Economic Liberalization and Smallholder Productivity in Tanzania. From Promised Success to Real Failure, 1985–1998

In the mid-1980s, Tanzania adopted a programme for economic liberalization of the entire economy, including agriculture. After pressure from the IMF and the World Bank in particular, but also from most of the bilateral donors, agricultural producer and input prices were decontrolled, panterritorial prices were abolished, subsidies were removed and trade in agricultural products and inputs was to a large extent taken over by private traders. The international donor community promised that economic liberalization would provide a strong stimulus to Tanzanian agriculture, resulting in increasing yields, increased labour productivity, rising agricultural production and higher incomes. However, available data show that, as far as food crop production is concerned, this promise has not been fulfilled. Even compared to the 'crisis years' 1979–1984, labour productivity, yields and production per capita of food grains stagnated or declined up to the end of the 1990s. Some causes of this failure are discussed.     

Agricultural technology and land use futures: The UK case

This paper explores how agricultural technology has interacted with recent land use in the UK and how it might do so in the next 50 years. From 1960 to 1985, farmers successfully used technology to increase the output of crop and animal products per unit of land and particularly of labour. This reduced the number of people employed in agriculture, and promoted larger and more specialised farm enterprises. Between 1985 and 2006, food prices were relatively low, and although labour productivity continued to increase, land productivity remained relatively static. However during this period, farmers started to address the effects of agriculture on reduced water quality and habitat loss.For established agricultural products, technological innovation tends to have an incremental effect, working through genetic improvement, the removal of abiotic and biotic stress (e.g. crop nutrition and protection, irrigation and drainage, and animal nutrition, health and housing) and the substitution of labour. Whereas the first two processes tend to be scale-neutral, the substitution of labour is usually easiest to achieve on larger farms. Other key areas for technological innovation include addressing air, soil and water quality, biodiversity, waste reduction, and information management. Over the next 50 years, large step-changes in land use arising from agricultural technology are predicted to arise from the development of new markets for agricultural products. A strong bioenergy sector will strengthen the links between crop commodity and energy prices and will have a major effect on future land use. Climate change and the regulation of greenhouse gas emissions will alter the relative profitability of crop and animal production systems. Lastly, increased public awareness of the links between food, health and the environment could substantially shift the demand for specific agricultural products.Continual improvements in agricultural technology are pivotal to providing society with the flexibility to balance the challenges of improving human well-being with the management of the planet's ecosystem. Increased technological innovation increases the probability that agricultural land can be used for other purposes, but the exact relationship is dependent on trade and environmental policies. The large external effects of agriculture mean that decisions regarding the adoption of future technologies should be taken by farmers working with other stakeholders.     

The economic role of Russia's subsistence agriculture in the transition process

In this article, we analyze the role of subsistence‐oriented agriculture in Russia in the 1990s. We start out by discussing the diverging economic effects of the growth of subsistence agriculture in Russia since the transition process started. The quantitative analysis of this sector's role is carried out by means of an applied computable general equilibrium (CGE) model applying a 1994 social accounting matrix (SAM) as base year data. The novelty of the article is to disaggregate primary agricultural production not by products but by farm types, which enables us to distinguish their institutional and economic characteristics. The model also explicitly differentiates between marketed and subsistence consumption or formal and informal marketing activities of agricultural producers. We simulate two ex post and two ex ante experiments. The results of the first backward‐looking experiment highlight that Russia's subsistence agriculture was an important buffer against further agricultural output declines during transition and, hence, against food insecurity. A simulation, which looks into the effects of a devaluation of the Russian ruble, shows that the financial crisis should have increased the relative competitiveness particularly of large‐scale crop farms versus small‐scale farms. Two forward‐looking experiments indicate that efficiency enhancing institutional change would benefit both large‐scale and small‐scale farms. However, within small‐scale agriculture, a shift from subsistence to commercial agriculture would take place.     

On Why Agriculture Declines with Economic Growth

When economic growth is characterised by a slow rise in the demand for food and rapid growth in farm relative to non-farm productivity, it is understandable that agriculture in a closed economy declines in relative terms as that economy develops. But why should agriculture decline in virtually all open growing economies as well, including those able to retain a comparative advantage in agricultural products? A key part of the answer is that the demand for non-tradable goods tends to be income elastic, so resources are diverted to their production even in open economies.     

