers, traditional traders and mom-and-pop shops will be factors in both the size of welfare gains and their distribution, but many other factors will also come into play. Our judgment on the impact of the supermarket revolution must incorporate all of those factors. This paper places the supermarket debate in the broader evolution of food policy analysis, which is a framework for integrating household, market, macro and trade issues as they affect hunger and poverty. Increasingly, supermarkets provide the institutional linkages across these issues.Food policy; agricultural diversification; structural transformation; poverty

Food Security and Economic Growth: An Asian Perspective

Food security is an elusive concept. Many economists doubt that it has any precise meaning at all. Having enough to eat on a regular basis, however, is a powerful human need, and satisfying this need drives household behavior in both private and public markets in predictable ways. Indeed, the historical record suggests that policy initiatives by central governments to satisfy this need for food security—at the level of both households and national markets—can speed economic growth in countries where a substantial proportion of the population does not get enough to eat. Paradoxically, in most successfully developing countries, especially those in the rice-based economies of Asia, the public provision of food security quickly slips from its essential role as an economic stimulus into a political response to the pressures of rapid structural transformation, thereby becoming a drag on economic efficiency. The long-run relationship between food security and economic growth thus tends to switch from positive to negative over the course of development. Because of inevitable inertia in the design and implementation of public policy, this switch presents a serious challenge to the design of an appropriate food policy.Food security, democracy, foreign assistance, economic development

Food Security in Indonesia: Current Challenges and the Long-Run Outlook

In the long run-- over the past four decades--improvements in food security in Indonesia have generally been driven by pro-poor economic growth and a successful Green Revolution, led by high-yielding rice varieties, massive investments in rural infrastructure, including irrigation, and ready availability of fertilizer. In the short run, food security in the country has been intimately connected to rice prices. After more than two decades of stabilizing domestic rice prices around the long-run trend of prices in the world market, Indonesia emerged from the devastating financial crisis in 1998 with domestic rice prices much higher than world prices and much higher than long-run trends of real prices in rupiahs. Although the current political rhetoric pushing for even higher prices uses food security as the rationale (i.e., they will cause greater self-sufficiency in rice), in fact few productivity gains are now available to rice farmers, so their gains will be consumers’ loses. High rice prices have a major impact on the number of individuals living below the poverty line and on the quality of their diet. The paper reviews research on the impact of rice prices on the poor, on real wages in rural and urban areas, and on the broader macroeconomic consequences for investments in labor-intensive manufacturing. Discussion then focuses on how political and economic circumstances have changed since price stabilization, implemented by the national food agency (Bulog), balanced the needs of producers and consumers as Indonesia’s approach to food security. The most important current challenge for the country’s future food security is re-starting rapid, pro-poor growth. An additional challenge on the horizon is the “supermarket revolution,” which is rapidly changing the basic structure of Indonesia’s food marketing system. Within a decade well over half of Indonesia’s rice is likely to be sold in supermarkets, thus transferring to the private sector a supply-management role that had historically been a public sector activity.food security, Indonesia, agriculture, rice, poverty

Adding value through policy-oriented research: reflections of a scholar-practitioner

Any evaluation of the benefits of policy-oriented social science research faces fundamental difficulties. These include the uncertainty in determining a causal link between research and the outcome of a policy or the value of a policy outcome. Nonetheless, firm connections can be established between policy research and policy outcomes if there are strong links that bridge the gaps between social science research and the various parts of the policy process. These connections can be established often enough to make it possible to learn about the relationship between research and outcome and the key variables that affect the social profitability of the underlying research. This essay uses the author's experience with agricultural price policies in Asia, Indonesia in particular, to examine these connections. Four issues pervade the analysis of price policy in Asia: How does an analyst know what policy is best? How can an analyst best communicate the results of research to policymakers? Can a new policy be implemented? Does the new policy work? This last issue, the evaluation of policy, is often neglected, but it can provide an important input into the design of policy and should be made an integral part of any policy process. The author's experience in Indonesia suggests four factors that can make policy-oriented research successful. First, the analyst should be involved with the same policymakers or in the same policy setting for the long term. Second, there is a need to find a balance between keeping analysis and advice confidential and the ultimate publication of the key models and results. Third, the analysts should rely on the analytical paradigms of the mainstream of the economic profession even while examining deviations from their underlying assumptions. Lastly, there should be continuing demand from policymakers for problem-oriented analysis.Social sciences Research., Prices Government policy Bangladesh., Indonesia Economic policy., Impact assessment,

