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IFPRI INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE AGRICULTURE AND FOOD SECURITY POLICY CONSTRAINTS OUSMANE BADIANE Director for Africa.

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Presentation on theme: "IFPRI INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE AGRICULTURE AND FOOD SECURITY POLICY CONSTRAINTS OUSMANE BADIANE Director for Africa."— Presentation transcript:

1 IFPRI INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE AGRICULTURE AND FOOD SECURITY POLICY CONSTRAINTS OUSMANE BADIANE Director for Africa

2 ONE KEY MESSAGE  Good Policies are not a solution for everything  Bad Policies are a problem for everything else  Policy Reversal would jeopardize ongoing growth recovery process »Risk of return to failed policies of 60s and 70s  No institutional memory  New generation of leaders  Stronger fiscal positions  More open, democratic systems  Populist pressures and tendencies

3 Source: IMF (2008); WDI (2008); Benin, S. et al. ReSAKSS (2012) POLICY REFORMS AND ECONOMIC PEROFMANCE IN AFRICA

4 Page 4 Martket liberalization, price margins and stability - Benin Change in absolute spatial margins Cfa/Kg Change in temporal margins Percent Change in relative spatial margins Percent Change in local price stability Percent POLICY REFORMS AND PERFORMANCE OF LOCAL MARKETS Case of Maize Markets in Benin Badiane and Resnick (2006)

5 POST 1980s RECOVERY: LONGEST PERIOD OF SUSTAINED GROWTH SINCE 1960S SOURCE: IFPRI / Badiane 2011

6 THE GROWTH IS ACCELERATING AS WELL AS SPREADING GEOGRAPHICALLY SOURCE: IFPRI / Badiane and Ulimwengu

7 AGRICULTURAL TRADE AND ECONOMIC GROWTH AGR. EXPORT AND DOMESTIC GROWTH EXPORT GROWTH INDUST. GROWTH 1% Growth 0.04% To 1.83% AGR. EXPORT AND DOMESTIC GROWTH

8 Incremental income from 1$ additional revenue from agricultural tradables Source: C. Delgado et al (1998) AGRICULTURAL TRADE AND RURAL GROWTH IN AFRICA

9 Increase in Demand and Incomes in Billion US$ LONG TERM TRENDS IN FOOD DEMAND AMONG AFRICAN COUNTRIES IFPRI/Badiane

10 THE STABILIZATION POTENTAIL OF REGIONAL TRADE

11 DISTRUST OF PRIVATE SECTOR HAS NOT CHANGED MUCH LACK OF CONFIDENCE IN MARKETS FARMING NOT RECOGNIZED AS PRIVATE BUSINESS ACTIVITY THEIR PRODUCTS AS SEEN AS COMMON RATHER THAN PRIVATE GOODS LINGERING DOUBT RE EFFECTIVENESS AND COST OF ALTERNATIVE POLICIES NO DISTINCTION BETWEEN POLICY GOAL AND INSTRUMENTS RETURN TO SUBSIDIES AND PRICE CONTROLS CREATION OF NEW SPECIALIZED AGENCIES LEARN FROM EXPERIENCE OF 1960 – 1980 AVOID REPEATING SAME MISTAKES: SAME POLICIES -> SAME RESULTS MOVE TO EVIDENCE BASED POLICY UNDER CAAPD IS CRITICAL RISK OF POLICY REVERSAL AND FUTURE GROWTH

12 WHAT IS THE PROBLEM? PRINCIPLES OF EFFECTIVE INPUT POLICIES IT IS THE ABSENCE OF A CRITICAL MASS OF:  OPERATORS  NETWORKS  INFRASTRUCTURE, AND  SERVICES IN ORDER TO ENSURE THAT INPUTS ARE AVAILABLE AT TIMES AND PLACES NEEDED AT REASONABLE COST

13 UNDERSTANDING THE COST OF SUPPLYING FERTILIZERS Source: Bumb, Johnson and Fuentes, 2012 *Averaged across Ghana, Mali, Senegal, and Nigeria