CHANGES IN THE TERMS OF TRADE FOR AGRICULTURE: NEW PLATEAU OR NEW PRECIPICE*

This paper looks at the recent boom in agricultural commodity prices to see to what extent the changes these prices reflect are of a structural rather than short term nature. It concludes that they are essentially short term: a lagged supply response to the agricultural depression of 1970 and 1971; the coincidence of normal commodity cycles for several commodities; an unusual coincidence of adverse seasonal conditions in major producing areas, particularly the U.S.S.R.; and an unprecedented upswing in world economic activity. Nevertheless, there are a number of factors which suggest that, other than possibly in short term disequilibrium situations, agricultural commodity prices will not decline to previous levels: worldwide inflation; redirection in world agricultural support policies; and the energy crisis. Many of these factors win also influence prices of manufactured goods and hence the terms of trade. After considering the problems of world food supplies and continued growth in world population, the paper suggests that there is little evidence of a major structural change in the market for agricultural commodities. Rather, it points to a return to the previous situation where there is a slight tendency for the terms of trade to move against agriculture.     

The Food Crisis,Industrialized Farming and the Imperial Regime

This paper argues that the food crisis cannot solely be equated with abrupt food price increases or seen as merely market induced. The unprecedented price increases of the first half of 2008, and the extremely low prices that followed, are expressions of a far wider and far more persistent underlying crisis, which has been germinating for more than a decade. It is the complex outcome of several combined processes, including the industrialization of agriculture, the liberalization of food and agricultural markets and the rise of food empires. The interaction of these processes has created a global agrarian crisis that has provoked the multifaceted food crisis. Both these crises are being accelerated through their interactions with the wider economic and financial crisis.     

Impacts of prices and transactions costs on input usage in a liberalizing economy: evidence from Tanzanian coffee growers

Despite improvements in production incentives, agricultural output in Africa remained sluggish through the 1990s. Low use of purchased inputs may be part of the cause of persistently low productivity in African agriculture. This article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among Tanzanian coffee growers. A sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions. Travel costs in input and output markets have distinct effects on input usage, implying distinct avenues for interventions to promote more intensive use of agricultural inputs.     

International trade and agricultural development in developing countries: Significance of the Uruguay Round of GATT negotiations

Liberalization of world trade in agricultural products ranks high on the agenda of the Uruguay Round. After a period of more than six years, however, the negotiations have not been concluded. Nevertheless, an outcome seems to be in sight. The agreement will most likely not result in a move to freer trade. It seems that domestic policies will become even more regulative than in the past in an attempt to cut exportable surpluses and to ease trade tensions among the main exporting nations. This paper explores possible impacts of the GATT Round on agricultural development in developing countries. Agricultural development is more than only growth in agricultural production or productivity. However, it is argued in the paper that other variables which also indicate agricultural development are often closely correlated with growth in production and productivity. Trade in agricultural products is not always an engine for agricultural development. If internal divergences are not accounted for by appropriate domestic policies, trade may be even harmful to agricultural development. Hence, empirical research based on cross-country analysis does not provide a clear answer about the role of trade for development. Past policies in industrialized countries have most likely had a negative effect on developing countries as a group; however, the effects differ widely across countries. Liberalization policies in industrialized countries would not just reverse these negative effects for developing countries. Price reduction in industrialized countries may not result in the often-cited production decline in the short term. Present X-inefficiency in agriculture will be reduced by liberalization, leading to an outward shift of the supply curve. Hence, liberalization may not lead to higher world market prices for temperate-zone products in the short and medium term. Apart from this, empirical models differ widely in the price effects they predict. The expected outcome of the Uruguay Round – increased regulation of domestic policies – is likely both more negative for developing countries than past protectionist policies and worse than an overall liberalization. World market prices will increase, uncertainty and instability can be expected to grow, and food aid may become less available. There will be a need to react to these challenges with measures on the international and national level. Initiatives to deal with food crises in developing countries and to stimulate liberalization in developing countries should be considered. Finally, developing countries should be made aware that their own domestic policies have a much greater economic impact than policies in other countries, even if the latter are as protectionist as current agricultural policies in the industrialized world.     