Convexity in stochastic cooperative situations

This paper introduces a new model concerning cooperative situations in which the payoffs are modeled by random variables. We analyze these situations by means of cooperative games with random payoffs. Special attention is paid to three types of convexity, namely coalitional-merge, individual-merge and marginal convexity. The relations between these types are studied and in particular, as opposed to their deterministic counterparts for TU games, we show that these three types of convexity are not equivalent. However, all types imply that the core of the game is nonempty. Sufficient conditions on the preferences are derived such that the Shapley value, defined as the average of the marginal vectors, is an element of the core of a convex game

The Pathways out of Poverty in Rural Indonesia: an empirical assessment

Since most poor live in rural areas, primarily engaged in low productivity farm activity, the pathway out of poverty must be strongly connected to productivity increases, whether they are realised in farming, rural non-farm enterprises or via urban migration. By utilizing the IFLS panel dataset for 1993 and 2000 from Indonesia, this paper shows, using empirical techniques, which pathways out of poverty were most successful in Indonesia?s past. Our findings suggest that the increased engagement of rural farmers in rural non-farm enterprises is a key way to alleviate rural poverty.

Electron-hole spectra created by adsorption on metals from density-functional theory

Non-adiabaticity in adsorption on metal surfaces gives rise to a number of measurable effects, such as chemicurrents and exo-electron emission. Here we present a quantitative theory of chemicurrents on the basis of ground-state density-functional theory (DFT) calculations of the effective electronic potential and the Kohn-Sham band structure. Excitation probabilities are calculated both for electron-hole pairs and for electrons and holes separately from first-order time-dependent perturbation theory. This is accomplished by evaluating the matrix elements (between Kohn-Sham states) of the rate of change of the effective electronic potential between subsequent (static) DFT calculations. Our approach is related to the theory of electronic friction, but allows for direct access to the excitation spectra. The method is applied to adsorption of atomic hydrogen isotopes on the Al(111) surface. The results are compatible with the available experimental data (for noble metal surfaces); in particular, the observed isotope effect in H versus D adsorption is described by the present theory. Moreover, the results are in qualitative agreement with computationally elaborate calculations of the full dynamics within time-dependent density-functional theory, with the notable exception of effects due to the spin dynamics. Being a perturbational approach, the method proposed here is simple enough to be applied to a wide class of adsorbates and surfaces, while at the same time allowing us to extract system-specific information.Comment: 23 pages, 9 figures, accepted for publication in Phys. Rev. B, http://prb.aps.org/, v2: some major improvements, plus correction of minor error

Pathways out of poverty during an economic crisis : an empirical assessment of rural Indonesia

Most poor people in developing countries still live in rural areas and are primarily engaged in low productivity farming activities. Thus pathways out of poverty are likely to be strongly connected to productivity increases in the rural economy, whether they are realized in farming, in rural nonfarm enterprises, or by way of rural-urban migration. The authors use cross-sectional data from the Central Statistical Board for 1993 and 2002, as well as a panel data set from the Indonesia Family Life Survey for 1993 and 2000, to show which pathways out of poverty were most successful over this period. The findings suggest that increased engagement of farmers in rural nonfarm enterprises is an important route out of rural poverty, but that most of the rural agricultural poor that exit poverty still do so while remaining rural and agricultural. So changes in agricultural prices, wages, and productivity still play a critical role in moving people out of poverty.Rural Poverty Reduction,Population Policies,Achieving Shared Growth,Economic Theory&Research

Pathways Out of Poverty During an Economic Crisis: An Empirical Assessment of Rural Indonesia

Most poor people in developing countries still live in rural areas and are primarily engaged in low productivity farming activities. Thus pathways out of poverty are likely to be strongly connected to productivity increases in the rural economy, whether they are realised in farming, rural non-farm enterprises or via rural-urban migration. We use cross-sectional data from the Central Statistical Board (BPS) for 1993 and 2002, as well as a panel data set from the Indonesia Family Life Survey (IFLS) for 1993 and 2000, to show which pathways out of poverty were most successful over this period. Our findings suggest that increased engagement of farmers in rural non-farm enterprises is an important route out of rural poverty, but that most of the rural agricultural poor that exit poverty still do so while remaining rural and agricultural. Thus changes in agricultural prices, wages and productivity still play a critical role in moving people out of poverty.Poverty dynamics, non-farm sector, micro-growth regression