Estimating the impact of farmer field schools in sub‐Saharan Africa: the case of cocoa

This study measures the economic impact of the first phase of the Cocoa Livelihood Program (CLP‐I), a current World Cocoa Foundation (WCF) project, sponsored by the Bill and Melinda Gates Foundation and aimed at improving the livelihood of over 200,000 small cocoa producers in sub‐Saharan Africa via training, crop diversification, and farmer‐based organizations. Using data collected from 2,048 pre‐ and post‐CLP‐I interviews of cocoa producers in Ghana, Cote d'Ivoire, Nigeria, and Cameroon, the results show that yield enhancements attributable to CLP‐I are 32%, 34%, 50%, and 62% in Ghana, Côte d'Ivoire, Nigeria, and Cameroon, respectively. Using a total program cost of $151–$200 per beneficiary and estimated annual benefits of $109–$322 per beneficiary over 25 years, the benefit‐cost ratios are estimated to range from $18 to $62 for every dollar spent on human capital development. These results suggest the WCF should endeavor to increase the number of farmers who receive all, not some, of the components of the program. This would not only help ensure that each producer obtains as much human capital as possible from each of the training programs but increases the probability of reaching the CLP goal of doubling the income of cocoa‐growing households.     

Cocoa pricing options and their implications for poverty and industrialization in Ghana

This study establishes the cocoa pricing subsidization options that will stabilize processors’ throughput while meeting the multiple, but possibly conflicting, public policy objectives of maximizing government revenue and reducing poverty among Ghanaian cocoa beans producers. To evaluate these options, we construct and numerically simulate a structural dynamic stochastic model of a representative cocoa processor who maximizes the present value of current and expected future profits, given prevailing market conditions and cocoa pricing policies. Our results indicate that, given current processing capacity, the Ghana Cocoa Board would have to offer a 92% discount to processors on main‐crop beans in order to achieve the industrial goal of locally processing 40% of annual production. This would cause light‐crop beans used in processing to be completely displaced by main‐crop beans carried over as inventory. It would also increase mean processor revenues by 167%, but cause the Ghana Cocoa Board to operate at a significant deficit, implying that the stated goal could only be achieved through massive government subsidies.     

Toward a green revolution in Africa: what would it achieve,and what would it require?

The current global food crisis has reemphasized the costliness of Africa's failure to achieve food security and poverty reduction. The instrument by which other more successful developing countries achieved these outcomes was a “Green Revolution” in agriculture. While previous research has provided largely discursive appraisals of the viability of an African Green Revolution, this article adopts a more rigorous methodology to address that question. First, an economy‐wide multimarket model, augmented with existing poverty–growth elasticities, is developed to assess the likely impacts of a rapid acceleration in food production (of the kind witnessed in previous Green Revolutions) on food prices, consumption and demand, farmer revenue, and poverty. Our results suggest that a rapid growth in staple production, together with more integrated regional markets, would reduce food prices by roughly 20–40% for consumers and 10–20% for producers among the major crops. This translates into a large rise in farm revenues, annual agricultural growth rates of 6.5% or higher, broader income growth and food security, and over 70 million Africans being lifted out of poverty. The article concludes by emphasizing the kinds of fundamental policy actions and resources that would be required for achieving these outcomes.     

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.     

Impacts of socio-economic policies on agriculture in the mountainous upland of the Dalinghe river watershed,Northeast China

Ghana, as the second largest global producer of cocoa, is strategically positioned on the world market. Consumer concerns over ethical and environmental issues associated with cocoa production are a potential threat to its position. These concerns have given rise to certification. Certification dictates the way cocoa can be produced and consequently affects producers’ incomes and environmental services. The expected profitability, yield, and environmental impact of Rainforest Alliance certified shade-grown cocoa production (RA-Cocoa) is estimated and compared to an extensive shaded production system (Ext-Cocoa) and an intensified full sun production system (High-Tech). Ext-Cocoa represents most cocoa production systems in Ghana, while High-Tech is promoted by the government as a tool for attaining its target output of 1 million tons. Under the baseline assumptions High-Tech was the most profitable; RA-Cocoa generated positive returns, while Ext-cocoa was a break even proposition. Simulation of different policy scenarios did not affect the rank order of the baseline outcome. The Ext-Cocoa yield was 28% of the RA-Cocoa yield, which was 78% of the High-Tech yield. The environmental services maintained at the plot level of RA-Cocoa production system are greater than those of the High-Tech production system. However, the 228,000 ha of additional forest land required to produce 1 million tons with RA-Cocoa questions which system would impact environmental services the least.     

