Trade and Poverty in Rural Africa

The role of nutrition, population dynamics, and farm productivity

William A. MastersPurdue University

www.agecon.purdue.edu/staff/masters

Woodrow Wilson Center -- April 15, 2005

• physical capital– livestock– soils!

• human capital– nutrition– children

• social capital– networks (as opposed to markets)– conflict (as opposed to

cooperation)

How do African farmers respond to shocks?

Investment rates depend on bothprices and productivityFertilizer Use (N+P+K), 1961-2002

1

10

100

1000

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

kg

pe

r h

a o

f a

rab

le l

an

d

. RestWorldE&SEAsiaSouthAsiaSSAfrica

Consumption levels have fallen

to be among the world’s lowestData and projections on childhood underweight,

1995-2015

30

25

20

15

10

5

0

1995 2000 2005 2010 2015 MDG

Africa Asia Lat. Am. &Caribbean

DevelopingCountries

World

Trends, projections and MDGs for prevalence of underweight children under 5, 1995-2015

Perc

en

t o

f c

hild

ren

Source: UN Standing Committee on Nutrition (2004), Fifth Report on the World Nutrition Situation. New York: UN SCN.

Note: Data show estimated percentage of children aged 0-5 who areunderweight, defined as <2 s.d. below median NCHS weight for age.

Attribution of disease burden to major risk factors(estimates for high-mortality developing countries, 2000)

Attribution of di sease burden to major risk factors in high mortality developing countries

Risk factor % DALYs Disease or injury % DALYs Underweight 14.9 HIV/AIDS 9.0 Unsafe sex 10.2 Lower respiratory infections 8.2 Unsafe water, sanitation and hygiene 5.5 Diarrhoeal diseases 6.3 Indoor smoke from solid fuels 3.7 Childhood cluster diseases 5.5 Zinc deficiency 3.2 Low birth weight 5.0 Iron deficiency 3.1 Malaria 4.9 Vitamin A deficiency 3.0 Unipolar depressive disorde rs 3.1 Blood pressure 2.5 Ischaemic heart disease 3.0 Tobacco 2.0 Tuberculosis 2.9 Cholesterol 1.9 Road traffic injury 2.0

Notes: Arrows are roughly proportional to attribution rates. Risk factors and diseases associated with under - nutrition are in italics. The selected risk factors cause diseases in addition to those relationships illustrated, and additional risk factors are also important in the aetiology of the diseases illustrated. Data shown are totals for the 69 countries defined by the WHO as having both high child mortality and high adult mortality, which includes all 46 countries of Sub - Saharan Africa. Source: WHO (2002), World Health Report 2002, Annex Table 14 (p. 232). Available online at www.who.int.

Undernutrition is the developing

world’s leading cause of ill-health

Source: FAO (2004), The State of Food Insecurity in the World 2004. Rome, FAO.

Stunting by residence and wealth

The rural poor are particularly undernourished

Average Governance Ratings by Region, 1996-2002

-2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5

OECD

Eastern Europe

Lat.Am.&Carib.

East Asia

M.E.&N.Africa

Fmr.Sov.Union

South Asia

S.-Sah. Africa

Average of Six Indicators (-2.5 to +2.5)

1996199820002002

Note: Data show n are average of survey data and other indicators reflecting six underlying aspects of national governance: Voice and Accountability; Political Stability and Absence of Violence; Government Effectiveness; Regulatory Quality; Rule of Law ; and Control of Corruption.Source: D. Kaufmann, A. Kraay, and M. Mastruzzi (2003), "Governance Matters III: Governance Indicators for 1996–2002," World Bank Policy Research Working Paper 3106. Data available online at w w w .w orldbank.org/w bi/governance.

Poverty is closely linked to institutions and social capital

Food-crop output has been a key difference between Africa

and AsiaFood output per capita by region, 1961-2003

75

100

125

150

175

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

FA

O i

nd

ex v

alu

e, 1

961=

100

.

