There is growing interest within the climate change and development community in using seasonal forecast information to reduce the losses to agriculture resulting from climate variability, especially within food-insecure countries. However, forecast systems are expensive to establish and maintain, and therefore gauging the potential economic return to investments in forecast systems is crucial. Most studies that evaluate seasonal forecasts focus on developed countries and/or overlook agriculture’s economywide linkages. Yet forecasts may be more valuable in developing regions such as East Africa, where climate is variable and agriculture has macroeconomic importance. We use computable general equilibrium and process-based crop models to estimate the potential economywide value of national seasonal forecast systems in Kenya, Malawi, Mozambique, Tanzania, and Zambia. Stochastic seasonal simulations produce value distributions for forecasts of varying accuracy and varying levels of farm coverage. A timely and accurate forecast adopted by all farmers generates average regional income gains of US$113 million per year. Gains are much higher during extreme climate events and are generally pro-poor. The forecast value falls when forecast skill and farm coverage decline. National economic and trading structures, including the importance of agricultural exports, are found to be major determinants of forecast value. Economywide approaches are therefore needed to complement farm-level analysis when evaluating forecast systems in low-income agrarian economies.

This paper uses panel data on 46 African countries from 2001 to 2014 to estimate the impacts of the Comprehensive Africa Agriculture Development Programme (CAADP), an agriculture-led integrated framework of development priorities in Africa, on agricultural expenditure and productivity, income, and nutrition. A difference-in-difference treatment-effects model (based on when a CAADP compact is signed and the level of CAADP implementation reached) and different estimation methods and model specifications are used. The results show that CAADP has had a positive impact on agricultural value-added and land and labor productivity. The impact on agriculture expenditure is generally negative, suggesting that there is a substitution effect between the government’s own funding and external sources of funding for the sector. The estimated impact on income and nutrition is generally insignificant. There are some puzzling results from the interaction between specific period of compact signing and level of implementation reached. Implications for maintaining the positive impacts, as well as for further research to understand the puzzling results, are discussed.

It has been apparent for more than a century that future economic progress in agriculture will be driven by the invention and application of new technologies resulting from expenditure in research and development (R&D) by governments and private firms. Nevertheless, it is conventional wisdom in the economic development literature that there is a significant underinvestment in agricultural R&D in developing countries. Evidence supporting this belief is provided, first by a vast literature showing returns on R&D expenditure to be so high as to justify levels of investment in multiples of those actually found, and second, from available data showing low research effort in developing countries as measured by the intensity ratio (IR), that is, the percentage of agricultural gross domestic product invested in agricultural R&D (excluding the for-profit private sector). This paper argues that the IR is an inadequate indicator to measure and compare the research efforts of a diverse group of countries and proposes an alternative index that allows meaningful comparisons between countries. The proposed index can be used to identify potential under-investors, determine intensity gaps, and quantify the R&D investment needed to close these gaps by comparing countries with similar characteristics. Results obtained using the new R&D intensity indicator with a sample of 88 countries show that the investment effort in developing countries is much higher than the one observed using the conventional IR measure. The new measure finds that countries like China, India, Brazil, and Kenya have similar levels of R&D intensity to those in the United States. To close the R&D intensity gap measured by the new index, developing countries will need to invest US$7.1 billion on top of the $21.4 billion invested on average during 2008–2011, an increase of 33 percent of total actual investment.

The extent of market integration and transmission of food price shocks is a major determinant of price stability and overall food security, particularly in developing countries. Few studies have examined these issues for countries in Central Asia, however. This paper aims to fill this gap by examining wheat market integration and price transmission in Tajikistan, the most food-insecure country in Central Asia. In particular, in this study we measure how well wheat market prices in Tajikistan are integrated with international and regional markets, as well as domestically with each other. Subsequently, we assess the nature of price transmission between these markets. Using horizontal price transmission analysis and asymmetric price relationships, a.k.a. rockets and feathers, we demonstrate how prices change in peripheral food-shortage markets compared to markets located in zones with abundant local production.