Agriculture and climate change in global scenarios: why don't the models agree

Agriculture is unique among economic sectors in the nature of impacts from climate change. The production activity that transforms inputs into agricultural outputs involves direct use of weather inputs (temperature, solar radiation available to the plant, and precipitation). Previous studies of the impacts of climate change on agriculture have reported substantial differences in outcomes such as prices, production, and trade arising from differences in model inputs and model specification. This article presents climate change results and underlying determinants from a model comparison exercise with 10 of the leading global economic models that include significant representation of agriculture. By harmonizing key drivers that include climate change effects, differences in model outcomes were reduced. The particular choice of climate change drivers for this comparison activity results in large and negative productivity effects. All models respond with higher prices. Producer behavior differs by model with some emphasizing area response and others yield response. Demand response is least important. The differences reflect both differences in model specification and perspectives on the future. The results from this study highlight the need to more fully compare the deep model parameters, to generate a call for a combination of econometric and validation studies to narrow the degree of uncertainty and variability in these parameters and to move to Monte Carlo type simulations to better map the contours of economic uncertainty.     

The Current State of the Russian Agricultural Sector

Russia's agriculture produces around 3.7 per cent of the country's GDP, employs 9.2 per cent of the national workforce and contributes around 6 per cent of the country's exports. The sector has shown remarkable resilience in the face of wider economic turbulence. Self‐sufficiency rates for the main agricultural commodities are relatively high. Agricultural exports have grown very significantly since 2000 especially for wheat and meslin (wheat and rye mixture). Meat production has been growing steadily, particularly in the poultry and pork sectors. Whilst the agri‐food sector has great potential to play an even more prominent role in Russia's economy, it suffers from relatively low productivity and an outdated technological base. The main drive for efficiency has come mainly from the relatively large‐scale agricultural firms, who generated more than half of the total value of agricultural output in 2016. Foreign policy instability, including economic sanctions, the devaluation of the national currency and declining economic growth have weakened the sector and caused an increase in the prices of imported goods and equipment. At the same time Russian products have replaced high value‐added imports and Russia's agricultural producers are expanding into new markets.     

Global food demand,productivity growth,and the scarcity of land and water resources: a spatially explicit mathematical programming approach

In the coming decades, an increasing competition for global land and water resources can be expected, due to rising demand for food and bio‐energy production, biodiversity conservation, and changing production conditions due to climate change. The potential of technological change in agriculture to adapt to these trends is subject to considerable uncertainty. In order to simulate these combined effects in a spatially explicit way, we present a model of agricultural production and its impact on the environment (MAgPIE). MAgPIE is a mathematical programming model covering the most important agricultural crop and livestock production types in 10 economic regions worldwide at a spatial resolution of three by three degrees, i.e., approximately 300 by 300 km at the equator. It takes regional economic conditions as well as spatially explicit data on potential crop yields and land and water constraints into account and derives specific land‐use patterns for each grid cell. Shadow prices for binding constraints can be used to valuate resources for which in many places no markets exist, especially irrigation water. In this article, we describe the model structure and validation. We apply the model to possible future scenarios up to 2055 and derive required rates of technological change (i.e., yield increase) in agricultural production in order to meet future food demand.     

The Evolution and Implications of the U.S. Food Security Act of 1985

The Food Security Act of 1985 sets the United States (U.S.) policy course for the five years, 1986–1990, in the areas of farm product prices and farmer incomes, agricultural production, food aid, and trade in agricultural products. It is clearly an evolution of past policy, deeply rooted in the institutional processes of participatory policymaking. The Act will have important implications for not only domestic producers, consumers, agribusinesses, and taxpayers, but alto product agricultural exporters and importers around the world. Just as it was substantially, affected by the current loss of export markets and the economic crisis in the U.S. agricultural sector, its implementation and impacts will be affected in the future by the unpredictable weather, macroeconomic conditions around the world, and international trading policies. This article examines the development of the policy embodied in the Act and analyzes its primary economic implications. Although most provisions of the U.S. agricultural price and income policy that had evolved over the past half century were continued, important changes were made. The resulting policy closely mirrored the preferences revealed from research concerning farmers and leaders of national agricultural and food interest groups. Primary changes from the previous 1981 Act were: lengthening the duration to five years; substantial lowering of the minimum price support levels; permitting a gradual decline in the minimum target prices; providing for a whole dairy herd buyout program; establishing export enhancement initiatives through credit, promotion, and export payment-in-kind (PIK); and initiating major efforts to increase farmland conservation and withdrawal of fragile lands from production. Likely implications of the new Act include: (1) lower product prices for agricultural producers around the world, and also farmer incomes if there is no income protection from national policies; (2) a similar but a less proportionate impact on consumers; (3) a substantial burden on the U.S. Treasury, and possibly those of the other nations as well, depending upon the type of policies followed; and (4) likely intensification in the immediate future of the economic conflicts and negotiations between major agricultural trading nations of the world. Research played a vital role in the development of the U.S. 1985 Act. Given the turbulent, uncertain, and important nature of the agricultural and food sector in the world, research is challenged to provide more and better knowledge for future policymaking.     

