From food subsidies to cash transfers: Assessing economy-wide benefits and trade-offs in Egypt
Breisinger, Clemens; Kassim, Yumna; Kurdi, Sikandra; Randriamamonjy, Josee; Thurlow, James. Article in press
Breisinger, Clemens; Kassim, Yumna; Kurdi, Sikandra; Randriamamonjy, Josee; Thurlow, James. Article in press
DOI : 10.1093/jae/ejad006
Abstract | View
Food is a vital part of poor households' budgets and so subsidizing staple foods would appear to be an obvious pro-poor policy. Indeed, most countries in North Africa have prioritized large national subsidy programs for staple foods and fuels as their main social safety net. However, these programs account for significant shares of government spending and often drive fiscal deficits, especially when import prices rise. In this paper we use a dynamic Computable General Equilibrium model to evaluate the trade-offs between reducing poverty and managing fiscal balances. The modeling framework allows us to measure the efficiency costs of subsidies compared to cash transfers - switching to the latter is an emerging regional trend. We analyze these issues through a detailed case study of Egypt, where efforts to replace food subsidies with cash transfers is already underway. Data is also available in Egypt to design scenarios that realistically reflect potential targeting effectiveness and administrative costs. We show that replacing broad food subsidies with targeted cash transfers of roughly equivalent fiscal costs can improve the welfare of the poorest households, but the continuation of fiscal deficits results in a deceleration of economic growth. The latter gradually reduces welfare gains for the poor and leads to substantial welfare losses for middle-income households who lose access to subsidies without benefitting from cash transfers. Our findings highlight the political challenges facing subsidy reform programs.
Civil conflict, cash transfers, and child nutrition in Yemen
Ecker, Olivier; Al-Malk, Afnan; Maystadt, Jean-François. Article in press
Ecker, Olivier; Al-Malk, Afnan; Maystadt, Jean-François. Article in press
DOI : 10.1086/726294
Abstract | View
The most dramatic outcomes of protracted civil conflict include increased malnutrition among children and the resulting consequences for lifelong health and prosperity. Little is known about how to mitigate the nutritional impact of conflict. Understanding the potential of social protection measures is particularly important when the risk of intense armed conflict is high. We use quarterly panel data from Yemen to estimate the impact of civil conflict on child nutrition and the effect of unconditional cash transfers in mitigating the adverse nutritional impact. The results show that a one-standard-deviation increase in armed conflict intensity reduces children’s weight-for-height z-scores by 9.6%, on average. We also find that the studied cash transfer program mitigates the estimated nutritional impact by 42.4%. Our analysis suggests that unconditional cash transfers can be an effective development policy tool to curb rising acute child malnutrition in Yemen.
Made in Africa: How to make local agricultural machinery manufacturing thrive
Daum, Thomas; Adegbola, Ygué Patrice; Kamau, Geoffrey; Kergna, Alpha Oumar; Daudu, Christogonus; Adebowale, Wahab Akeem; Adegbola, Carine; Bett, Charles; Mulinge, Wellington; Zossou, Roch Cedrique; Nientao, Abdoulaye; Kirui, Oliver; Oluwole, Fatunbi Abiodun . Article in press
Daum, Thomas; Adegbola, Ygué Patrice; Kamau, Geoffrey; Kergna, Alpha Oumar; Daudu, Christogonus; Adebowale, Wahab Akeem; Adegbola, Carine; Bett, Charles; Mulinge, Wellington; Zossou, Roch Cedrique; Nientao, Abdoulaye; Kirui, Oliver; Oluwole, Fatunbi Abiodun . Article in press
DOI : 10.1002/jid.3845
Abstract | View
Manufacturing has the potential to drive economic growth, job creation and poverty reduction, but African manufacturers face challenges in competing with global markets. Agricultural machinery manufacturing may be one niche where African manufacturers can succeed. This paper examines the challenges and opportunities facing local agricultural manufacturers in Africa based on a survey of 386 manufacturers in four countries and qualitative methods. Results show that small, dedicated entrepreneurs have created vibrant local machinery markets. These manufacturers have several comparative advantages, in particular, the ability to develop machinery adapted to local agroecological conditions but face challenges related to financing, human resources, utilities, raw materials, production equipment and the regulatory environment. The paper offers recommendations on how to support local manufacturers to make “Made in Africa” the first choice for African farmers and agro-food processors.