Sustainability winners and losers in business-biased cocoa sustainability programmes in West Africa

In cocoa farming forestland is a production factor. Cocoa planting is easiest and production costs are lowest in tropical forest. Historically, therefore, once forestland has been exhausted in a given geographical area planters tend to diversify into other production systems to avoid the poverty (induced by increasing factor cost) of post-forest cultivation. In modern times however cocoa planters exist in a value chain and post-forest diversification could threaten multinational companies relying on rural planters for their raw material. In 2014 ten of the world’s largest chocolate multinationals combined, with more than $500 million in funding, to introduce a cocoa sustainability scheme called CocoaAction. In principle, CocoaAction and similar sustainability schemes sponsored by western multinational chocolate companies are interventions to empower cocoa planters and planting communities in West African countries. But in practice, as this article will show, these schemes are a response to diminishing returns in cocoa-producing communities and the prospect of diversification, and the resulting projection of a shortage in raw material. There are signs that diversification away from cocoa will be beneficial to cocoa planters and their communities. Cocoa sustainability schemes are therefore designed for the benefit of multinational chocolate companies and at the expense of diversification in West African countries.     

Estimating the economic cost of weeds in Australian annual winter crops

An analysis of the annual costs of weeds in seven winter crops across Australia demonstrated that the most important 15 weed species cause substantial annual costs in both financial and economic terms. Using survey data captured over the 1998–1999 growing season, the financial cost of these weeds in seven crops was estimated to be AU$1,182 million. The main components of this cost were herbicides (AU$571 million), the competitive effects of residual weeds (AU$380 million), and tillage (AU$206 million) while weed contamination of grain was a minor cost (AU$25 million). Across all regions, the most economically important weeds were annual ryegrass, wild oats, and wild radish, although there were regional differences in importance. An economic surplus analysis determined the annual economic cost of weeds in annual winter crops to be AU$1,279 million. This surplus loss represented 17% of the gross value of Australian grain and oilseed production in 1998–1999. Australian grain producers incurred a major loss, with a reduction in producer surplus of AU$1,047 million. Australian grain consumers had a large consumer surplus loss (AU$229 million), while international consumers suffered a small loss and international grain producers gained a small producer surplus from the higher grain prices.     

The influence of proximity to market on bean producer prices in Nicaragua

Transport costs are an important determinant of smallholder welfare in developing countries. In particular, transport costs influence the prices that smallholders receive for their produce. We propose a simple way of quantifying this influence. Taking the example of bean producers in Nicaragua, we employ a hedonic price model to estimate the effects of a smallholder's proximity to markets on the prices that he/she receives, while controlling for other factors such as the volume and quality of beans sold. We find that on average each additional minute of travel time reduces farm gate prices by 2.5 cents per quintal. Based on these results, the annual income from bean sales of the average smallholder in our sample would increase by between 24 and 110 USD if travel time to markets were reduced by 25%. Estimates of this nature can make an important contribution to cost–benefit assessments of infrastructure investments.     

Cash crop choice and income dynamics in rural areas: evidence for post‐crisis Indonesia

In this article we investigate the factors affecting levels and growth of incomes in rural Indonesia following the crisis of 1997–1998. In particular, we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics. Framing the article in the context of an optimal labor allocation model, relying on unique household panel data from Central Sulawesi, and using advanced panel econometric methods, we find that local innovations related to the adoption and intensification of new cash crop varieties, more specifically the shift from coffee to cocoa production, can explain a substantial part of the observed post‐crisis developments. Causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14% higher income levels during the post‐crisis period compared to the planting of other crops, most notably coffee. Also, our results demonstrate the importance of engagement in nonfarm activities for household income growth. Comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of Indonesia.     

Effect of changes in population density and crop productivity on farm households in Malawi

This study examines the ex‐ante farm‐household effects of changes in family size, yield potential, and yield gaps using a farm‐household simulation model that reflects the economic and biophysical conditions of central Malawi. Disparities between growth in human population and crop yields present challenges for farm‐household crop production and income in sub‐Saharan Africa. We focus on the effect of growth in yield potential and a more efficient use of livestock manure as approaches to improving crop production and incomes in the face of looming population pressures. Our results suggest that, even without considering climate change, expected changes in population density and crop prices in 2050 mean that per person crop production and income may fall by 21% compared to 2013 values if yield potential and yield gaps remain constant. However, per person crop production and income could increase in 2050 by 8% compared to 2013 values if (1) growth rates of yield potential rise for maize by 1.13% each year and for legumes rise by at least 0.4% each year, and (2) farmers use livestock manure more efficiently. Our foresight approach to considering crop production at the farm‐household scale supplements macro‐scale analyses of the production dimension of food security.     

