Food prices in international markets have spiked three times in the past five years: in mid-2008, early 2011 and mid-2012 (Figure 1). The first of those spikes – when rice prices more than doubled – prompted urban riots in dozens of developing countries. It may have contributed even to the unrest that led to the Arab Spring. The most common government response was to alter trade restrictions so as to insulate the domestic market from the international price rise. And the most common justification for that action (tighter export restrictions or lower import barriers on food staples) was that it would reduce the number of people who would fall into poverty. Not only are food prices politically sensitive, but many poor people are vulnerable to higher food prices, because the poorest people spend a large fraction of their incomes on food.
Agriculture and Rural Development
In the last five years, higher food prices have provoked government interventions in agricultural markets across the globe, often in the name of protecting the poor. But do higher food prices actually hurt the rural poor?
In the past decade, economists such as Daron Acemoglu, Abhijit Banerjee, Nathan Nunn, and James Robinson have empirically validated the primacy of ‘good’ institutions in driving beneficial political and economic outcomes. While this has been a great leap for academic economics, the applicability to policy is debatable. Specifically, as the empirical techniques employed generally exclude components of institutional variation that change over the short- to medium-run (see Rohini Pande and Christopher Udry), the respective findings potentially don't have much to say about what can be expected from deliberate attempts to generate 'good' institutions.
Serious empirical investigation of the effects of institutional reform remains scant, and for good reason. Rigorously identifying the effects of democratization – or any other specific reform – is extremely difficult, particularly at the national-level. When and where societies enact democratic reforms (such as in Eastern Europe in 1989), such reforms go part in parcel with sweeping changes in economic policy, institutional frameworks, and political actors (in the technical lexicon, such reforms are ‘endogenous’). This makes it almost impossible to isolate the effects of the reform itself from the effects of the multitude of other contemporaneous changes.
The greatest development challenge facing Sub-Saharan Africa today is lifting 400 million of its people out of extreme poverty. The continent has abundant land and mineral resources to meet the challenge, but only if land governance can be improved. A new study, Securing Africa’s Land for Shared Prosperity, offers a ten-point program to improve land governance by accelerating policy reforms and boosting investments at a cost of US $4.5 billion over 10 years.
Meet Jean Bosco Hakizimana, a farmer in Burundi who survived a decade-long civil war.
In response to the problems of high coordination costs among the poor, efforts are underway in many countries to organize the poor through "self-help groups" (SHGs) -- membership-based organizations that aim to promote social cohesion through a mixture of education, access to finance, and linkages to wider development programs.
Food price spikes, price insulation, and poverty
This paper looks into the impact of changes in restrictions on staple foods trade during the 2008 food price crisis on global food prices and also analyzes the impact of such insulating behavior on poverty in various developing countries and globally.
If you saw how poor I was before, you would see that things are getting better.
When I hear stories like that of Jean Bosco Hakizimana, a Burundian farmer whose life was transformed by a cow, I get excited about the change we can all make. Jean Bosco’s income is improving, his kids are eating better, his wife has some nice clothes, and his manioc fields are yielding better harvests — all thanks to the milk and fertilizer from this one cow.
A similar story is playing out in more than 2,600 communities across Burundi, offering new life to a people once decimated by civil war. These community agricultural programs sponsored by the International Development Association (IDA), the World Bank’s fund for the poorest, show that development doesn’t have to be that complicated and that collective effort can make all the difference.
In a new book released Monday, the World Bank's Africa Region convincingly argued for "Securing Africa's Land for Shared Prosperity" by recording land rights for both individuals and groups. That’s mainly because at a time when vastly-increased commodity demand has led to a series of widely publicized “land grabs” and urban expansion, the potential benefits from securing rights have greatly increased in several ways.
First, equity and efficiency. Poor and traditionally disadvantaged people, including women, have the least access to land rights, so securing their rights can provide them with access to a key productive resource. Also, if land rights are secured, land users will be more likely to invest in land improvement and modern technology to improve the efficiency of land use.
Wanted: Mobile apps for African agriculture (Credit: infoDev)
Today, there are close to 900 million mobile phone subscribers in Africa. Sixty-five percent of the continent’s labor force works in agriculture or related sectors and it accounts for 32% of the gross domestic product. Mobile innovations are already improving efficiencies in the agricultural value chain; research shows that grain traders with mobile application usage experienced income growth of 29% and banana farmers in Uganda saw their revenues go up with 36%.
The mAgri Challenge, a business competition, has been designed to identify and support entrepreneurs developing mobile apps for agriculture in Africa. If you have worked with mobile tech entrepreneurs in Africa over the last few years, you might be thinking: “Not another mobile apps challenge!” This ‘competition fatigue’ is not completely unwarranted. Too many quick competitions for mobile apps, which at first seemed cool and generated lots of attention, have left in their wake a pool of mobile entrepreneurs confused about the next steps they can take to grow their business.