Cluster-based agricultural development: A comparison between China and Africa
Zhang, Xiaobo. 2023
Zhang, Xiaobo. 2023
DOI : 10.22434/IFAMR2022.0041
Abstract | View
Clusters for high-value crops are ubiquitous in China and in African countries. Drawing from three case studies (potato cluster in China, medicinal and aromatic cluster in Egypt, and dates cluster in Tunisia), this chapter discusses the major challenges facing cluster development and the roles of different agents (e.g. entrepreneurs, business associations, and local governments). Cluster development involves supply-side or demand-side bottlenecks along the way, which are beyond the capacity of individual enterprises. Whether a cluster can develop to the next stage depends crucially upon whether the bottlenecks can be resolved. Because the bottlenecks are context- and temporal-specific, it would be impossible for a planner or outsider donor to prescribe a one-size-fits-all intervention to overcome all the binding constraints. Instead, local elites, such as business leaders and local officials, can play a greater role in identifying the emerging bottlenecks and figuring out indigenous solutions. In China, because local governments have an embedded interest in promoting local economic development, they are keen to provide local public goods or initiate joint actions to address the successive binding constraints and facilitate cluster development. By comparison, the role of the local government is more muted in Africa, limiting the growth potentials of agricultural clusters.
The Russia-Ukraine war: Implications for global and regional food security and potential policy responses
Abay, Kibrom A.; Breisinger, Clemens; Glauber, Joseph W.; Kurdi, Sikandra; Laborde Debucquet, David; Siddig, Khalid. 2023
Abay, Kibrom A.; Breisinger, Clemens; Glauber, Joseph W.; Kurdi, Sikandra; Laborde Debucquet, David; Siddig, Khalid. 2023
DOI : 10.1016/j.gfs.2023.100675
Abstract | View
This paper analyzes the implications of the Russian-Ukraine war on global and regional food security. We start with a global vulnerability analysis to identify most vulnerable regions and countries. The Middle East and North Africa (MENA) region is particularly vulnerable to trade shocks because of its high food import dependence. Thus, we provide descriptive evidence characterizing how food systems and policies impact vulnerability to the price shock in selected MENA countries: Egypt, Sudan, and Yemen. Within these countries, we show that the crisis will differentially impact poor and non-poor households as well as rural and urban households. Although the absolute level of food insecurity may still be higher in rural areas where larger numbers of poor households are located, urban poor are likely to suffer most because of the Russia-Ukraine crisis and associated hikes in food prices, especially in those countries where social protection and food subsidies are missing. We review lessons from previous food crises and identify actions needed to take (and to avoid) to protect most vulnerable countries and households in the short-term while also highlighting long-term policy options to diversify food, fertilizer and energy production and trade.
How resilience innovations in food supply chains are revolutionizing logistics, wholesale trade, and farm services in developing countries
Reardon, Thomas; Vos, Rob. 2023
Reardon, Thomas; Vos, Rob. 2023
DOI : 10.22434/IFAMR2022.0138
Abstract | View
Developing country food supply chains have been pummeled by a series (and often a confluence) of shocks over the past several decades, including the Russia-Ukraine war, COVID-19, climate shocks from hurricanes to floods to droughts, animal and plant diseases, an intensification of road banditry and local conflicts, and overlaying all these, deep transformation in markets themselves with new requirements for quality and food safety. Yet supply chains have been largely resilient, adapting and bouncing back in surprising ways. We show that this has often involves deep ‘pivoting’ by one segment or one value chain, and ‘co-pivoting’ by another to facilitate the former’s pivot. We present a conceptual framework and then illustrate with a variety of examples from Africa and Asia, such as pivoting toward e-commerce by Asian retailers and co-pivoting by delivery intermediaries; pivoting toward quality horticultural production by African and Asian farmers and co-pivoting by mobile outsource services for farming and marketing; and building of redundant ports to protect rice milling operations from climate shocks in Asia by agribusiness and logistic firms. The paper provides implications for policy to facilitate these adaptions and for resilience strategies of agribusiness firms.
