Future Agricultures Working Paper 71
Leulseged Yirgu, Alan Nicol and Shweta Srinivasan
This paper addresses how policy responses to climate change are shaping the agricultural sector in Ethiopia, and their significance for the country’s future development. The paper highlights the multiple policy and institutional responses, including those that fall under a new policy direction of ‘green’ economic development, with a focus on development of a low-carbon economy by 2025. Under this broad banner, emerging policy narratives centre on achieving ‘climate smart’ agriculture, establishing more intensified and commercial approaches and, in the livestock sector, seeking major transformations in pastoralism within the country’s lowland periphery. At the same time, a number of structural gaps are emerging, including the success with which climate policy is being integrated across different natural resource sectors, from water and land management to rural afforestation.
Important political-economic considerations are shown to be driving some of the emerging challenges, as Ethiopia struggles to find ways of engaging a rapidly-growing economically active population. The paper suggests that externally-driven policy processes are crowding out more coherent analyses of key national-level resource management and development issues, and that a rush for climate finance may crowd out important local knowledge and experience from below that can better inform policy responses. Without adequately addressing multiple challenges facing smallholder farmers in many parts of the overcrowded highlands, question marks continue to surround the capacity of the country to achieve real agricultural transformation under the ambitious Growth and Transformation Plan.
Future Agricultures Working Paper 70
Immaculate Maina, Andrew Newsham and Michael Okoti
This paper analyses emerging policy discussions on climate change and agriculture in Kenya. Kenya has been ahead of many other countries in developing a national climate change strategy, and agriculture is one of the key critical sectors of interest. However, there are concerns about whether policy goals may be achieved amidst the actors’ many and diverging interests. This paper sets out to map how these debates are starting to take place in practice, and poses the following questions: what are the arguments, who is promoting them, and what are the implications for Kenya’s agricultural sector?
A better understanding of the key actors, their interests and through what narratives actor-interests are mobilised is important because they will all have implications for the kinds of support farmers at the local level do or do not receive, and the extent to which their own interests are fore grounded or marginalised within the policy process. Ultimately, the policy response to climate change in the agricultural sector is one important factor which mediates local-level vulnerability. The paper examines key policy narratives and documents on climate change and agriculture, how (groups of ) key actors cluster in relation to the narratives, and how they are manifesting themselves in practice.
Future Agricultures Working Paper 69
Despite ongoing changes in the structure of African economies, Africa remains heavily dependent on the agricultural sector for employment, foreign exchange and as a (potential) driver of poverty reduction. However, for several decades the dominant narrative regarding African agriculture has been one of underperformance. This paper broadly accepts the “under-performance” narrative, but qualifies it by highlighting the great diversity in performance both across and within countries and regions within Africa. It then considers how African agriculture is positioned to respond to a confluence of powerful forces that are already affecting it and will do so with increasing influence over the next decade(s). The three forces that this paper focuses on are: (1) increased demand for agricultural products in both domestic and international markets; (2) Population growth (which both contributes to this demand and alters the relative scarcities of land and labour available for production); (3) Democratisation (which is a partial exception, as the basic conclusion is that it is not yet exerting as much influence on agricultural policy as might be expected).
Future Agricultures Working Paper 68
Mohamed Elmi and Izzy Birch
This paper reflects on the work of the Ministry of State for Development of Northern Kenya and other Arid Lands between its formation in April 2008 and the elections of March 2013. The paper begins by summarising the historical, political and institutional contexts within which the Ministry was created, as well as the multiple narratives that have driven policy in Kenya’s drylands over time (section 1). It explains some of the policy choices the Ministry made in interpreting its mandate and shaping the policy agenda. The paper reflects on the response of different actors to the policy space opened up by the establishment of the Ministry, and looks at how it implemented its mandate and its day-to-day engagement with others. The authors discuss the institutional framework in more detail and the steps required to strengthen it further. The paper concludes with reflections and recommendations.
Future Agricultures Working Paper 67
Andrew Dorward and Ephraim Chirwa
This paper presents a partial equilibrium model of the impacts of the Malawi Farm Input Subsidy Programme on smallholder livelihoods in two major and contrasting livelihood zones over the period 2005/6 to 2010/11. Despite inherent difficulties in modelling the multi-scale and complex relationships that are involved, model findings show direct impacts on subsidy recipients (increasing maize production and real incomes), differences between poorer and less poor households (with poorer households normally gaining more proportionally but not necessarily absolutely from the same subsidy package), and differences between central and southern region maize growing areas with different rates of poverty incidence and land pressure (with greater absolute and proportional gains in poorer southern region areas). The results also show the impacts of the programme on wages and maize prices.
However, a significant finding of model simulations is that beneficial indirect effects may be greater than direct impacts in maize growing areas with high rates of poverty incidence and high land pressure. These indirect effects arise through increases in the ratio of wages to maize prices, and benefit poorer households (who sell ganyu labour and buy maize) while potentially harming in the short term the incomes of less poor buyers of ganyu labour and sellers of maize (these households should however gain in the medium and long run from increased livelihood opportunities with wider economic growth). This finding has important implications for programme design, implementation and evaluation. Much more emphasis should be placed on ensuring that the programme and other policies are managed to maximise these indirect benefits, and on assessing these benefits in programme evaluation. There are particular implications for the design and management of area and household targeting and graduation.
