Economywide Impact of Maize Export Bans on Agricultural Growth and Household Welfare in Tanzania PDF Download
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Author: Xinshen Diao
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 28
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Book Description
In recent years, the government of Tanzania, like other governments in Africa south of the Sahara, has periodically banned the export of staple crops (maize) in an attempt to ensure the domestic food supply and protect its citizens from international food price hikes. While this policy seems to be a common response to domestic production shortfalls or to high prices in international or neighboring countries markets, export bans not only have the potential to reduce producer prices locally but also, because the bans are often ad hoc, can cause significant market uncertainty for farmers and the private sector, ultimately making them less responsive in both supply and trade opportunities in the future. While complaints by farmers and traders regarding the export bans frequently appear in the newspapers in Tanzania, few rigorous analyses have been done to quantitatively measure the impacts of the policy. Given this knowledge gap and policy demand, we study the impact of export bans in Tanzania using a computable general equilibrium model. We find that although maize is an important food crop in Tanzania, its contribution to food price inflation is rather limited, and that banning cross-border maize exports lowers the national food price index by only 0.62.4 percent compared with the free-export scenario. The benefits of lower prices are captured primarily by urban households, but maize producer prices decrease by 726 percent, depending on the region. We also find that the export ban decreases the wage rate for low-skilled labor and the returns to land, while returns to nonagricultural capital and wage rate for the skilled labor increase, further hurting poor rural households and thus increasing poverty for the country as a whole.
Author: Xinshen Diao
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 28
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Book Description
In recent years, the government of Tanzania, like other governments in Africa south of the Sahara, has periodically banned the export of staple crops (maize) in an attempt to ensure the domestic food supply and protect its citizens from international food price hikes. While this policy seems to be a common response to domestic production shortfalls or to high prices in international or neighboring countries markets, export bans not only have the potential to reduce producer prices locally but also, because the bans are often ad hoc, can cause significant market uncertainty for farmers and the private sector, ultimately making them less responsive in both supply and trade opportunities in the future. While complaints by farmers and traders regarding the export bans frequently appear in the newspapers in Tanzania, few rigorous analyses have been done to quantitatively measure the impacts of the policy. Given this knowledge gap and policy demand, we study the impact of export bans in Tanzania using a computable general equilibrium model. We find that although maize is an important food crop in Tanzania, its contribution to food price inflation is rather limited, and that banning cross-border maize exports lowers the national food price index by only 0.62.4 percent compared with the free-export scenario. The benefits of lower prices are captured primarily by urban households, but maize producer prices decrease by 726 percent, depending on the region. We also find that the export ban decreases the wage rate for low-skilled labor and the returns to land, while returns to nonagricultural capital and wage rate for the skilled labor increase, further hurting poor rural households and thus increasing poverty for the country as a whole.
Author: Kentaro Murayama
Publisher:
ISBN: 9780355495621
Category : Exports
Languages : en
Pages : 116
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Book Description
The first essay tests the effectiveness of export bans as a price insulation policy using panel data of local maize prices across 35 markets in 7 countries (Tanzania and its neighboring countries of Burundi, Kenya, Malawi, Mozambique, Uganda, and Zambia). While the data have a relatively high rate of missing values, I use a multiple imputation method to utilize as much of the available information as possible for the analysis. Using an extended competitive storage model, I analyze the dynamics of local maize prices and test the effect of export bans. Not only I reject the null hypothesis of no impact of export bans on local maize prices, but I find that the export ban is associated with higher maize prices. In other words, an implementation of export ban induces higher prices due to the speculative demand instead of keeping the price low through the increased availability at the local market. Moreover, the impact of the export ban is conditional on the existence and magnitude of trade costs: with a high trade cost, the trade flow would not exist prior to an export ban and the ban would not binding. I find that the upward pressure of the export ban on local prices would be underestimated, if such non-binding cases are not taken into account. The second essay estimates a large-scale demand system of foods, and assesses the impact of price changes on food consumption and nutrition consumption patterns of Tanzanian households. Malnutrition is a widespread issue in Tanzania. For securing a sufficient supply of food, particularly grains, price policies such as subsidies or protective trade measures are exercised in Tanzania and many of its neighboring countries. However, evidence on the effectiveness of price policies for improving nutritional intakes are mixed. In the literature, studies on nutrient consumption are particularly scarce, and the roles of income and socioeconomic characteristics is often investigated separately from price responsiveness of food consumption. I assess the price responsiveness of foods and their associated nutritional intakes by estimating a flexible demand system - Exact Affine Stone Index demand system to overcome the limitation of alternative demand systems - using Tanzanian living standard surveys. Using the estimated elasticities, I find that the price of maize is not very influential to the caloric intakes even among very poor households due to these households' high capability to substitute foods and secure the level of energy intake. However, in exchange, intakes of other nutrients are greatly reduced when the maize price increases, due to the major role of maize as a relatively cheap source of calories and other nutrients. Evaluated at the historical maize price changes from 2007-2008, simulations indicate a small decline in the average energy intakes. However, the decreases in average micronutrient intakes are large and the deficiency incidence rises significantly. The third essay extends the framework of the second essay by incorporating the production of foods in households and the general equilibrium effects of food price changes to the wage, assessing the overall welfare changes. Many households in Tanzania are both consumers and producers of food crops. Higher food prices increase the real income of such households, and thus have a potential to significantly reduce the loss or even realize a net gain. In addition, higher prices of agricultural goods - or, in general, traded goods - may increase the demand for labor as the production level is increased. This higher demand, in turn, would increase the return to the wage, under a set of certain assumptions. This general equilibrium effect of food prices to the wage level is evaluated empirically using the living standard survey of Tanzania. Using the estimated price-wage elasticities and the data of budget and income shares, I assess the average welfare impact of the historical maize price increase across sub-populations of households. I find that the net effect through consumption, production, and wage earnings are, on average, positive for all the household across income levels. However, the net gains are much stronger for wealthier households and almost negligibly small for poorer households because of the dominantly strong gain from the wage earning increases compared with the smaller gains from production net consumption. Moreover, I identify the rural and/or farm households experience disproportional net loss, for significantly higher reliance on maize in consumption, compared with urban and/or non-farm households. (Abstract shortened by ProQuest.).
