PIM - Presentation for Discussion with Donors and Partners - June 2013


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  • Data and methods includes paper on women’s land ownerhsip and collaboration with FAO.
  • The idea in the title is important.PIM wants to focus on incentives when policy measurements are mainly about distortions. We need to change the approach : we need better policies and the need to use new and better way to measure themThe graphs show that we have some contrasted pictures for one country:- For all goods (first the definition of all ag goods is not the same), but we have different level (leading also to different ranking across pcountries) but also different trends at different periods (one indicator go up when the other go down).- For rice we see OECD > WB, and for Milk : WB > OECD
  • The idea in the title is important.PIM wants to focus on incentives when policy measurements are mainly about distortions. We need to change the approach : we need better policies and the need to use new and better way to measure themThe graphs show that we have some contrasted pictures for one country:- For all goods (first the definition of all ag goods is not the same), but we have different level (leading also to different ranking across pcountries) but also different trends at different periods (one indicator go up when the other go down).- For rice we see OECD > WB, and for Milk : WB > OECD
  • Economies of scale: Fixed costs involved in transportation and processing fees, which rise the unit cost of output considerably when volumes sold are small.Bargaining power: with higher volumes, farmer groups can get better prices and conditions for their members than individual farmers.Coordination costs: Cost of organizing the group and coordinating activites for a collective sale.Time costs: Collective sales increase waiting periods between harvest and payment for a sale because of the need to wait for everybody to deliver during bulking period and for the group to find a buyer and pay back to individual members, since farmer groups very rarely have cash to pay members for their output directly.Uncertainty costs: uncertainty about the length of the waiting period between harvest and payment, and also trust that group leaders will get a good price and will not appropriate an unfair share of the payment.Evidence of limited success of farmer groups in improving market access: lower share of transactions through groups than directly to traders among Ugandan coffee farmers (Fafchamps and Hill, 2005), low benefits from memberships in farmer groups in Senegal and Burkina Faso (Bernard et al., 2008) and Ethiopia (Bernard and Seyoum-Taffesse, 2012). This project’s baseline survey indicates than more than 60% of the transactions made by farmer group members do not go through the group.In Uganda, we provide a random group of farmer groups (marketing coffee and maize) with a fund that mimics a working capital loan, to be used exclusively to give farmers a partial cash payment as soon as they deliver their output to the group, plus training on a voucher/bookkeeping system to manage the fund.Since many farmers argue that urgent need for cash is the main reason to sell to trader, by reducing the waiting period to get paid associated with collective sales, the intervention aims to make groups a more attractive option. This, in turn, increases the number of farmers selling through the group which increases the group’s bargaining power, and ultimately, the price the group can get.Groups that decided to continue with the intervention applying for microfinance loans belong to NUCAFE, an umbrella organization for coffee farmer groups in Uganda.
  • PIM - Presentation for Discussion with Donors and Partners - June 2013

    2. 2. Topics• Impact pathways and present work– Gender– Productivity– Access– Value Chains• Proposed evolution of PIM1 to PIM2• Partnership• Capacity building/mentoring
    3. 3. Impact PathwaysAgricultural ResearchLocal Adaptation Communication/Extension Policy Complementary InvestmentProductivityAccessNRM[Income} [Food Prices] Social ProtectionProperty rights Management of Common PropertyTechnical changeAsset pricing
    4. 4. 1. Strategic Gender Research2. Deepening Current Gender Worke.g. Value Chains3. Exploring NewPossibilitiese.g. Macro andForesight workPIM Gender Strategy
    5. 5. Strategic Gender Research• Workshop on Methods and Standards forResearch on Gender in Agriculture• Collaboration with FAO on sex disaggregateddata• Women‘s Empowerment in Agriculture Index• Women’s Empowerment in South Asia• In Africa, what share of land do women own?
    6. 6. The Productivity Theme: Unpacking therelationship between agricultural researchand productivityMean values of output-R&D elasticities for developing regionsRegion MeanAsia 0.142China 0.170Latin America 0.103Africa 0.093Source: Nin Pratt (2013) using information from Evenson (2001).
