Diet transformation in Africa: the case of Ethiopia

Africa's food systems are changing fast amid rapid economic growth, emerging urbanization, and structural transformation. In this study, we use four rounds of nationally representative data from Ethiopia to document changes in household food consumption patterns over a period of unprecedented economic growth. We find that while the share of food in the total consumption basket is declining, food quantities and calorie intakes have considerably increased between 1996 and 2011. A decomposition analysis suggests that this was mostly driven by improvements in household incomes—a finding that is consistent across the calorie distribution. Also, the content of the food basket is changing with a gradual shift toward high‐value foods such as animal products, fruits and vegetables and processed foods. Overall, this diet transformation has important implications for the food security debate and for agricultural and food policy in the country.     

Quality control in nonstaple food markets: evidence from India

Using original survey data collected on growers, traders, processors, markets, and village communities, we will compare the situation in four states: Tamil Nadu, Uttar Pradesh, Maharashtra, and Orissa. We examine the way that information about crop attributes is conveyed (or not) along the value chain. We find that little information circulates about unobservable crop characteristics. Growers receive a price premium when they dry, grade, and pack their produce, but we find no evidence that information about crop salubrity or agricultural practices circulates through the value chain or that growers are encouraged to follow specific agricultural practices for quality purposes. Market infrastructure is deficient regarding sanitation, with few public toilets, inadequate drainage, and no coordinated pest control.     

Trade,value chains,and rent distribution with foreign exchange controls: Coffee exports in Ethiopia

Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia's coffee—its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. We further find that the consequent high wholesale prices for coffee are transmitted to producers, so that coffee farmers are unintended beneficiaries of this rent.     

Signaling,selection and transition: empirical evidence on stepping-stones and vicious cycles in temporary agency work

Despite the growing importance of temporary work agencies, the benefits they bring to temporary agency employees (TAEs) are still disputed, and empirical findings are, by and large, mixed. Using a unique dataset comprising almost 12,000 TAEs on their first and second temporary work assignments, this work aims at disentangling the consequences of temporary agency work on the level of the individual TAE in Germany. We find that temporary agency work assignments act as learning devices for employers about the underlying ability of TAEs. High ability employees can show their qualities and fit with the organization with the time spent on temporary work assignments, albeit at decreasing rates. In addition, we find that if a TAE is assigned to a subsequent project after the first one, it is less likely that the employee transitions into permanent employment. Hence, we conclude that a division exists among TAEs: where the high ability employee may find it a stepping-stone to a desired permanent position, and others get trapped in it and have a hard time transitioning into permanent employment.     

Isolation and agricultural productivity

This article examines the mechanisms that transmit isolation into productivity. In particular, we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of Madagascar. Madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation. Based on comprehensive household survey data combined with a census of communes, we discover a strong poverty–isolation relationship. Further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong. We isolate the following reasons why productivity might decline with isolation: (i) transportation‐induced transaction costs, (ii) the inverse relationship between plot size and productivity, (iii) increasing price variability and extensification onto less fertile land, and (iv) insecurity.     

On measuring the benefits of lower transport costs

Despite large amounts invested in rural roads in developing countries, little is known about their benefits. This paper derives an expression for the willingness-to-pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project. Estimation is based on novel cross-sectional data collected in a small region of Madagascar with enormous, yet plausibly exogenous, variation in transport cost. A road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households – those facing transport costs of about $75/ton – by nearly half, mostly by raising non-farm earnings. This benefit estimate is contrasted to one based on a hedonic approach.     

Evaluating Alternative Policy Responses to Higher World Food Prices: The Case of Increasing Rice Prices in Madagascar

Higher world food prices have led many developing countries to adopt policies to mitigate the impact on low-income households. This article sets out a partial equilibrium framework to evaluate the efficiency, distributional, and revenue implications of alternative policy responses. The model is applied to evaluate tariff reductions and targeted transfers in Madagascar. Although lowering tariffs generates substantial efficiency gains, these accrue mainly to the top half of the welfare distribution, and poor net sellers are actually worse off. Developing a system of targeted direct transfers to poor households is likely to be a substantially more cost-effective approach to poverty alleviation.     

Returns to social network capital among traders

Using data on agricultural traders in Madagascar, this papershows that social network capital has a large effect on firmproductivity. Better connected traders have significantly largersales and value added than less connected traders after controllingfor physical and human inputs as well as for entrepreneur characteristics.The analysis indicates that three dimensions of social networkcapital should be distinguished: relationships with other traders,which among other things help firms economize on transactionscosts; relationships with potential lenders; and family relationships.We find no evidence that social capital favors collusion.