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91. Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger

Author:
Jenny C. Aker
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Due partly to costly information, price dispersion across markets is common in developed and developing countries. Between 2001 and 2006, cell phone service was phased in throughout Niger, providing an alternative and cheaper search technology to grain traders and other market actors. Weconstruct a novel theoretical model of sequential search, in which traders engage in optimal search for the maximum sales price, net transport costs. The model predicts that cell phones will increase traders' reservation sales prices and the number of markets over which they search, leading to a reduction in price dispersion across markets. To test the predictions of the theoretical model, we use a unique market and trader dataset from Niger that combines data on prices, transport costs, rainfall and grain production with cell phone access and trader behavior. We first exploit the quasi-experimental nature of cell phone coverage to estimate the impact of the introduction of information technology on market performance. The results provide evidence that cell phones reduce grain price dispersion across markets by a minimum of 6.4 percent and reduce intra-annual price variation by 12 percent. Cell phones have a greater impact on price dispersion for market pairs that are farther away, and for those with lower road quality. This effect becomes larger as a higher percentage of markets have cell phone coverage. We provide empirical evidence in support of specific mechanisms that partially explain the impact of cell phones on market performance. Robustness checks suggest that the results are not driven by selection on unobservables, nor are they solely a result of general equilibrium effects. Calculations of the four-firm concentration index suggest that the grain market structure is competitive, so the observed reductions in price dispersion are not due to greater market collusion. The primary mechanism by which cell phones affect market-level outcomes appears to be a reduction in search costs, as grain traders operating in markets with cell phone coverage search over a greater number of markets and sell in more markets. The results suggest that cell phones improved consumer and trader welfare in Niger.
Topic:
Agriculture, International Trade and Finance, Markets, and Science and Technology
Political Geography:
Africa and Nigeria

92. Rainfall Shocks, Markets, and Food Crises: Evidence from the Sahel

Author:
Jenny C. Aker
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
How do markets respond to extreme rainfall in West Africa? This paper examines the effect of weather on grain market performance in Niger, a country increasingly affected by drought and severe food crises over the past two decades. Using a dataset that combines information on rainfall, agricultural production, prices and transaction costs, I exploit rainfall variation to estimate the impact of drought on grain market performance between 1997 and 2006. Time series tests suggest that grain markets in Niger respond to supply shocks and that markets are more integrated during drought years. Exploiting the exogeneity of extreme rainfall in a difference-in-differences framework supports these findings: drought reduces grain price dispersion across markets. This impact is stronger as a higher percentage of markets are affected by drought, as was the case in 2004/2005, the year of a severe food crisis. The results suggest that early warning systems in West Africa should focus on the spatial impact of drought at the sub-regional level, as well as monitor prices in key forecasting markets during the harvest period.
Topic:
Agriculture, International Political Economy, and Markets
Political Geography:
Africa and Nigeria

93. An Accounting Method-Based Cost-Benefit Analysis of Conformity to Certified Organic Standards for Spices in Tanzania

Author:
Evelyne Lazaro and Adam Akyoo
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
Certified organic farming has emerged as a market channel providing participating African small-holders with access to high value markets in the EU. The benefits may include not only a guaranteed produce market, but also premium prices, and higher net revenues. Where training in organic farming techniques is provided there may be also benefits in terms of increased yield. The major cost challenges are those for certification, although in many cases donor support to exporters is available to cover these.
Topic:
Agriculture and Markets
Political Geography:
Africa and Tanzania

94. The Political Economy of Agricultural Trade Interventions in Africa

Author:
Robert H. Bates
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
This chapter explores the political economy of agricultural trade protection in Sub-Saharan Africa. Figure 1.1 portrays the impact of government intervention in support of agricultural and non-agricultural products by governments 1955-2005 in different regions of the globe. In devising these measures, World Bank researchers calculated for a sample of agricultural and non-agricultural commodities the degree to which government policies – tariffs, subsidies, or currency distortions -- led to a separation of domestic from world market prices. The measures represent un-weighted averages. When greater than 0, they indicate that government policies favor farming; when below, that their policies favor other sectors.
Topic:
Agriculture and International Trade and Finance
Political Geography:
Africa

95. Pricing Farmers out of Cotton: The costs of World Bank reforms in Mali

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Mali is one of the world's poorest countries, with over two-thirds of the population – mostly in rural areas – living on less than a dollar a day. Mali is also the second largest cotton producer in sub-Saharan Africa after Burkina Faso. Cotton production is generally heralded as a success story in much of West and Central Africa, providing a critical development strategy for poor African countries such as Mali and enabling both governments and farm households to access income. The World Bank, International Monetary Fund (IMF), and the wider donor community have also recognised the importance of cotton in reducing poverty and supporting the country's economy. However, in recent years, much of this success has been undermined by depressed and volatile cotton prices, partly as the result of unchecked US subsidies, and the downward trend of commodity prices.
Topic:
Agriculture, International Organization, International Trade and Finance, Treaties and Agreements, and World Trade Organization
Political Geography:
Africa, United States, and Mali

