Distributional Effects of Maize Price Increases in Malawi

Abstract

In the wake of highly volatile world prices of staple commodities, we examine the impacts of increases in maize prices on various categories of households in Malawi. Using household-level data, changes in household income are calculated taking into account the net maize production status of the household and food price elasticities estimated from a censored demand system. While maize price increases have unequivocal deleterious effects on the incomes of urban households, rural households experience differential impacts. Net producing households in rural areas benefit from price increases with households above the poverty line obtaining proportionally higher incomes.     

Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

The importance of household asset diversity for livelihood diversity and welfare among small farm colonists in the Amazon

Taking a small farm colony on the Amazon frontier as a case study, this article examines the relationships among household assets, livelihood diversity and welfare. The findings show that: (1) few households diversified into non-agricultural income sources, but those that did also had agricultural incomes comparable to households primarily reliant on agriculture; (2) distinct household assets influence the extent of agricultural and non-agricultural diversity, implying that households with combinations of specific assets were best able to diversify their livelihoods, and (3) while specific types of household assets influence household welfare, livelihood diversity does not exert an additional effect on welfare. A key issue that emerges is that different arrays of assets are important for agricultural and non-agricultural diversity as well as for household welfare, implying that households need diverse assets for diverse livelihoods as well as better welfare.     

Incidence of agricultural export taxation in Papua New Guinea

The present fixed‐rate levy on major rural exports exerts a highly regressive and burdensome impact on marginal estates and smallholders at low external prices. In an export boom, however, it fails significantly to compress substantial plantation windfall profits and abnormally high village incomes. Thus the duty tends to destabilise producers' earnings over the export cycle. These undesirable effects can be considerably reduced under the proposed export tax schedules, with a cut‐off point to eliminate fiscal absorption at lower prices. However, the built‐in graduated rate structures will enable the government to mobilise greater excess agricultural resources during a price upswing. This serves not only to compensate for the tax losses through Marketing Boards' accumulations, but also to provide government revenue for rural improvement and development purposes.     

Trade liberalisation,market deregulation and agricultural performance in Central America

One frequently encounters the argument that trade liberalisation and deregulation of domestic markets in developing countries result in increased incentives for agriculture. This proposition is considered for the Central American countries, all of which passed through fundamental policy change either in the 1980s or 1990s. After characterising the policy regimes in each country over various periods, the analysis moves to an inspection of agricultural trade performance. The evidence indicates that liberalisation of foreign trade and deregulation of domestic markets has not been associated with improved agricultural performance. It is suggested that the failure of agriculture to respond positively to policy changes can be in part explained by an unfavourable trend in world prices of the region's major tradable commodities.     

Are pre‐schoolers from female‐headed households less malnourished? A comparative analysis of results from Ghana and Kenya

This article compares household income level and pre‐schooler weight‐for‐age across household groupings that are differentiated by female headship variables which are reflective of the heterogeneity of female‐headed households. Data from Kenya indicate that it is the interaction of income and female headship at low‐income levels which promotes pre‐schooler nutritional status. For Ghana, incomes have to be quite large (in the upper tercile of the distribution) before a reduction in the child's likelihood of having a low weight‐for‐age is achieved through further income increases. We argue that an absence of complementary child health inputs is more likely for households in the Ghana sample, and that in this type of environment, differences in nurturing patterns, as proxied by headship status, will have a muted impact on child nutrition.     

Regional Returns to Education,Child Labour and Schooling in India

We offer evidence from India that higher regional returns to primary education not only increase the likelihood that boys and girls attend school but also decrease the likelihood that they work. These relationships hold only for the top three quintiles of the income distribution and mostly for children in the age group 10–14 years. The former result suggests that liquidity constraints may not allow poorer households to respond to the economic benefits of education. Policies that raise the economic benefits of education may increase human capital investments in households that do not rely on their children's incomes for survival. However, low schooling and high child labour will persist among credit constrained families unless these households are provided with the economic ability to respond to these benefits.     

The Effect of Food Price Changes on Child Labour: Evidence from Uganda

Most people in developing countries spend up to 60 per cent of their income on food, even though the majority of them are farmers. Hence, a change in food prices affects both their revenue as well as expenditure, and it may thereby affect their labour market decisions. Using the Uganda National Panel Survey and monthly regional food prices, this paper examines the effect of changes in food prices on child labour. The empirical evidence shows that an increase in food prices is linked to an increase in the probability and the intensity of child labour. We find the effect of food price increases to be smaller among landowning households, which is consistent with the view that landowning households can better compensate for price shocks. The empirical results suggest that periodic shocks in food prices may have longer lasting effects on economic development in developing countries through the channel of child labour.     