E&SEAsiaSouthAsiaRestWorldSSAfrica

Nonfood farm output/capita by region, 1961-03

75

100

125

150

175

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

FA

O i

nd

ex v

alu

e, 1

961=

100

.

E&SEAsiaSouthAsiaRestWorldSSAfrica

Rural Population Growth by Region, 1950s-2020s

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1950

-60

1960

-70

1970

-80

1980

-90

1990

-200

0

2000

-201

0

2010

-202

0

2020

-203

0

Ru

ral

po

p.

gro

wth

rat

e

. (

per

cen

t p

er y

ear)

SSAfricaE&SEAsiaSouthAsiaRestWorld

More and more Africans have no choice but to be

farmers

…and Africa’s fertility transition

is unusually slowChild Dependency by Region, 1950-2015

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1950 1960 1970 1980 1990 2000 2010No

. of

ch

ildre

n (

0-1

4)

pe

r a

du

lt (

15

-64

)

.

AfricaAsiaRest of the World

Source: UN Population Division, World Population Prospects: The 2002 Revision . Available online at <http://esa.un.org/unpp>.

Average cereal yields by region, 1961-2004

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Ave

rag

e ce

real

yie

lds

(mt/

ha)

RestWorldE&SEAsiaSouthAsiaSSAfrica

To raise food-crop productivity,

Africa has a lot of catch-up to do

The pace of farm productivity growth

is driven by new-variety adoptionAdoption of new varieties (pct. of cropped area)

80%

62%

42%

13%

52%

39%

23%

8%

26%

1%4%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1970 1980 1990 1998

Asia

Lat.Am.

SSAfrica

Public Research Expenditure per Unit of Land, 1971-91(1985 PPP dollars per hectare of agricultural land)

0

1

2

3

4

Sub-Saharan Africa All Developing Countries All Developed Countries

…and new varieties come from public R&D investment

R&D levels vary across countries but have not grown over time

Agricultural R&D Intensity in Africa, 1971-2001

0

1

10

100

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

Pu

blic

R&

D (

19

93

US

$/p

er

ha

of

ara

ble

lan

d)

MauritiusCape VerdeBotsw anaSw azilandNamibiaSouth AfricaSenegalMalaw iZimbabw eMaliRw andaKenyaCote d'IvoireMauritaniaGuineaGhanaBurundiLesothoZambiaTogoBurkina FasoMadagascarNigerTanzaniaUgandaNigeriaEthiopiaSudan

R&D has varied but high payoffs

Source: Alston, J.M., M.C. Marra, P.G. Pardey, and TJ Wyatt. 2000. "Research returns redux: A meta-analysis of the returns to agricultural R&D." Australian Journal of Agricultural and Resource Economics, 44(2): 185-215.

Estimated return to agricultural research and extension (%/year)

…and sustaining sufficient public investment has been

difficult!

USAID Funding for Research and Extension Activities in Africa

0

20

40

60

80

100

19

61

19

63

19

65

19

67

19

69

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

US Fiscal Year

Cu

rren

t U

S D

olla

r (M

illio

ns) Extension

Research

Total AKIS

•The value of successful food-crop techniques spreads widely among low-income people

– Private firms can’t recover costs– Donors have difficulty contracting for

appropriate R&D or dissemination efforts•…but welfare gains can be measured, so

donors could pay innovators after adoption– payments can be proportional to gains– innovators can choose what data to submit– secretariat can spot-check and certify

accuracy

New funding mechanismsmay be helpful

•.

Conclusions

•To facilitate trade for the poorest people, local food-crop productivity must rise

– To improve nutrition, health and schooling– To free resources for other things

•African farmers face unusual obstacles– Including much less of the public R&D

needed to generate appropriate new varieties

•Donors can and do fund R&D programs directly, but contracting is difficult

– A proposd way to facilitate investment is at: www.earth.columbia.edu/cgsd/prizes