Agricultural productivity in developing countries

This paper examines changes in agricultural productivity in 18 developing countries over the period 1961–1985. We use a nonparametric, output-based Malmquist index and a parametric variable coefficients Cobb-Douglas production function to examine, whether our estimates confirm results from, other studies that have indicated declining agricultural productivity in LDCs. The results confirm previous findings, indicating that at least half of these countries have experienced productivity declines in agriculture.     

Alternatives to local content requirements in resource-rich countries

This paper discusses whether and to what extent resource-rich developing countries should introduce local content policies, i.e. requirements to include local inputs in petroleum extraction activities of multinational corporations. We argue that local content needs to be seen as a public expenditure question, since local content requirements increase multinational costs, and hence reduce the taxes which can be extracted from these companies. This implies that there are opportunity costs in imposing local content requirements, since the forgone taxes can be used in others ways which could potentially do more to improve development prospects. Moreover, past experiences of resource-rich developing countries suggest that local content policies can exacerbate key problems of patronage and rent-seeking which resource rents generate, increasing the chance that the resource wealth will prevent rather than help development. These arguments suggest that an optimal local content policy in the context of flawed institutions is a more limited one than those typically pursued by developing countries with recently discovered petroleum reserves. Using qualitative data from Tanzania, a country with recent discoveries of substantial natural gas deposits, we analyze why local content tends to become such a central issue in debates and policy processes, despite its potentially problematic aspects.     

Evaluating land administration projects in developing countries

There have been various approaches to evaluating and comparing the performance of land administration and land titling projects in developing countries. Many of these consider the efficiency of land administration processes and the capacity of institutions. This paper presents the results of research undertaken by the authors and considers the most common approaches taken to date, and the strengths and limitations of these approaches. The authors argue that improvements are needed to project design and make recommendations for more effective use of socio-economic analyses.     

Modeling household behavior in developing countries: discussion

A large and growing body of literature has examined how agricultural households cope with risk. Much of the work has focused on which types of households are better able to smooth consumption, testing whether households with more resources and greater access to income-smoothing institutions, such as credit markets or well-functioning labor markets exhibit greater consumption smoothing. However, income shocks may have different effects upon different individuals within households, and differences in individual ability to smooth income or consumption may have welfare consequences which go beyond foregone income. The development of collective household models challenges the assumption that individuals within households maximize a single utility function. The assumption of income pooling has also been rejected in a growing body of empirical research on intrahousehold resource allocation. However, research on risk-pooling within households and differences in individual abilities to smooth consumption is relatively new. Selected papers are discussed.     

Trade and agroindustrialization in developing countries: trends and policy impacts

There have been important changes in the international trade of processed and high-value added food products from developing countries over the past several decades. One of them has been the emergence of oilseeds and fruits and vegetables, replacing traditional products such as sugar, coffee, and cocoa as the main exports from developing countries. Another trend has been the collapse of African agroindustrial exports and the increase of exports from Asia. The paper highlights key trends, and explores possible reasons for the trends, focusing on trade policies in less-developed countries (LDCs) and developed countries (DCs). The paper argues that national trade policies and other economic policies appear to have been relatively supportive of agroindustrial production and exports in Asia. In contrast, policies have had more mixed effects in Latin America and the Caribbean (LAC), and seem to have been just one component in a larger array of forces inhibiting economic development in Africa. The performance of agroindustrial production and exports from LDCs may be now more dependent than ever on the completion of reforms in the agricultural trade policies of DCs. For Africa, however, a more supportive international environment and better macroeconomic and trade policies will not be enough to ensure a thriving agroindustrial sector within a broader process of economic development until military confrontations stop.     

Barriers and requirements to climate change adaptation of mountainous rural communities in developing countries: The case of the eastern Qinghai-Tibetan Plateau of China

Systematically identifying the barriers and requirements to adaptation is critical to the successful implementation of climate adaptation planning and policies at the local level, especially in the mountainous rural communities of developing countries with limited resources and technology. We conducted an empirical study of the barriers and requirements to adapting to climate change of 539 peasant households in an ecologically vulnerable area of China to enhance their resilience to climate change by improving our understanding of adaptation process and decision-making. Our findings indicated that farmers in the Gannan Plateau face multiple adaptation barriers, of which normative, information and technology barriers were more serious, such as lack of meteorological information service, infrastructure and technology extension in agriculture or animal husbandry. Adaptation requirements are an important way to effectively reduce or eliminate obstacles and improve farmers' adaptive capacity to climate change. The survey found that local households have an urgent requirement for infrastructure, information and production technologies, such as water, electricity, transportation facilities, disaster warning information, employment information and farming or breeding techniques. In addition, due to the influence of economic level, education level, years of farming, gender and other factors, differences exist in the adaptation barriers and requirements faced by farmers in different regions. These findings extend empirical evidence in favor of formulating a reasonable adaptation framework and choosing optimal adaptation strategies, which are essential for enacting well-targeted regional adaptation policies.     

Growth in horticultural trade: Japan's market for developing countries

This paper explores possibilities and opportunities of expansion of horticultural exports from developing countries through an investigation on a rapidly growing market, Japan, as an example among major promising markets. In this paper six horticultural commodities are selected to analyze, emphasizing on exports from developing countries. Observations on Japan's horticultural imports make us presume that consumers differentiate products by place of production. Therefore, import behavior is considered in a two-stage budgeting procedure. The second-stage demands for imports from different sources are specified in an almost ideal demand system (AIDS) model and estimated statistically as well as the first-stage import demand equations. The estimated second-stage AIDS equations show that the magnitude of own-price coefficients varies with the source of imports and so does that of expenditure coefficients. Therefore, the characteristics of import demand on a commodity basis, which are captured by the estimates of the first-stage import demand equations, are not equally transmitted to the demand for imports by source in each commodity. The estimated coefficients of the first-stage import demand and the second-stage AIDS equations were combined to obtain the total effects of price and income changes on imports by source. The calculated own-price elasticities are greater than one in absolute value in ten of the 15 cases and so are the calculated income elasticities in twelve cases. The large elasticities promise suppliers that they benefit from Japan's income growth and that they increase their earnings if they can reduce the price by lowering their costs. However, factors in non-price competition also play import roles in the import growth. In this paper, the importance of sales promotions by exporters and preshipment inspections was indicated in the cases of mangoes and cut flowers. Other factors such as market structure and public infrastructure for post-harvest activities were also discussed.     