Over the past 25 years, economic growth rates in many developing countries have outpaced those in industrialized countries, and per capita incomes of these two groups of countries have started to converge. Growth in developing countries contributed to a dramatic drop—from 37 percent to 13 percent—in the global extreme poverty rate between 1990 and 201. However, the global economic outlook has deteriorated recently. This paper examines the impact of the actual and projected slowdown in the world economy since 2012 on the poor and on the potential for achievement of the Sustainable Development Goals (SDGs). It builds on the changes between 2012 and late 2015 in the International Monetary Fund’s World Economic Outlook projections to provide the basic slowdown scenario. It then uses a global model to assess the impacts of lower rates of productivity growth and consequent lower savings and investment on key price and income variables. The productivity shocks are passed directly to the production activities included in household microsimulation models for almost 300,000 households. These households are also affected by the modeled changes in prices and wages. Simulations allow us to assess the impacts of the slowdown on the real household incomes of the poor, and hence on the poverty rate. The results suggest that the poorest countries will see the greatest slowdown in poverty reduction, with over 5 percent of their population projected to remain below the poverty line. Overall 38 million fewer people will leave extreme poverty compared to earlier projections. Farm households are at particular risk in middle-income countries, with over 1.5 percent more of the farming population potentially not escaping extreme poverty in these countries. By 2030, average extreme poverty in rural areas is now projected to be about 7.5 percent, rather than 7.1 percent. While substantial poverty reduction is still expected between now and 2030, a strong focus on policies for poverty reduction will be vital to achieving the first SDG goal of eliminating poverty.

This paper reviews, from the perspective of developing countries, the recent agreement reached at the 10th WTO Ministerial at Nairobi related to export competition, including exports subsidies, food aid, export credits and guarantees, and state trading enterprises (STEs). The legal and economic aspects of the agreement are examined, and the relevance of banning agricultural export subsidies are noted. This eliminates some of the worst-case scenarios, if agricultural world prices continue to soften and the important margin of export subsidies still allowed under the WTO framework was to be used. But given the relatively longer transition period for some relevant products before export subsidies are completely banned, the paper argues for continued monitoring of the potential use of this instrument. The paper also discusses the other components of export competition, looking into the legal and economic aspects. Some suggestions about continuous work on transparency and monitoring of current practices, and further disciplines are also presented.

Rising prices and declining consumption of pulses cause concern in terms of both nutrition and food inflation in India. This paper outlines policy strategies to increase the availability of pulses at affordable prices in India and also points out limitations of some of the most common recommendations for achieving these objectives. There seems to be no option but to increase domestic production of pulses in India. The global supply of pulses is limited compared with India’s needs, and sizable imports by India are bound to increase world prices. Domestic production of pulses in India is most likely piecewise inelastic, meaning that small price increases do not translate into a significant supply response. Because farmers face both production and marketing risks, they increase pulse area and intensify production only when there is a large increase in expected prices that covers the risk premium. Droughts, too, are a major risk for pulses. Access to one or two protective irrigations during the growing season can possibly lead to sizable increases in pulse production and reduce the production risk. The har khet ko paani (assured irrigation) initiative under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) program should give priority to pulse-producing areas. The minimum support price (MSP) for pulses, without direct government procurement, helps traders more than farmers because it acts as a focal point for tacit collusion among traders. Farmers will benefit from the MSP only if it is raised substantially from its current levels. The increase in farmgate prices due to a higher MSP will not necessarily lead to an increase in the retail price of pulses because much of the wedge between farmgate prices and consumer prices is traders’ margin. Including subsidized pulses in public distribution systems can save households some money, but it has only a small effect on total consumption of pulses and almost no effect on total protein intake. We suggest, as more potent solutions, investing in research and extension for pulses, aggregating pulse growers into farmer producer organizations, and paying pulse growers or pulse-growing areas for the ecosystem services offered by pulses.