Agricultural Commercialisation and Food Security in Rural Economies: Malawian Experience

This paper contributes to the debate on the nutrition-related outcomes of cash crop adoption by using a model with essential heterogeneity and a semi-parametric estimation technique. The model explicitly frames non-separability between production and consumption decisions of farming households providing an original test of separability. The empirical application is run using Malawian data. The results imply rational anticipations and decision process of agrarian households relative to the crop portfolio choice, disparate strength of market barriers faced by the farmers, non-separability between production and consumption decisions and a weak transmission from agricultural incomes to higher food expenditures and better diet.     

Farm productivity and rural poverty in India

Armed with new data, we return to an old question from the pages of this journal: to what extent do India's rural poor share in agricultural growth? Combining data from 24 household sample surveys spanning 35 years with other sources, we estimate a model of the joint determination of consumption‐poverty measures, agricultural wages, and food prices. We find that higher farm productivity brought both absolute and relative gains to poor rural households. A large share of the gains was via wages and prices, though these effects took time. The benefits to the poor were not confined to those near the poverty line.     

Employment of Displaced and Non-Displaced Households in Luhansk and Donetsk Oblasti

Abstract

This essay investigates the employment of displaced and non-displaced households in a region next to the conflict zone. We show that the casually observed average 0–5% difference in employment between displaced and non-displaced household heads conceals positive selection into displacement. Relative to locals, internally displaced persons are positively selected based on observable as well as unobservable factors. After controlling for personal characteristics, the structure of the household, location, non-labour incomes and endogeneity of displacement, heads of IDP households are still 20% less likely to be employed two years after resettlement.     

Private Transfers,Informal Loans and Risk Sharing Among Poor Urban Households in Ethiopia

In this paper we examine how households in poor urban areas manage risks by use of transfers and loans. Compared to the sizeable literature dealing with the rural poor the literature on the urban poor is limited. This paper attempts to fill this gap by using household survey data from urban Ethiopia. We find that whereas both instruments – private transfers and informal loans – help households augment low and uncertain incomes, only transfers respond to observable signals of vulnerability, thus likely serving risk sharing purposes, while loans are largely dictated by household demand and resource proxies, therefore smoothing consumption though lacking the risk sharing property.     

The Heterogeneous Effects of a Food Price Crisis on Child School Enrolment and Labour: Evidence from Pakistan

Using a panel survey, this paper investigates how food price increases in Pakistan in 2008–2010 affect children’s school enrolment and labour. The causal identification relies on the geographical variations in food (wheat) price. The results show that the negative impacts of food price increase on school enrolment differ by gender, economic status and the presence of siblings. The negative effects on school do not directly correspond to the increase in child labour because the transition from being idle to labour activity or from school to being idle is significant, particularly among poor girls. The results also show that children in households with access to agricultural lands are not affected by higher food prices. The analyses reveal a more dynamic picture of the impact of food price increase on child status and contribute to broader policy discussion to mitigate the impact of crises on child education.     

DISCUSSION - Agricultural Policy Reform and Rural Livelihoods in Central Mexico

This contribution examines the impact of profound changes to agricultural policy implemented since 1988 on the livelihoods of Mexico's rural population. Detailed studies in four villages show that rural incomes are very unevenly distributed within communities leaving half of households in poverty. During the last decade key factors affecting village economies have been international and national, rather than specific changes to farm policy. Most changes have been to the detriment of the communities studied, but peasant households have adapted and survived, at a price. If the worst fears about the consequences of economic liberalisation have not been realised, neither have the hopes. Depressed markets for basic goods and services have limited the growth of the rural economy. Private investment and provision of services have not been stimulated.     

Reinventing urban government in the Netherlands: an American perspective

National agricultural policies intended to stabilize farm price and income may have different impacts on different agricultural sector of a state or a region. A policy which influences a region's agriculture also may affect the general economy of that region, depending on the degree to which agriculture is linked to the general economy. This study evaluates the economywide impact of the Flexible Planting Program (FPP) -- a recent policy designed to encourage farmers to respond more to market than to the government incentives. The study employs an integrated modeling framework which links the national and state farm sectors to the region's non-farm sectors. Because of reductions in real U.S. market prices and, in turn, Tennessee market prices of some farm commodities under FPP, production of most agricultural outputs are expected to decline in Tennessee by 1995. Study results indicate that as a result of price reductions, the agricultural sector will lose about 15 percent of output, income, and employment. These losses cause significant negative impacts on the business-related service sector. The service sector suffers a loss of 31 million dollars in total output and 523 jobs. The total income lost by the service sector (18 million dollars) will be much higher than agriculture sector (11.99 million dollars). Thus, though the FPP may deliver its intended good at the national level, the policy has the potential to cause undesirable impacts on certain regions.     