Did the commodity price spike increase rural poverty? Evidence from a long‐run panel in Bangladesh

We assess the effects of the dramatic rise in agricultural commodity prices during 2007–2008 on income dynamics and poverty among rural households in Bangladesh. A unique panel data set allows us to put the effects of recent events in the context of long‐run trends in income and poverty. We use data from a nationally representative longitudinal survey of rural households in Bangladesh collected in four waves in 1988, 2000, 2004, and 2008. Nargis and Hossain (Nargis, N., Hossain, M., 2006. Income dynamics and pathways out of rural poverty in Bangladesh, 1988–2004. Agric. Econ. 35, 425–435) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and severity of poverty, aided in particular by human capital development and off‐farm employment opportunities. We update and extend the analysis to include data collected in 2008, at the height of a spike in agricultural prices. We find that the price of a balanced food basket increased by more than 50% during 2000–2008, while household income rose only 15%. As a result the incidence and severity of rural poverty in Bangladesh sunk to pre‐2000 levels during 2004–2008. Thus, the price spikes in 2007–2008 helped push an additional 13 million people into poverty in rural Bangladesh. Moreover, we find that the determinants of poverty have not been time‐invariant. In particular, agricultural production, which had previously been associated with a higher incidence of poverty, served as a hedge against higher food prices during 2004–2008.     

The welfare implications of Brazil's coffee export price subsidies during the ICA

To increase coffee export revenues during the International Coffee Agreement, Brazil provided selected purchasers with export rebates that could be used to pay for future coffee purchases. This subsidy mutated and grew over time, encouraged by rent seeking. The subsidy had huge cost to the Brazilian Treasury, $9.8 billion in constant 1982 US dollars, or about 13% of coffee export revenues. As exports were usually quota‐constrained, the subsidy increased Brazil's international coffee price, particularly during 1980–1986, absolutely and relative to its competitors’ prices. The unexpected variation in Brazil's price also caused the New York Coffee, Sugar, and Cocoa Exchange to terminate trading in Brazilian coffee futures, making it more costly to hedge Brazilian coffee until today. The econometric evidence is mixed, but it seems likely the subsidy reduced Brazil's net economic welfare and redistributed income from the Treasury to foreign roasters, domestic exporters, and government bureaucrats.     

Land use and income diversification: comparing traditional and colonist populations in the Brazilian Amazon

This article compares and analyzes land use and income diversification among two distinct groups of farmers in the Brazilian Amazon: recent colonists in Ouro Preto do Oeste, Rondônia, and traditional long‐term residents along the Tapajós River, Pará. We investigate the hypothesis that farmers who diversify their cash income sources clear less forest on an annual basis, and we compare these livelihood choices across colonist and traditional populations. In particular, we develop a conceptual model based on the household production framework and use econometric models to identify determinants of diversification and forest clearing. We find that diversification of agricultural cash crops is negatively correlated with forest clearing by colonists, providing limited evidence for the hypothesis. Other significant covariates of diversification and forest clearing include cash income levels, stage in family life cycle, cattle ownership, and chemical inputs. Differences in these variables, and differences in household response to these variables, explain variation in diversification and forest clearing across the two populations.     

The effects of rising food prices on poverty in Mexico

We evaluate the impact of the rise in food prices during 2006–2008 on the poverty and extreme poverty rates in Mexico. We concentrate on the poor's consumption of staple foods, and analyze the change in their consumption brought about by changed prices. We also allow households receiving income from the farming and livestock sector to benefit from increases in prices of food products. We find a modest increase in poverty using 2006–2007 prices; however, there is a daunting effect on the poor once the 2008 prices are taken into account. After considering the positive effects of public policies announced in 2008, such as reduced taxes and tariffs on food products and greater subsidies to the extremely poor, the poverty rate measured through consumption increases from 25% to 33.5%, and the extreme poverty rate from 10.58% to 15.95%, given the increase in food prices. Further analysis using the theory of optimal taxes suggests policies oriented towards relieving the food price pressure on the Mexican poor should aim at lowering the prices of eggs, vegetable oil, milk, and chicken.     

Governing the Organic Cocoa Network from Ghana: Towards Hybrid Governance Arrangements?

In this paper, we examine the processes of initiation, construction and transformation of the organic cocoa network from Ghana. We address in particular how the state responded to and engaged with civil‐society actors in the organic cocoa network and to what extent state involvement reshaped state–business–civil society relations? While most of the literature argues that globalization and liberalization processes weakened the state's position as key player in the development and management of agro‐food networks, the case of the (organic) cocoa sector in Ghana is often depicted as an exception because of the strong position the state still occupies in it. Employing a global commodity network perspective to analyse the Ghanaian organic cocoa case, this paper demonstrates that although the state is still a major player in the contemporary (organic) cocoa network, some hybrid governance arrangements, involving state, transnational and national NGO networks, and businesses, are emerging. The organic cocoa network also prompted a double process of ‘dis‐ and re‐embedding’ at the local level that helped shape and strengthen the organic cocoa network.     