The future of agriculture and society in Iowa: four scenarios

Iowa is a leader in crop and livestock production, but its high productivity has had concomitant negative environmental and societal impacts and large requirements for fossil-fuel-derived inputs. Maintaining agricultural productivity, economic prosperity and environmental integrity will become ever more challenging as the global demand for agricultural products increases and the resources needed become increasingly limited. Here we present four scenarios for Iowa in 2100, based on combinations of differing goals for the economy and differing energy availability. In scenarios focused on high material throughput, environmental degradation and social unrest will increase. In scenarios with a focus on human and environmental welfare, environmental damage will be ameliorated and societal happiness will increase. Movement towards a society focused on human and environmental welfare will require changes in the goals of the economy, whereas no major changes will be needed to maintain focus on high throughput. When energy sources are readily available and inexpensive, the goals of the economy will be more easily met, whereas energy limitations will restrict the options available to agriculture and society. Our scenarios can be used as tools to inform people about choices that must be made to reach more desirable futures for Iowa and similar agricultural regions.     

The impact of coffee price changes on rural households in Uganda

Employing household survey data covering the periods 1992–1993, 1995–1996, and 1999–2000, this article shows for the case of Uganda that a coffee market liberalization followed by a price boom was associated with substantial reductions in poverty, which could even be sustained when prices went down again. Coffee is not planted by the richest farmers and the gains from higher coffee prices accrued to poorer and richer coffee farmers alike. Nor were poorer farmers hurt disproportionately when prices fell. In addition, we find strong spillovers from coffee production to other agriculture, which tends to favor the poor, and to nonagricultural activities. These multiplier effects are concentrated in coffee regions. In an economic environment characterized by a booming agricultural sector, coffee farmers were able to accommodate the negative price shock, in particular through agricultural diversification. General agricultural growth also cushioned possible negative multiplier effects in coffee regions. Overall, the case of coffee in Uganda thus lends support to the view that agricultural trade liberalization is beneficial for the poor.     

Navigating the perfect storm: reflections on the food,energy, and financial crises

The closely interlinked food, energy, and financial crises pose a significant new challenge to the global effort to reduce poverty. In 2008, food prices rose sharply in many countries, and global poverty and hunger levels increased quite markedly. The good news is that the agricultural supply response in many countries was also strong. The impacts of the financial crisis on poor countries have yet to fully roll out, but it is clear that more people have fallen into poverty and more are suffering from hunger. Lastly, there are strong indications that the global food system is fundamentally changing in a number of dimensions. Biofuels are here to stay, and energy and food prices appear to have adjusted to a higher equilibrium and will in turn raise the prospects of renewed volatility in agricultural commodity markets. Trade protection has also resurfaced, but so have renewed investments in agriculture. These fundamental shifts bring with them opportunities and risks that require internationally coordinated responses with strong national buy‐in, as well as timely and relevant research.     

Agricultural Policy in Tropical Africa: is a Turnaround Possible?

The food crisis in Africa has entered our living rooms through television and the press. Why is per capita agricultural production lower now than at independence in the early 1960s? This article examines the factors responsible and outlines some solutions. Both external and internal factors have converged to create the crisis - low prices to farmers to placate vocal urban consumers, inefficient, high-cost marketing boards, governments' neglect of agriculture in favor of industry, over-valued exchange rates, lack of foreign exchange and increasing debt burdens. Externally the depressed world market decreased demand for Africa's exports and contributed to the stagnation of the economics. Drought, a population growth rate approaching 3%/year and a shortage of human capital added to the crisis.     

Conditioning trends shaping the agricultural and rural landscape in Africa

African countries continue to face deepening food crises that have been accentuated by the global food, energy, and financial crises. This situation is part of a long‐term structural problem: decades of under‐investments in agricultural sector and poor policies of support for smallholder farmers who form the bulk of the farming population. The inability of these farmers to achieve a supply response when commodity prices were high and market access was less of a problem suggests that there are multiple sets of binding constraints that continue to limit the potential of agricultural growth to reduce food security and poverty on the continent. This article reviews some of the historical trends that have hampered the performance of the agriculture sector. In addition, it reviews the impacts of more positive trends that could stimulate agricultural growth in Africa that could change the African agricultural landscape. The article however warns that there are more recent global developments and some continental challenges that could prevent or slow agricultural growth. These include the global financial crisis, public sector investments, inequities in global agricultural development policies, rush for agricultural lands by foreign investors, domestic commercial financing markets, climate change, and emerging carbon markets. The article argues that while opportunities for accelerated growth exists for African agriculture, new sets of policy instruments will be needed to support smallholder farmers to access new agricultural technologies, finance, reduce impacts of climate change, and adopt sustainable land use practices that can allow them to benefit from emerging global carbon markets.     