Future Agricultures Working Paper 66
Andrew Dorward and Ephraim Chirwa
This paper examines targeting issues that emerge from FISP evaluations undertaken since 2006/07, and puts forward various options for improving targeting. Targeting objectives depend upon programme objectives. In the FISP targeting occurs at area and beneficiary levels – the former targeting subsidies to different zones or districts, the latter targeting beneficiaries within already targeted areas.
Targeting is important because it affects achievement of programme objectives through its impacts on displacement (the extent to which purchases of subsidised inputs replace purchases of unsubsidised inputs that farmers would have bought anyway without the subsidy), productivity of input use, the direct benefits to beneficiaries, and wider economic, social and environmental benefits. Achievement of these benefits is generally supported by pro-poor targeting (with lower displacement and stronger growth linkages) but the effects of pro-poor targeting on the productivity of input use are not known and are an important (but difficult) field of further research. Relations of targeting with area and beneficiary graduation and with environmental benefits are complex, and also require further research.
Full title: Repeated Access and Impacts of the Farm Input Subsidy Programme in Malawi: Any Prospects of Graduation?
Future Agricultures Working Paper 65
Ephraim Chirwa, Mirriam Matita, Peter Mvula and Andrew Dorward
This paper analyses the impacts of the Farm Input Subsidy Programme (FISP) using a balanced four-year panel of 461 households from 2004/5, 2006/7, 2008/9 and 2010/11 agricultural seasons. We find evidence of economy wide and input market effects of the subsidy programme. The economy-wide effects of the subsidy programme are strong particularly due to lower maize prices and increased ganyu wage rates. The economy-wide effects of the subsidy which arise from higher ganyu wage rates, reduced time spent on ganyu, availability of maize at local level and lower prices of maize have enabled poor households to access maize when they run out of their own production.
With respect to input market effects, with 2010/11 conditions and quantities of subsidised fertiliser, a 1 percent increase in subsidised fertilisers reduces commercial demand by 0.15 – 0.21 percent. However, using various welfare indicators, we find mixed results on the direct beneficiary household effects of the subsidy programme from panel data analysis and there is no overwhelming evidence on the relationship between repeated access and impacts of the subsidy. The direct beneficiary impacts on food consumption, self-assessed poverty and overall welfare are weak and mixed while there is some statistically significant evidence of positive impacts on primary school enrolment, under-5 illness and shocks. Nonetheless, the impact analysis highlights the challenges of targeting and sharing of subsidy among households, which may have implications on the direct beneficiary impacts and prospects to sustainably graduate from the programme.
Future Agricultures Working Paper 64
Ephraim Chirwa and Andrew Dorward
The involvement of the private sector in the Farm Input Subsidy Programme (FISP) has changed over the lifetime of the programme with increasing participation in fertilizer procurement, inclusion and exclusion in fertiliser retail sales, increased participation in seed sales and increased participation in the transportation of fertilisers to various outlets in Malawi. This paper documents changes in private sector involvement in various aspects of the programme since 2005/06 and identifies benefits and challenges of participation of the private sector in the implementation of the programme.
The paper reviews the experience of private sector participation using data from the Logistics Unit and household and community surveys conducted in the 2006/07, 2008/09 and 2010/11 agricultural seasons. The analysis shows that commercial sales of fertilisers, although lower than the pre-subsidy levels, have been increasing suggesting that the programme has in the medium term stimulated demand for fertilisers in Malawi. This has occurred at a time when the private sector has increasingly participated in the procurement of subsidy fertiliser but has been excluded from retailing of subsidy fertilisers. The seed component of the subsidy programme, which has always involved the private sector, has attracted additional seed growers and expanded the number of varieties for maize seeds and legumes.
Full title: Graduation of Households from Social Protection Programmes in Ethiopia: Implications of Market Conditions and Value Chains on Graduation
Future Agricultures Working Paper 63
The purpose of this research is to analyse how market conditions and value chain development of Food Security Programme (FSP) promoted products affect livelihood performance and possibility of graduating (as enabler and constrainer) from social support programmes in Ethiopia. The study is conducted in contrasting socioeconomic and livelihood settings of Oromia and Tigray regions. This will help to investigate how these two factors affect the resilience of households to various shocks, and their ability to live productive lives in a sustained manner.
This paper was produced under the Future Agricultures Early Career Fellowship Programme
Future Agricultures Working Paper 62
Laura Silici and Anna Locke
Private equity (PE) and venture capital are forms of investment that bring together specialised fund managers and investors to provide equity investments into private (i.e. non-publicly listed) companies. Compared to other emerging markets, the PE industry in Africa is still at an early stage of development but several circumstances suggest that its growth is proceeding at a sustained pace.
The agribusiness sector in Africa has become an increasingly important destination for investments, and investment in this sector is projected to grow further in future. PE may represent an additional, important source of capital for agriculture. However, due to lack of publicly available data, very little is known about PE deals concluded in Africa, where they stand within the panorama of agribusiness investments and the impact they have on local economies.
This study seeks to shed some light on the volume and the characteristics of PE investments in agribusiness in Africa, with the objective of assessing whether, and how, these could contribute to developing the sector.
This paper was produced under the Future Agricultures Early Career Fellowship Programme