Author: Mara van den Bold
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 80
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Book Description
Many development programs that aim to alleviate poverty and improve investments in human capital consider womens empowerment a key pathway by which to achieve impact and often target women as their main beneficiaries. Despite this, womens empowerment dimensions are often not rigorously measured and are at times merely assumed. This paper starts by reflecting on the concept and measurement of womens empowerment and then reviews some of the structural interventions that aim to influence underlying gender norms in society and eradicate gender discrimination. It then proceeds to review the evidence of the impact of three types of interventionscash transfer programs, agricultural interventions, and microfinance programson womens empowerment, nutrition, or both. Qualitative evidence on conditional cash transfer (CCT) programs generally points to positive impacts on womens empowerment, although quantitative research findings are more heterogenous. CCT programs produce mixed results on long-term nutritional status, and very limited evidence exists of their impacts on micronutrient status. The little evidence available on unconditional cash transters (UCT) indicates mixed impacts on womens empowerment and positive impacts on nutrition; however, recent reviews comparing CCT and UCT programs have found little difference in terms of their effects on stunting and they have found that conditionality is less important than other factors, such as access to healthcare and child age and sex. Evidence of cash transfer program impacts depending on the gender of the transfer recipient or on the conditionality is also mixed, although CCTs with non-health conditionalities seem to have negative impacts on nutritional status. The impacts of programs based on the gender of the transfer recipient show mixed results, but almost no experimental evidence exists of testing gender-differentiated impacts of a single program. Agricultural interventionsspecifically home gardening and dairy projectsshow mixed impacts on womens empowerment measures such as time, workload, and control over income; but they demonstrate very little impact on nutrition. Implementation modalities are shown to determine differential impacts in terms of empowerment and nutrition outcomes. With regard to the impact of microfinance on womens empowerment, evidence is also mixed, although more recent reviews do not find any impact on womens empowerment. The impact of microfinance on nutritional status is mixed, with no evidence of impact on micronutrient status. Across all three types of programs (cash transfer programs, agricultural interventions, and microfinance programs), very little evidence exists on pathways of impact, and evidence is often biased toward a particular region. The paper ends with a discussion of the findings and remaining evidence gaps and an outline of recommendations for research.
Author: Esha Sraboni
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 36
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Book Description
Womens low status and persistent gender gaps in health and education in South Asia contribute to chronic child malnutrition (Smith et al. 2003) and food insecurity (von Grebmer et al. 2009), even as other determinants of food security, such as per capita incomes, have improved. This is particularly relevant for Bangladesh, where chronic food insecurity continues to be an important issue despite steady advances in food production. To be able to leverage agriculture as an engine of inclusive growth, there is a need to develop indicators for measuring womens empowerment, examine its relationship to various food-security outcomes, and monitor the impact of interventions to empower women. Using nationally representative survey data from Bangladesh, we examine the relationship between womens empowerment in agriculture and two measures of household food security: per adult equivalent calorie availability and dietary diversity. We use the Womens Empowerment in Agriculture Index to assess the extent of womens empowerment in agriculture and instrumental variables techniques to correct for the potential endogeneity of empowerment. We find that the overall womens empowerment score, the number of groups in which women actively participate, womens control of assets, and a narrowing gap in empowerment between men and women within households are positively associated with calorie availability and dietary diversity.