96. Boda-bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya

Author:
Jann Lay, George Michuki M'Mukaria, and  Toman Omar Mahmoud
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.
Topic:
Agriculture, Economics, and Poverty
Political Geography:
Kenya and Africa

97. Securing Household Income among Small-scale Farmers in Kakamega District: Possibilities and Limitations of Diversification

Author:
Henriette Dose
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
In the debate of sustainable rural livelihoods, diversification is seen as a way to secure incomes and to increase food security. On the basis of a data set on income security, this paper analyses to what extent this applies to small-scale farmers in Kakamega District, Kenya. Using the sustainable rural livelihoods approach, this paper draws the conclusion, that (1) diversification in agricultural production is not sufficient for securing rural livelihoods in Kakamega District; (2) a sufficient income diversification depends heavily on requirements like access to education, infrastructure, as well as investment capital; and (3) small-scale farmers in Kakamega District in most cases lack these requirements, therefore not being able to achieve secure household incomes or increased food security.
Topic:
Security, Agriculture, and Economics
Political Geography:
Kenya and Africa

98. Information, Incentives and Institutions: Experimenting with Private-Public Partnerships to Link the Poor with Modern Supply Chains

Author:
Jikun Huang, Johan Swinnen, Marcel Fafchamps, Tom Reardon, Bart Minten, and Scott Rozelle
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
To lift more than 10,000 farmers directly out of poverty by developing new Best-Practice Models for linking the poor to modern supply chains and after scaling up by our private and public partners to lift more than 1 million farmers out of poverty.
Topic:
Agriculture, Development, Non-Governmental Organization, and Poverty
Political Geography:
Africa, China, India, Asia, Senegal, and Madagascar

99. What's in it for Labour? Private social standards in the cut flower industries of Kenya and Tanzania

Author:
Lone Riisgaard
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
Export of cut flowers from East Africa to Europe is an example of how tightened quality regulations and increasing concern with social and environmental issues have created a highly codified industry. For producers participating in value chains driven by large retailers, adopting social and environmental standards is a requirement and specificities are dictated by the buyers. In this paper focus is on private social standards and the opportunities and challenges they pose for labour organizations, especially trade unions. By incorporating the concept of labour agency, global value chain analysis is widened to encompass not just industrial development but also labour development.
Topic:
Agriculture, Economics, and Emerging Markets
Political Geography:
Kenya, Africa, Tanzania, and East Africa

100. The economics of certified organic farming in tropical Africa: A preliminary assessment

Author:
Simon Bolwig and Peter Gibbon
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
The paper examines the relative profitability of certified organic and conventional farming operations in tropical Africa as well as differences between organic and conventional farmers in rates of adoption of farming practices and in household factor endowments. The paper is based on three surveys in Uganda of smallholder farmers of respectively, organic coffee, cocoa, and pineapple and of matching control groups of conventional farmers. Organic production was in all cases organised on a contract farming-type basis, in schemes operated by the firm exporting the organic product. The central conclusion from the study is that farms that engaged in certified organic export production were significantly more profitable in terms of net farm income earnings than those that engaged only in conventional production. This was the result of generally significant differences between organic and conventional farmers' gross farm incomes, although these differences were further amplified by differences in costs. Income differences related partly to differences between organic and conventional farmers' factor endowments. Preliminary analyses indicted that, among factor endowments, area under crops subject to organic certification (CSC) and numbers of CSC plants had the strongest relations to farmers' sales volume and incomes,. Labour availability and average age of CSC plants had a much lower level of importance. As for other factors, yields were strongly related to sales volumes, but average price received was of lesser importance. The precise relative contribution of these different factors to sales volumes and incomes remains to be established in a further paper, however. The results for average net income also show enormous differences in profitability between organic farmers of different cash crops, with pineapple farmers earning three and five times more than cocoa and coffee farmers, respectively. It is worth underlining that, in contrast to the experience in developed countries, we found that organic conversion in tropical Africa is associated with increases rather than reductions in yield, which relates to the low-input characteristics of conventional farming on the continent. Focus group interviews suggest that organic farmers enjoyed higher yields due to more effective farm management technique, but the survey results on rates of adoption of yield-enhancing farming practices could not verify this.
Topic:
Agriculture, Development, and Economics
Political Geography:
Uganda and Africa