Warehouse receipt financing for smallholders in developing countries: Challenges and limitations

A warehouse receipt is a document issued by a warehouse operator as evidence that a specified commodity of stated quantity and quality has been deposited at a particular warehouse by a named depositor. When backed by an appropriate legal and regulatory framework, a warehouse receipt becomes a formal financial instrument that allows the depositor to confer a security interest in the stored commodity to another party without requiring physical delivery, allowing the warehouse receipt to serve as possessory collateral for a loan. Warehouse receipt financing, in theory, permits smallholders farmers in developing countries to store their surplus safely in a modern warehouse to sell at a later date when prices are higher, while allowing them to use the stored commodity as collateral to secure a loan to finance household consumption and investment needs in the interim. However, in practice, warehouse receipt financing generally has not been embraced by smallholders in developing countries in which it is available. Here, we develop and analyze a formal stochastic dynamic model of seasonal commodity marketing that exposes the transaction cost and risk reallocation problems that undermine the benefits of warehouse receipt financing to smallholders.     

Agricultural taxation in developing countries: a survey of issues and policy

This study surveys the experience of agricultural taxation in developing countries in the context of the ongoing policy debate about the tax structure and administration affecting agricultural producers. Using the examples of a number of countries, it analyzes the conceptual and practical problems associated with different tax regimes. Governments in most countries have reduced indirect (export) taxes on agricultural producers. However, the revenue from direct taxes on farmers has not increased. A major problem in most countries has been the measurement of (actual) agricultural income. Different measures for presumed income have been used with varying success. They seem to have the most potential for increased revenue in many countries, but their effective implementation is constrained by the political and administrative considerations.     

Implications of agricultural trade liberalization for the developing countries

The developing countries as a group could expect to experience only small welfare gains if they chose not to actively participate in agricultural trade liberalization and relied solely on the benefits of partial liberalization in the OECD countries. Participation along the lines of the Dunkel package, with the developing countries reducing positive assistance by less than the developed countries, would yield gains of the order of US $20 billion. More comprehensive participation in trade liberalization involving reductions of both positive and negative protection would almost triple these welfare gains. While some developing countries do not gain from trade liberalization even with full participation, the number of such countries and the magnitude of their losses are greatly reduced.     

Sources of EC horticultural import growth from developing countries

A decomposition analysis of horticultural trade flows is carried out to identify the main sources of change in EC horticultural imports from different LDC regions. Sources of change are associated with each region's international competitiveness, the relative openness of the EC market, the degree of trade preference enjoyed by the region, and the EC global import growth. The main contribution to the LDC export growth of fruit and vegetables to EC between 1975–79; and 1985–89 is found to be attributable to the global import growth effect. However, it has been significantly counteracted by the negative effect of a declining share of non-EC suppliers as a group. Marked interregional differences in changes in regional preferences show a lack of a strong correlation between LDC export performance and the existence of preferential trade agreements with EC. While the potential for LDC export growth to EC is clear, the results seem to indicate that in general EC protection policies have adversely affected import growth from LDCs. Various factors influencing LDC export performance in horticultural products are discussed. Apart from EC protection policies and changes in trade preferences, domestic supply factors are of significance in explaining export growth, including a liberal trading environment, but also specific policies to promote exports of horticultural products. While non-price competition weakens the discriminatory effect of preferential tariffs, there is a pressing need for developing countries to adapt to the demands of the European distribution system relating to quality, grades, and regularity of supplies.     

The impact of OECD biofuels policies on developing countries

OECD countries’ biofuels policies, derived from energy and environmental legislation and activated by high oil prices, were the primary cause of not only the sudden spike in grain and oilseed prices in 2007–2008 but also of the ensuing price volatility. Even though developing countries have a comparative advantage in biofuels production, they were shut out of rich countries’ biofuel markets by trade discriminating biofuels policies. Developing countries would not have been able to take full advantage of the price spike in the short run anyway given the low supply elasticities and the long time required for biofuel production to come online, unlike for corn‐ethanol. The controversy over the right price of food is misplaced and policy makers should instead focus on improving biofuels policies, which like their counterpart agricultural policies in previous decades, have damaged the welfare of developing countries.     

The rural non-farm sector: issues and evidence from developing countries

The rural non‐farm sector has traditionally been viewed as a low‐productivity sector which produces low quality goods. It is often expected to wither away as a country develops. Recent years have seen a shift away from this position towards recognition that the rural non‐farm sector can, and often does, contribute to economic growth, rural employment, poverty reduction, and a more spatially balanced population distribution. This paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective, focussing on the experience in developing countries. The paper documents the size and heterogeneity of the sector, pointing to evidence that in many countries the sector is expanding rather than declining. The issues associated with measuring the sector's economic contribution are discussed, followed by empirical assessments for several countries and regions. The distributional impact of non‐farm earnings is examined and it is found that a pro‐poor impact, while by no means inevitable, can be considerable. The sector's trajectory over time, in different settings, is reviewed and the scope for, and experience of, various policy interventions is discussed.