农业科技资源与农业经济发展的关系研究——以东部地区为例

农业科技资源是实现农业经济发展方式转变和农业经济可持续发展的重要因素,发展现代农业也迫切需要将农业科技资源与农业经济的发展有机结合起来。文章以研究农业科技资源与农业经济的关系为出发点,首先分析经济视角下农业的发展模式,了解到农业是温室气体的排放源之一,因此采用低耗能、低排放和零污染的发展模式对农业经济发展进行改造,实现农业的生产离不开科技资源,引用高科技技术、设备对促进农业经济发展至关重要。其次利用灰色关联度分析法对农业科技与农业经济之间的关联关系进行评价研究,从农业科技授予专利数量、农业新品种的数量以及农业科技论文数量等角度阐述科技对于农业经济发展的重要性及影响力,指出其为促进农业经济增长的先决条件,为实现农业化发展、改善农业发展结构提供科技保障。     

Why do global long‐term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison

Recent studies assessing plausible futures for agricultural markets and global food security have had contradictory outcomes. To advance our understanding of the sources of the differences, 10 global economic models that produce long‐term scenarios were asked to compare a reference scenario with alternate socioeconomic, climate change, and bioenergy scenarios using a common set of key drivers. Several key conclusions emerge from this exercise: First, for a comparison of scenario results to be meaningful, a careful analysis of the interpretation of the relevant model variables is essential. For instance, the use of “real world commodity prices” differs widely across models, and comparing the prices without accounting for their different meanings can lead to misleading results. Second, results suggest that, once some key assumptions are harmonized, the variability in general trends across models declines but remains important. For example, given the common assumptions of the reference scenario, models show average annual rates of changes of real global producer prices for agricultural products on average ranging between ?0.4% and +0.7% between the 2005 base year and 2050. This compares to an average decline of real agricultural prices of 4% p.a. between the 1960s and the 2000s. Several other common trends are shown, for example, relating to key global growth areas for agricultural production and consumption. Third, differences in basic model parameters such as income and price elasticities, sometimes hidden in the way market behavior is modeled, result in significant differences in the details. Fourth, the analysis shows that agro‐economic modelers aiming to inform the agricultural and development policy debate require better data and analysis on both economic behavior and biophysical drivers. More interdisciplinary modeling efforts are required to cross‐fertilize analyses at different scales.     

Potential of woody biomass production for motivating widespread natural resource management under climate change

In this study we assessed the potential of woody biomass (short-rotation Mallee Eucalypts) for renewable energy generation as an economically viable way of motivating widespread natural resource management under climate change in the 11.9 million ha Lower Murray agricultural region in southern Australia. The spatial distribution of productivity of agricultural crops and pasture, and biomass was modelled. Average annual economic returns were calculated under historical mean (baseline) climate and three climate change scenarios. Economically viable areas of biomass production were identified where the profitability of biomass is greater than the profitability of agriculture under each scenario for three factory gate biomass prices. The benefits of biomass production for dryland salinisation, wind erosion, and carbon emissions reduction through biomass-based renewable energy production were also modelled. Depending on climate scenario, at the median price assessed ($40/tonne) biomass production can generate $51.4–$88 M in annual net economic returns, address 41,226–165,577 ha at high risk of dryland salinisation and 228,000–1.4 million ha at high risk of wind erosion, and mitigate 10.4–12 million tonnes of carbon (CO₂^−e) emissions annually. Economically viable areas for biomass production expanded under climatic warming and drying especially in more marginal agricultural land. Under the baseline, the area at high risk of dryland salinisation was more than double that at high risk of wind erosion. However, under climatic warming and drying the relative importance of these two natural resource management objectives switched with the area at high risk of wind erosion becoming much larger. As biomass production can achieve multiple natural resource management objectives, it may provide a land use policy option that is adaptable to changing priorities and economically resilient given climatic uncertainties. For such a significant and enduring land use change policy it is prudent to assess both the economic and environmental potential under climate change.