Are we overestimating the negative impact of higher food prices? Evidence from Ghana

Most studies of the welfare impact of higher food prices adopt Deaton's approach, based on the first‐order effect of prices changes using income and expenditure survey data. This paper explores the impact of higher maize and food prices in Ghana and considers the sensitivity of results to changes in several assumptions. If second‐order effects are included, incorporating household response to price changes, the welfare impact of food price increases is more positive, but only modestly so. However, if we assume that marketing margins are constant in real terms rather than proportional to prices, the welfare impact is substantially more positive. These findings highlight the need for more research on the behavior of marketing margins under volatile prices.     

Modeling farmers' decisions on child labor and schooling in the cocoa sector: a multinomial logit analysis in Côte d'Ivoire

Since 2000, children working in the cocoa sector of Côte d'Ivoire have found themselves in the media spotlight. This situation has assumed particular importance because approximately 40% of the world's cocoa production occurs in Côte d'Ivoire. Concerned parties have since taken great interest in this thorny issue. There is a need to better understand the reality of child labor utilization in this sector. This article investigates child labor issues in the cocoa sector of Côte d'Ivoire in conjunction with schooling status of children. The study is based on a survey done in 2002, over a representative sample of more than 11,000 members of cocoa households. The multinomial logit model is used to capture choice probabilities across work and/or school options. The results reveal that child labor in cocoa farms and nonenrollment in schools are significant. Moreover, many children are involved in potentially dangerous and/or harmful tasks. Data also highlight gender and age dimensions in the participation of children in tasks and the way labor is allocated. Econometric results generally indicate that the gender and age of children, whether or not the child is the biological child of the household head, parents' education, the origin of the farmer, household welfare, household size, the household dependency ratio, the size of other perennial crop farms, the number of sharecroppers working with the household head, and communities' characteristics are all pertinent in explaining the child work/schooling outcome in the cocoa sector of Côte d'Ivoire.     

Impacts of increased bioenergy demand on global food markets: an AgMIP economic model intercomparison

Integrated Assessment studies have shown that meeting ambitious greenhouse gas mitigation targets will require substantial amounts of bioenergy as part of the future energy mix. In the course of the Agricultural Model Intercomparison and Improvement Project (AgMIP), five global agro‐economic models were used to analyze a future scenario with global demand for ligno‐cellulosic bioenergy rising to about 100 ExaJoule in 2050. From this exercise a tentative conclusion can be drawn that ambitious climate change mitigation need not drive up global food prices much, if the extra land required for bioenergy production is accessible or if the feedstock, for example, from forests, does not directly compete for agricultural land. Agricultural price effects across models by the year 2050 from high bioenergy demand in an ambitious mitigation scenario appear to be much smaller (+5% average across models) than from direct climate impacts on crop yields in a high‐emission scenario (+25% average across models). However, potential future scarcities of water and nutrients, policy‐induced restrictions on agricultural land expansion, as well as potential welfare losses have not been specifically looked at in this exercise.     

Peer effects in the diffusion of water‐saving agricultural technologies

We investigate the role of peer effects in the diffusion of an important water‐saving irrigation technology: low energy precise application (LEPA). Using detailed irrigation behavior data for growers in the High Plains Aquifer region of Kansas covering 1990–2014, we find clear evidence of peer influence in adoption of LEPA, net of environmental factors. Specifically, an additional neighboring LEPA installation within 1 km increases the probability of adoption by about 0.3 percentage points, on average, and this effect diminishes with distance. Our empirical estimates indicate that in the absence of peer effects, LEPA adoption would have been about 10% lower (1,000–1,600 fewer installations) per year. In addition, we find that growers install LEPA in response to higher energy prices.     

Property rights, production technology, and deforestation: cocoa in Cameroon

In this article, we use a vintage‐capital model with risk of eviction to assess cocoa farmers' response to changes in their tenure security and to the introduction of a new, faster‐maturing cocoa variety. The model is calibrated with data from Cameroon in calendar year 2000, and then used to simulate the effects of institutional and technical change on farmer welfare and deforestation rates. Our findings can be summarized in three points. First, improved tenure security over cocoa fields increases farmers' consumption and welfare, but at the expense of more deforestation. Second, the introduction of new cocoa varieties with faster maturity and higher input response also unambiguously raises farmers' consumption and welfare. Doing so increases deforestation under insecure land tenure, but slows down deforestation under secure land tenure. Third, when introducing the two innovations together (more security and also new varieties), there is both an increase in welfare and a decline in deforestation. In sum, the availability of new cocoa cultivars calls for stronger tenure security, to accommodate investment in the new technology without increasing deforestation.