India is the World’s second largest producer of sugarcane (after Brazil). Approximately 45 million Indian farmers are involved in cane production, and cane processing is the second largest agro-processing sector in the Country. In her dissertation research on this industry (supervised by Goodhue and Sexton) Sandhya Patlolla encountered an unusual marketing practice that is unique to the Andhra Pradesh (AP) State. Private sugar processors issue ‘permits’ to selected cane growers a few weeks before harvest. These permits allow growers to deliver a specified amount of cane during a specified period of time. Farmers without a permit must sell their cane at a reduced price for manufacture into gur, a traditional Indian sweetener. The price difference averaged 43% over the six years of data acquired for our study. We wondered why sugar processors in AP would create uncertainty among farmers by using ex post permits instead of offering ex ante production contracts?
Agriculture and Rural Development
Conventional wisdom holds that Sub-Saharan African farmers use few modern inputs despite the fact that most growth-inducing and poverty-reducing agricultural growth in the region is expected to come largely from expanded use of inputs that embody improved technologies, particularly improved seed, fertilizers and other agro-chemicals, machinery, and irrigation. Yet following several years of high food prices, concerted policy efforts to intensify fertilizer and hybrid seed use, and increased public and private investment in agriculture, how low is modern input use in Africa really?
A recent surge in China’s food imports has rekindled concerns about global food demand raised by Brown (1995) and about food self-sufficiency in China. According to UN Comtrade data, China’s trade in food was roughly balanced until 2008 but subsequently moved into deficit, with net imports rising to $38.7 billion in 2013. A key question is whether China will become a massive net food importer like Japan and the Republic of Korea, which rely on world markets for more than 70 percent of grain and soybean demand.
China’s rapid economic growth, at 8.5 percent average annual per capita in purchasing power parity terms since economic reform began in 1978, has dramatically changed Chinese diets. While China’s per capita calorie consumption appears likely to be approaching its peak, the composition of food demand seems likely to continue to change, as consumers shift away from basic staples and towards animal-based products. This shift to greater dietary diversity imposes greater burdens on agricultural resources since animal-based diets require much more agricultural resources than vegetable-based diets.
During the 1990s and 2000s, nearly two dozen African countries proposed de jure land reforms extending access to formal, freehold land tenure to millions of poor households, but many of these reforms stalled. Titled land remains largely the preserve of wealthy households and, within households, mainly the preserve of men.
Smallholder agriculture in many developing countries has remained largely self-financed. However, improved productivity for attaining greater food security requires better access to institutional credit. Past efforts to extend institutional credit to smaller farmers has failed for several reasons, including subsidized operation of government-aided credit schemes. Thus, recent efforts to expand credit for smallholder agriculture that rely on innovative credit delivery schemes at market prices have received much policy interest. However, thus far the impacts of these efforts are not fully understood.
Good stewardship of land – whether fertile fields or tracts on the edges of growing cities – can drive sustainable and equitable development. Done well, good land governance can enable farmers, community leaders, city planners, remote sensing scientists, researchers and relief organizations to successfully deal with climate change, urbanization, gender equality, and food security. But the complexity of land administration, and its attendant institutional and political hurdles, often hamper progress and reinforce deep-seated inequalities and inertia instead of fostering growth and shared prosperity.
This is what makes the Annual World Bank Conference on Land and Poverty happening this week at the World Bank so important. Over 1,000 experts from 115 countries have gathered here for the event and are exploring a wide range of problems and potential solutions.
It is estimated that 1.3 billion people in 2009 were still without electricity. Many rural households in the developing world continue to cook with wood and biomass (mainly dung), and spend a lot of time collecting and preparing fuel for domestic use. Across the world, these time (and resulting health) burdens are thought to be higher for women and the children under their care.
One popular argument is that by relieving time burdens spent in collecting and preparing fuel, household electricity results in rural women engaging in market-based work — judged to be a good thing since women’s empowerment has been linked to having one’s own income. In fact, a number of studies show that the introduction of household electrical appliances accounts for a large share of the increase in married American women’s labor force participation in the 20th century. For the developing world, a recent paper by Taryn Dinkelman finds similar and large effects on female employment (and not on male employment) for South Africa, which are attributed to the use of electric stoves and other time saving appliances.
My experiences with field work thus far have been nothing if not adventurous. I seem to attract broken glass – a rock the size of a small coconut crashing through my 3rd floor window in Zanzibar, for instance, or the windows of my taxi being broken with baseball bats by an armed mob in Mali. Just the other day, my boss and I came within inches of dying in a fiery plane crash – we were on our way back to the main island of Zanzibar from Pemba island in a tiny 12-seater Soviet-era plane, and were just about to land in a strong crosswind when the engine on my side failed. We managed to land, somehow, and taxied to a stop right there on the runway to wait for a vehicle (ironically, it ended up being an ambulance) to take us to the terminal.
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.
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?