Author: Klaus Deininger
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 36
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Book Description
Indias National Rural Employment Guarantee Scheme (NREGS) is one of the largest public works programs globally. Understanding the impacts of NREGS and the pathway through which its impacts are realized thus has important policy implications. We use a three-round 4,000-household panel from Andhra Pradesh together with administrative data to explore short- and medium-term poverty and welfare effects of NREGS. Triple difference estimates suggest that participants significantly increase consumption (protein and energy intake) in the short run and accumulate more nonfinancial assets in the medium term. Direct benefits exceed program-related transfers and are most pronounced for scheduled castes and tribes and households supplying casual labor. Asset creation via program-induced land improvements is consistent with a medium-term increase in assets by nonparticipants and increases in wage income in excess of program cost.
Author: Aragie, Emerta
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Political Science
Languages : en
Pages : 20
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Book Description
Restrictions on exports of staples or cash crops are frequently imposed in developing countries to promote food security or industrial development goals. By diverting production to the local market, these policies aim to reduce prices and increase the supply of food or intermediate inputs to the benefit of consumers or downstream industrial users. Although export restrictions reduce aggregate welfare, they are attractive to policymakers: Governments gain support when they are seen to keep consumer prices low; likewise, politicians are swayed by industrial lobbyists who promise increased value-addition in exchange for access to cheaper inputs. This study weighs in on the debate around the desirability of export restrictions by simulating the economy-wide effects of Malawi’s longstanding maize export ban as well as a pro-posed oilseed export levy intended to raise value-addition in processing sectors. Our results show that, while export restrictions may have the desired outcome in the short run, producers respond to weakening market prospects in the longer run by restricting supply, often to the extent that the policies become self-defeating. Specifically, maize export bans only benefit the urban non-poor, while poor farm households experience income losses and reduced maize consumption in the long run. The oilseed export levy is equally ineffective: Even when export tax revenues are used to subsidize processors, gains in industrial value-addition are outweighed by declining agricultural value-addition as production in the fledgling oilseed sector is effectively decimated. The policy is further associated with welfare losses among rural households, while urban non-poor households benefit marginally.
Author: Ephraim Chirwa
Publisher: Oxford University Press, USA
ISBN: 0199683522
Category : Business & Economics
Languages : en
Pages : 315
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Book Description
This book takes forward our understanding of agricultural input subsidies in low income countries.
Author: Benson, Todd
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Political Science
Languages : en
Pages : 32
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Book Description
To guide economy-wide modeling efforts to identify specific public investments under Tanzania’s second Agricultural Sector Development Programme (ASDP II), this report provides an analysis of the performance of the rural economy of mainland Tanzania over the period 2008 through 2015, with a focus on the agriculture sector. More broadly, we seek to assess the nature and extent of any structural transformation in the rural economy by understanding trends in various components of it. The insights gained will then be used in the economy-wide modeling work to propose portfolios of public investments to foster both agricultural development in the short term—in alignment with the ASDP-II—and, in the longer-term, a sectoral transformation of the rural economy in which far fewer households rely solely on agriculture for their livelihoods.
Author: Comstock, Andrew
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Political Science
Languages : en
Pages : 76
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Book Description
This report is a critical review of two of the principal agricultural laws in Malawi, the Special Crops Act and the Agriculture (General Purposes) Act. Both are frequently used to justify interventions by government in agricultural marketing and trade activities. The review is to assess whether this legislation is effective in promoting the goals of the country around agricultural commercialization, and if not, to provide recommendations for revisions to the laws. As a secondary task, the review considers whether either law could be used as an appropriate legal framework for contract farming regulation and oversight. The review was based on a thorough desk review of the legislation and interviews with over 230 key informants involved in agricultural production, marketing, and trade. The interviews focused on the laws and how their application by government has affected the commercial activities of the informants for better or for worse.
Author: Daniel J. Clarke
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 64
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Book Description
Governments play a key role in supporting populations affected by natural disasters, including rebuilding infrastructure to ensure continued services and scaling-up public safety nets to prevent widespread hunger and poverty. However, the traditional approach of limiting greater spending to the aftermath of a disaster has many drawbacks. External support from bilateral or multilateral donors can be slow and unreliable. Private sector reinsurance can be prohibitively expensive. And reallocating budgets toward recovery and reconstruction is typically a slow process that can even hurt long-term development by drawing resources away from effective programs. Some countries are trying to mitigate this liability by banding together and creating sovereign catastrophe risk pools that allow governments to coordinate with one another to insure their uncertain fiscal liabilities at lower cost. Countries contribute to the pool, which then provides payments if an insured natural disaster strikes. The African Risk Capacity (ARC), has been proposed as a pan-Africa drought risk pool to insure against drought risk in Africa south of the Sahara. If fully operationalized, the ARC will mark a major change in how donors fund emergency support to countries in Africa during times of need. In this paper, we undertake a cost-benefit analysis of the ARC pool and discuss how lessons can inform the design of the ARC.
