Markets and pro-poor agricultural growth: insights from livelihood and informal rural economy models in Malawi

This article presents the development of a set of programming models describing the major features of different rural livelihoods and of the informal rural economy they together make up in Malawi. The models allow for differentiated responses by different household types to change and for the partial equilibrium effects of consequent supply, demand, and price adjustments in labor and grain markets. The models provide insights into the relations between own‐farm and nonown‐farm activities in different households' livelihoods and in the informal rural economy as a whole, and are used to investigate possible impacts of increasing cash crop prices and of a more open rural economy. Impacts of these changes on the poor are found to be critically dependent upon supply and demand elasticities in labor and grain markets, but the poor could potentially suffer significant losses from increased openness of the local economy leading to increased expenditure by less poor households on imported goods and services.     

Robustness as a corporate objective under uncertainty

This paper examines the nature of the objective function of the firm when operating under conditions of uncertainty. Robustness is presented as a purposeful maximand for decision making both under conditions of certainty and uncertainty - a robust decision being one in which the decision maker retains the maximum flexibility with regard to future decisions after an initial decision has been made. Its incorporation within a managerial objective function provides a measurable scale for making choices between alternative courses of action, including under conditions of internal organizational conflict and environmental reaction by other decision makers.     

Modelling embedded risk in peasant agriculture: methodological insights from northern Malawi

Using a linear-programming model of farming systems in northern Malawi, the conditions under which peasant farm-household models may need to allow for embedded risk are investigated, Tactical, sequential responses to uncertainty are found to be more important to labour-scarce households with limited access to capital and to credit markets. Compared with semi-sequential programming, discrete stochastic programming (DSP) provided more efficient solutions for problems involving embedded risk. There may be intuitive advantages in presenting results from DSP models in terms of a semi-sequential strategy.     

The Effects of Transaction Costs,Power and Risk on Contractual Arrangements: A Conceptual Framework for Quantitative Analysis

Increased reliance on commercial traders in liberalised agricultural markets poses questions about the nature of contractual relations between traders and farmers; about welfare, efficiency and equity characteristics of these relations; and about conditions necessary for traders to engage in these markets. A new institutional economics analysis seeks to understand the institutions that affect transaction costs and risks for each party, and power relations between them. Transaction cost analysis has not, however, developed a unifying conceptual or quantitative framework to integrate these issues. This paper develops a methodology for modelling negotiated choice of contractual arrangements in buyer/seller relationships, taking account of the socioeconomic characteristics of each party, economic and technical characteristics of the commodity, and the institutional environment. The model is setup as a non‐linear programming problem. The approach provides a framework for the application of transaction cost economics to quantitative empirical study of markets, to individual firms' supply chain decisions, and to the analysis of policy interventions in markets.     

Where are the best opportunities for reducing greenhouse gas emissions in the food system (including the food chain)? A comment

In a recent paper Garnett (2011) examines the greenhouse gas emissions arising from the global food system. This paper builds on Garnett’s contribution by considering how high levels of food waste contribute to the food chain’s greenhouse emissions and how they can be reduced, something Garnett generally overlooks. The emissions that arise from food waste represent the emissions embedded in the production of food that is then wasted and the emissions that arise from the process of waste disposal. Food waste can also be split into pre-consumer and consumer waste. These distinctions give rise to four categories of food waste related emissions: pre-consumer embedded, pre-consumer waste disposal, consumer embedded and consumer waste disposal emissions. The levels of food waste in each category differ between economies, as do the causes of wastage. Policies to address food waste and the associated emissions need to promote a mixture of technological and behavioural change and be tailored to the economic, cultural and technological conditions in each country.     

State intervention for food price stabilisation in Africa: Can it work?

Although its arguments may have more general applicability, this paper discusses the desirability and options for the stabilisation of staple food prices principally in Eastern and Southern Africa. It addresses three broad questions: (i) why is stabilisation of food (grain) prices desirable? (ii) what is technically feasible? and (iii) can the governance and trade issues thrown up by suggested mechanisms be solved? It considers a number of options for price stabilisation, assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate.