Political feasibility of structural adjustment in africa: an application of SAM mixed multipliers

The implementation of structural adjustment programs (SAPs) has often been undermined by opposition from politically powerful groups who are favored by existing policies. To assess the political sustainability of SAPs this paper uses social accounting matrices for three African countries to model the income effects of stylized SAPs on different socioeconomic groups. The analysis reveals wide variation in the likelihood for typical SAPs to be acceptable to political elites while generating growth in the rest of the economy. The presence of a rural elite or strong farm-nonfarm linkages can enhance the political sustainability of SAPs.     

Consumer acceptance of provitamin A-biofortified maize in Maputo,Mozambique

Biofortified staple foods hold the potential to alleviate micronutrient malnutrition in many impoverished regions of the world. However, biofortification often alters the flavor, appearance, and other features of foods in ways that may limit consumer acceptance of the new varieties and diminish their impact. This research examined the acceptance of provitamin A-biofortified maize through taste tests and a trading experiment conducted in Maputo, Mozambique. On average, participants ranked the taste, texture, and appearance of their local white maize over an orange, biofortified variety and over a white variety with similar texture and flavor as the biofortified maize. Nonetheless, a large share of participants in a framed experiment accepted offers to trade local white maize meal for meal from the biofortified maize. Household size, the presence of small children, dietary diversity, and perceived taste were statistically significant determinants of acceptance. Results suggest that existing preferences for white maize do not preclude acceptance of orange, biofortified varieties and that provitamin A-biofortified maize may be a self-targeting nutritional intervention.     

An Integrated Epidemiological-Economic Analysis of Foot and Mouth Disease: Applications to the Southern Cone of South America

Animal disease outbreaks impose significant economic costs that evolve over space and time, but few studies have explicitly modeled their temporal and spatial impacts. Using an integrated epidemiological-economic model, this article demonstrates a methodology that captures the dynamic and spatial effects of animal disease. The model is applied to foot-and-mouth disease in the Southern Cone of South America. The results demonstrate the benefits of spatially sensitive policies in which certain regions within the Southern Cone employ different, coordinated interventions. Further, they highlight policy relevant differences between the dominant short-run and long-run control options.     

Impacts of prices and transactions costs on input usage in a liberalizing economy: evidence from Tanzanian coffee growers

Despite improvements in production incentives, agricultural output in Africa remained sluggish through the 1990s. Low use of purchased inputs may be part of the cause of persistently low productivity in African agriculture. This article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among Tanzanian coffee growers. A sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions. Travel costs in input and output markets have distinct effects on input usage, implying distinct avenues for interventions to promote more intensive use of agricultural inputs.     

Investment in site-specific crop management under uncertainty: implications for nitrogen pollution control and environmental policy

This paper applies an option‐pricing model to analyze the impact of uncertainty about output prices and expectations of declining fixed costs on the optimal timing of investment in site‐specific crop management (SSCM). It also analyzes the extent to which the level of spatial variability in soil conditions can mitigate the value of waiting to invest in SSCM and influence the optimal timing of adoption and create a preference for custom hiring rather than owner purchase of equipment. Numerical simulations show that while the net present value (NPV) rule predicts that immediate adoption is profitable under most of the soil conditions considered here, recognition of the option value of investment indicates that it is preferable to delay investment in SSCM for at least 3 years unless average soil quality is high and the variability in soil quality and fertility is high. The use of the option value approach reveals that the value of waiting to invest in SSCM raises the cost‐share subsidy rates required to induce immediate adoption above the levels indicated by the NPV rule.     

Currency Devaluation and Resource Mobilization: A Computable General-Equilibrium Analysis of Adjustment in Cameroon

Currency devaluations prescribed for many developing countries are usually expected to generate a growth-stimulating reallocation of resources in favor of export production. Results from a computable general-equilibrium model of devaluation in Cameroon indicate aggregate growth in export agriculture with decline in some traditional export crops and expansion in specific nontradable food crops. While agriculture and manufacturing expand after devaluation, reduced output from services and construction causes short-term contraction in aggregate output. Positive growth and trade balance effects are dependent on a major reallocation of labor which has been difficult to achieve in Cameroon.     

Expectations,supply response,and marketing boards: An example from Kenya

Whether farmers form price expectations adaptively or in a forward-looking manner has implications for supply response analysis and for the implementation of agricultural policy reform. This paper examines the formation of price expectations by Kenyan export-crop farmers who market their produce through a monopsonistic parastatal. The analysis allows for relaxation of the small-country assumption within a rational expectations framework. Production behavior is consistent with expectations of future prices based on indicators of aggregate supply and of the marketing board's purchasing capacity. The finding that price forecasts may be formed using information other than previous price levels implies that marketing reforms that raise prices may not raise the relevant price expectations. To elicit a positive supply response, market reforms should be sensitive to farmers' interpretation of institutional signals as well as previous prices.