Terrorism and inbound tourism in Egypt: Economy-wide and distributional impacts
Elshennawy, Abeer; Siddig, Khalid. 2023
Elshennawy, Abeer; Siddig, Khalid. 2023
DOI : 10.1111/rode.12985
COVID-19 and food insecurity in Africa: A review of the emerging empirical evidence
Tabe-Ojong, Martin Paul Jr.; Nshakira-Rukundo, Emmanuel; Gebrekidan, Bisrat Haile. 2023
Tabe-Ojong, Martin Paul Jr.; Nshakira-Rukundo, Emmanuel; Gebrekidan, Bisrat Haile. 2023
DOI : 10.1093/erae/jbad008
Abstract | View
The coronavirus disease (COVID-19) risks rolling back many of the efforts and global successes recorded in reducing poverty and food insecurity. We undertake a systematic search and review of the growing microeconomic literature on the association between COVID-19 and food insecurity in Africa, discussing its implications for food policy and research. Furthermore, we review the various coping strategies households employ to build resilience to COVID-19. The evidence indicates that COVID-19 is associated with an increase in food insecurity both ex-ante and ex-durante. Given the covariate nature of COVID-19 and associated control mechanisms, current evidence is short of providing clear causal learning. We provide some potential interesting areas where future efforts can be geared to improve learning on the relationship between COVID-19, food insecurity, and building resilience to shocks.
Revisiting poverty trends and the role of social protection systems in Africa during the COVID-19 pandemic
Abay, Kibrom A.; Yonzan, Nishant; Kurdi, Sikandra; Tafere, Kibrom. 2023
Abay, Kibrom A.; Yonzan, Nishant; Kurdi, Sikandra; Tafere, Kibrom. 2023
DOI : 10.1093/jae/ejac041
Abstract | View
Quantifying the impact of the COVID-19 pandemic on poverty in Africa has been as difficult as predicting the path of the pandemic, mainly due to data limitations. The advent of new data sources, including national accounts and phone survey data, provides an opportunity for a thorough reassessment of the impact of the pandemic and the subsequent expansion of social protection systems on the evolution of poverty in Africa. In this paper, we combine per capita GDP growth from national accounts with data from High-Frequency Phone Surveys for several countries to estimate the net impact of the pandemic on poverty. We find that the pandemic has increased poverty in Africa by 1.5 to 1.7 percentage points in 2020, relatively smaller than early estimates and projections. We also find that countries affected by Fragility, Conflict and Violence experienced the greatest increases in poverty, about 2.1 percentage points in 2020. Furthermore, we assess and synthesize empirical evidence on the role that social protection systems played in mitigating the adverse impact of the COVID-19 crisis in Africa. We review social protection responses in various African countries, mainly focusing on the impact of these programs and effectiveness of targeting systems. Although the evidence base on the protective role of social protection programs during the pandemic remains scarce, we highlight important findings on the impacts of these programs while also uncovering some vulnerabilities in social protection programming in Africa. We finally draw important lessons related to the delivery, targeting and impact of various social protection programs launched in Africa in response to the pandemic.
Social protection amidst social upheaval: Examining the impact of a multi-faceted program for ultra-poor households in Yemen
Brune, Lasse; Karlan, Dean; Kurdi, Sikandra; Udry, Christopher R.. 2022
Brune, Lasse; Karlan, Dean; Kurdi, Sikandra; Udry, Christopher R.. 2022
DOI : 10.1016/j.jdeveco.2021.102780
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