14 THEY CAN BOOST PRODUCTDION IN SHORT RUN THEY ARE NOT CERTAIN TO RAISE INPUTS USE AND YIELDS ONCE REMOVED (BROOKS 2012) THEY DISTORT COSTS OF FACTORS, LEADING TO INEFFICIENT ALLOCATION OF INPUTS THEY MAY BYPASS NASCENT LOCAL INPUT DEALERS (BANFUL 2009, BUMB ET AL., 2011; TAKESHIMA ET AL, FORTHCOMING) THEY HAVE BEEN PRONE TO BAD TARGETING AND LEAKAGES (MASON AND RICKER-GILBERT, 2012) EXCESSIVE LEAKAGE BENEFITS LARGER FARMERS FAILURE TO REACH THE POOREST AND MOST VULNERABLE HH 1 INPUT SUBSIDY POLICIES: THE EVIDENCE

15 THEY ARE VERY COSTLY FISCALLY: GHANA: FERTILIZER SUBSIDIES: 17 % OF MOFA BUDGET COSTS TRIPLED FROM GHS 29 TO GHS 90 MILL. OVER LAST 3 YEARS COULD REACH 3 5% OF BUDGET IN (BENIN ET AL., 2012) MALAWI: FERTILIZER SUBSIDIES: 74% OF AG BUDGET IN 2008/09 AND 6.6% OF COUNTRY’S GDP (DORWARD AND CHIRA, 2011). ZAMBIA: FERTILIZER AND SEED SUBSIDIES: 40% OF AG BUDGET BETWEEN 2004 AND 2011 (MASON AND RICKER-GILBERT, 2012) THEY LEAD TO SERIOUS MACRO IMPLICATIONS IN THE LONG RUN SERIOUS FISCAL DEFICIT / FOREIGN EXCHANGE SHORTAGES CURRENCY OVERVALUATION DECREASED COMPETITIVENESS SLOWER ECONOMIC GROWTH INPUT SUBSIDY POLICIES: THE EVIDENCE 5 6

16 OVERCOMING POLICY CONSTRAINTS  You need data before you need them!  What to do / How: o Data clusters: production, trade, hh status, prices, costs, expenditures, etc o Working Groups/Task Forces: bureau of statistics; NARs; data units in finance; trade, sector ministries o Common platform: harmonized standards and exchange protocols 1. IMPROVED DATA SYSTEMS

17 OVERCOMING POLICY CONSTRAINTS  A serious policy maker has to have constant access to high quality technical team  What to do/How: o Network: build AND maintain a network of leading national centers of expertise o Engagement: create mechanism with a plan to engage and use local expertise  agreement on long term strategic research  vehicle for ad hoc, short term technical input 2. READY-TO-USE TOP EXPERTISE

18 OVERCOMING POLICY CONSTRAINTS  First priority post Dakar!  What/how: o Dream team: assemble qualified team, first from existing staff, later dedicated team o Feed the beast: define demand for policy research and link to research networks o Connect!: ensure access to evidence and its use in policy formulation 3. EFFECTIVE COORDINATION / BROKERING FUNCTION

19 OVERCOMING POLICY CONSTRAINTS  Make it your 2014 Resolution!  What/how: o Infrastructure: create up-to-date IT platform o Knowledge base: build, maintain, and expand knowledge base: start with collecting existing key data, reports, and policy documents o Right to know: eliminate barriers to accessing knowledge o Never Forget: build memory of actions, processeses, outcomes – lessons learning to avoid past mistakes 4. OPERATIONAL KNOWLEDGEMENT MANAGEMENT

20 OVERCOMING POLICY CONSTRAINTS  Collective wisdom is best  What/how: o Dialogue platform: institute broad, informed debate about key strategic issues and choices o Review culture: evaluate and track commitments, performance and progress 5. INCLUSIVE POLICY DIALOGUE


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