Food Price Volatility and Vulnerability in the Global South: considering the global economic context

Abstract

Most official analyses of the recent food price crisis have focused on the market fundamentals of supply and demand for food as key explanatory factors. As a result, most of the policy recommendations emanating from the major international institutions include measures to boost supply and temper demand. In this paper I argue that international macroeconomic factors played a key role in fostering both price volatility and vulnerability, and as such they need to be recognised. With respect to the recent price volatility, the weak US dollar and speculation on agricultural commodities futures markets greatly influenced agricultural prices. With respect to price vulnerability, global economic forces played an important role in dampening production incentives in the world's poorest countries over the past 30 years, leading to a situation of food import dependence. Policy responses to the food crisis must consider the role of these broader international macroeconomic forces—both in the immediate context and their longer term impact.     

The economic and demographic determinants of international migration in Rural Egypt

This study uses data collected in rural Egypt to estimate a micro‐level model of the economic and demographic determinants of international migration. This model uses predicted income functions to establish origin incomes (incomes excluding remittances). Three findings are noteworthy. First, the results suggest that education may not necessarily be positively correlated with migration. Second, the data indicate that the relationship between income and migration is that of a flat, inverted U‐shaped curve. Third, when the combined effects of income and land are considered, males from poor and landless households have the highest propensity to migrate. Poverty and landlessness combine to push rural Egyptians to work abroad.     

Gender,Land and Sexuality: Exploring Connections

This article explores links between the issues of sexuality and gendered control over agricultural land. It discusses gendered land rights in several settings, concentrating particularly on agrarian and land reforms. I argue that land redistribution in the “household” model, discussed for Chile and Nicaragua, tends to entrench male household and agricultural control. In contrast, more collective forms, discussed for Vietnam, have displayed economic weaknesses but had potential to undercut such control by socialising women’s labour. Fears about and visions of female sexuality have much to do with backlashes against inclusion of women, either through allowing them membership of cooperatives and collectives or through granting rights such as joint titling to land. In sub-Saharan Africa, there currently exists much discussion of improving women’s control over agriculture and its products. These continue to meet opposition, despite female predominance in agriculture in the region. Thus, even though women work on the land in many societies, this does not give them any automatic “closeness” to nature or say within households. Control over women’s, especially wives’, labour within peasant households, is linked to the manner that their persons and their labour are bound up in this socio-economic form. The article also examines two feminist attempts to configure alternative agricultural forms: the case of a lesbian agricultural collective in the west of the USA and an Indian model of new female-centred households for single women. Heterosexuality as an institution and gender subordination more broadly, as the examples here indicate, have to do not only with sexual practices or identity but extend also to issues of labour and access to crucial resources.     

Sustainability Standards,Gender, and Nutrition among Smallholder Farmers in Uganda

Sustainability standards are gaining in importance in global markets for high-value foods. While previous research has shown that participating farmers in developing countries may benefit through income gains, nutrition impacts have hardly been analysed. We use survey data from smallholder coffee farmers in Uganda – certified under Fairtrade, Organic, and UTZ – to analyse impacts on food security and dietary quality. Estimates of instrumental variable models and simultaneous equation systems show that certification increases calorie and micronutrient consumption, mainly through higher incomes and improved gender equity. In certified households, women have greater control of coffee production and monetary revenues from sales.     

Industrial accumulation and living standards in the long‐run: The São Paulo industrial working class, 1930–75, part i*

This is the first of two articles attempting to contribute to the debate on trends in absolute real incomes amongst propertyless groups in semi‐industrialized countries. The empirical evidence presented in both articles is addressed to evaluating the long‐term trend in the standard of living of industrial working‐class households in one of the principal industrial centres of the capitalist periphery (the Brazilian city of Sao Paulo) between the mid‐1930s and the mid‐1970s. This first article contains a more analytical discussion of the principal factors affecting the living standards of non‐property‐owning groups in poor capitalist countries, experiencing rapid transformations within both their agricultural and industrial sectors. Following this, some of the principal problems which arise in measuring the living standards of poor people in developing countries are briefly reviewed, as well as the solutions adopted and the data sources used in this study of households in the city of São Paulo. This first article also presents some background evidence on changes over time in some of the principal characteristics of Sao Paulo working‐class households: household size, age and sex composition, labour force participation and the relative contribution of different household members to total household income.