    7. 7. Constituent elements of relationship• Agricultural Research: Science Policy , Organizations, Incentives, Foresightmodeling, Public and private• Local Adaptation: Structure and organization of NARS; linkage ofNARS, SROS, Global Centers, Private; technology tracking• Extension: Organization and dimensioning of extension systems; ICT• Policy: Trade, subsidy, value chains• Investment: Public expenditure, geospatial coordination of infrastructure
    8. 8. Measuring Agricultural IncentivesThe need to go from Distortions to Incentives• Agricultural policies (domestic support and trade) arecomplex, various and change over time and countries;• Few initiatives aim to monitor policy distortions :OECD (PSE/CSE), World Bank (Ag.Distortions), IADB, MAFAP-FAO, WTO, but they differ:– In country coverage– Time coverage (eg. OECD PSE-CSE last updates for2011, World Bank 2007)– Methodologies, leading to contrasted pictures, evenfor very well documented countries:
    9. 9. Measuring Agricultural IncentivesDifferences: Example USARiceMilk“All Goods”
    10. 10. Why the need to improve themeasuring Ag. Policies?• Need to measure the policies and their effects todiscriminate between:– Well-designed policies aimed to target market failures:externalities, public good– Vs Distortive policies leading to new distortions, unfaircompetition, inefficiencies and international retaliations ;• Good measurement will help to:– Provide transparency and information;– Identify effective policies;– Favor international dialogues and International cooperation(G20, WTO, CAADP);– Public goods for policy makers and researchers (important needfor quantitative information in all modeling exercises: policyreform, foresight).
    11. 11. Proposed work for next phase• Coordination and extension in data collection;• Important methodological work by a researchteam/institution needed, beyond existing work:• Explain existing methodologies and their differences andlimitations• Methodological improvements so that price distortions canbe translated directly into “incentives” or “disincentives”.• Need to move from an accounting approach to abehavioral/modeling approach• It will rely on economic models (eg. CGE like MIRAGE tobuild Policy Index), well informed (link with research onvalue chains)
    12. 12. Value chain overview• Value chains are a linked set ofactivities* that are required tobring a product fromconception, through thedifferent phases of productionto delivery to final consumersto its disposal.• The study of value chains isuseful to identify critical issuesand bottlenecks that limitgrowth and in thisway, support povertyreduction.Simple Map of a Value Chain* Also can be called nodes or segments.
    13. 13. Sub-Theme 3.1: Innovationsacross the value chain for:• reducing transactioncosts;• managing risk;• building social capital;• enabling collective action;and• redressing missingmarketsHow?Sub-Theme 3.2: Impact ofupgrading value chains• Tools, methods• Comprehensive strategyfor evaluating andassessing the impact ofdifferent interventionsWeb-based clearing housewith tools, data and anetwork as an input forCRP2 and all othercommodity CRP’s
    14. 14. 14i?!Example 1 : On Dairy in Vietnam:Experimental design
    15. 15. Example 2: Working capital loanintervention in UgandaSmallholder1. Farmersdeliveroutput togroup, receives nopayment yetFarmer group2. Groupbulks fromfarmers anddelivers tobuyerProcessor /ExporterItineranttraderA. Traderbuys outputfromproducer atfarm gate3. Price and volumesare negotiated andbuyer pays for groupdelivery4. Group deductsfees anddistributespayment betweenfarmersB. Traderpays farmeron the spotIntervention: 1Working capitalloan to allowgroups to makea partialpayment tofarmers ondeliveryIntervention: 2we introduce asimplevoucher/bookkeeping system(easy to claimpartial paymentand understanddeductions)Results:• Reduction in cost of sellingthrough the group• Working capital loan almostdoubled the amount of outputcollected from members forgroup sales, which resulted inprices 80% higher than thoseaccepted by farmers sellingindividually• Farmers motivated to applyfor loans from microfinanceinstitutions
    16. 16. Example 3: Simple Weather SecuritiesCan we improve thedesign indexed productsso that:(i) Smallholder farmerswant?(ii) Protect farmers in badyears and thatallowing them toincrease agriculturalinvestment16
    17. 17. Lessons: demand for insurance Demand is strong whenfarmers are offered highquality insurance products(Ethiopia, Bangladesh) Complementary financialproducts are alsoimportant(Dercon, Hill, Clarke, Outes-Leon and Seyoum Taffesse2012): In Ethiopia: demandwas 50% higher wheninsurance sold togroups encouraged toshare non-insured risk• Weathersecurities: simpleand flexibledroughtinsuranceproducts• Gap insurance:protects againstbasis riskHigh qualityindexinsurance• Group saving andlending: protectsfarmers againstindividualagricultural riskFinancialproducts tocomplement
    18. 18. Improving the quality of insurance for nextphase: innovating with gap insurance Farmers’ concern: index insurance will not pay them when theyneed it, what if they had a bad year, but the index is good? Gap insurance addresses this concern: if the year has beenbad, but the index does not pay, a crop cut is requested. If averageyield is low, a payout will be made. Experience: Once gap insurance was introduced in Ethiopia, demand increased:In 2012, 1500+ policies issued with 48% of targeted farmerspurchasing in some districts (compared to about 500 policies in theprevious year) Strong demand in Bangladesh for a similar product.
