Indian farmers’ valuation of yield distributions: Will poor farmers value ‘pro-poor’ seeds?

Potential poverty traps among the rural poor suggest a need to reduce poor farmers’ vulnerability by stabilizing crop yields and limiting yield losses. Advances in biotechnology will help address this need directly with crops that tolerate climate fluctuation or resist biotic stresses. Evaluating ex ante how farmers will value these ‘pro-poor’ seeds is important for delivery design, but also challenging. This paper describes an experimental economic approach to understanding farmers’ valuation of such seeds. Using data from a survey and experiment, I assess Indian farmers’ valuation of changes in the mean, variance, and skewness of payoff distributions. These farmers value increases in expected value, but seem indifferent about higher moment changes in payoff distributions. Farmer traits such as wealth and risk exposure affect their valuation of these changes only mildly. While various limitations to the experimental approach must qualify practical implications of these findings, the experiment demonstrates the viability of conducting valuation experiments with open-ended questions in developing countries.     

Auction Reforms for Effective Official Development Assistance

Auctions, which are applicable to aid-related procurement systems, have been recently recognized as an important tool for improving economic efficiency. Using data on procurement auctions for Japanese official development assistance projects, the equilibrium bid function is estimated. The data reveals that a 1% increase in the number of bidders decreases the equilibrium bid by about 0.2%. This implies that strengthening competition at procurement auctions lowers contract prices and mitigates the heavy indebtedness of developing countries. Auctions are also instrumental in fostering local business environment and governance. For intensifying bidding competition, it is useful to introduce an electronic bidding system, encourage local firms to jointly bid, and relax excessive qualification requirements.     

Getting rid of trans fats in the US diet: Policies, incentives and progress

Artificial trans fats in foods increase chronic disease risk in the US population. Federal nutrition label regulation enacted in 2003 requires mandatory disclosure of trans fat content on packaged foods. This action created incentives for the food industry to reduce trans fats both in response to consumer demand and through competition to maintain product reputation. Subsequent public actions include a ban on trans fat use in New York city restaurants and lawsuits against food companies, which created further incentives to remove trans fats, especially in the food service industry. Industry has reformulated packaged foods and found substitutes for restaurant fry oils and trans fats are disappearing from the US food supply. Market response extends throughout the supply chain, and has spurred research to alter oilseed crop characteristics. The widespread and relatively rapid industry response likely has improved the quality of US diets, and demonstrates the potential for policy actions to spur such improvements.     

Are consumers at the base of the pyramid willing to pay for nutritious foods?

Base of the Pyramid (BoP) consumers living in the urban informal settlements of developing countries spend over 60% of their income on food, yet malnutrition and micronutrient deficiency remain widespread among these populations, pointing to the inadequacy of the foods they consume in terms of quality and quantity. In this paper we examine BoP consumers’ willingness to pay (WTP) for nutritious multi-composite porridge flour (improved flour) in the informal settlements of East Africa. The analysis is based on experimental data collected from 600 households in the informal settlements of Kampala, Uganda and Nairobi, Kenya (300 in each country) in 2016. We use Tobit regression models to analyse determinants of WTP for the improved porridge flour. Results show that both Kenyan and Ugandan BoP consumers are willing to pay a premium for the improved porridge flour. In addition, providing nutrition information about the flour, characteristics of household head, economic status of the household, and presence of young children between six and 59 months in the household, influence WTP for the safe and nutritious porridge flour. The paper concludes by providing recommendations for enhancing nutrition among poor consumers in the informal settlements of developing countries.     

From punishment to prevention: A French case study of the introduction of co-regulation in enforcing food safety

In the last decade, the concept of co-regulation has been developed and increasingly promoted as an important instrument of regulation. In the context of food safety, we examine co-regulation programs from the point of view of an enforcement agency. We develop a conceptual framework of enforcement of food safety regulation for use in assessing the degree of shift toward co-regulation from traditional approaches and apply it to a case study of the French import market for produce at Perpignan. We find that co-regulation in the enforcement of pesticide residue limits resulted in a change of practices for the regulatory agency from punishment to prevention based on incentives and information programs.