    19. 19. Value Chain Knowledge Clearinghouse• It is an initiative led by PIMCGIAR Research Program[IFPRI, CIAT, ILRI, IITA, WorldAgroforestryCentre, ICRISAT, Bioversity, andCIP].• The purpose is to provide acomprehensive, easilyaccessible repository ofresearch methods and bestpractices surrounding valuechain performance that can beused by all the consortiumresearch programs andpartners.
    20. 20. Value Chain KnowledgeClearinghouse: Main components• Tools: Toolbox with guidelines for specific applications; bestpractices for evaluation; and gender-specific analysis to integrategender into agricultural value chains;• Data: Existing datasets evaluated by participating CGIAR institutionsand partners. The data will be directly linked to the portal’s tools andbest practices and will include questionnaires and a detaileddescription of the sampling strategies;• A Network of Practice: This will bring all value chain experts in theCGIAR together in a common platform and will facilitatecollaboration among leading value chain scientists, ultimatelycreating a dynamic research community;• Community and Learning: Learning materials, e-courses, andworkshop series on the tools included in the clearinghouse.
    21. 21. Tool’s applications• Indicators that could beused as a first step in theprocess to strengthenvalue chains (e.g.mapping gender roles)• Also to track changes andperformance, for examplewomen’s and men’sshares in chainemployment and income• Upgrade or create newopportunities for farmersValue chain analysis phases
    22. 22. Major activities on gender in valuechains• Map the participation in the value chain (occupations bygender), identify gender wage gap, time use analysis,discrimination, occupational segregation, workingconditions and access to work equality.• Identify the gender-based constraints and opportunities• Design solutions to remove gender-based constraints anddo impact evaluation of them• Construct indicators to measure success of action• Scale up solutions• Organize workshops/training• Value Chain Knowledge Clearinghouse development
    23. 23. Next phase for value chains• Focus on bringing solutions to bottlenecks andtools developed to focus on farmerassociations• Design interventions with the different toolsand solutions to generate better collectiveaction on farmer groups• Main outcome is to generate the necessaryeconomies of scale
    24. 24. Work on access to food• Continued work on social protection and safetynets– Matching instruments to circumstances• Evaluations of programs in Brazil (Bolsa Familia) and SouthAfrica (child protection grant)• Vouchers, cash, food for work, conditional cash transfers– Tradeoffs or complementarity between socialprotection and growth?• Ethiopia household asset-building component• Demographic change and demand for food– Youth bulge in Africa, Central Asia– Aging elsewhere
    25. 25. Work on NRM• Management of common property resources– Water: modeling of demand and pressures (jointwith WLE)– Biodiversity: value chains now; moving towardmetrics and management– Drylands in Africa: pastorallivelihoods, management of pasture– Agroforestry now; discussion on forests (joint withForests, Trees, and Agroforestry)
    26. 26. Research Areas AddressingProductivity, Access, and NRM; PIM Now andProposedProposed areas of focus for next CRP phase2015-2020; preliminary Strengthening the innovation continuum Foresight modeling; link with householddata, geospatial, gender Clarifying roles of the public and private sectors inagricultural research, identifying new spillovers Adoption of technology, dispersion ofinnovation, and metrics to assess impact;Technology Platform; gender roles Identifying and addressing distortions in theincentive environment Strengthening value chains Tracking public spending on agriculture Increasing access to food of the poor andvulnerable Ensuring food access for the rural poor: insuranceand safety nets Demographic change and access to food Policy foundations of natural resourcemanagement for resilient landscapes Managing common property, including biodiversityResearch Areas Science policy Sectoral policy andmanagement of publicspending Social protection Sustainable intensification andtechnology adoption Asset accumulation by thepoor and women Value chains
    27. 27. Key Partnerships• Three types: Implementationpartners, researchpartners, outreach/communication• Key implementation partners:CAADP, ASARECA, CORAF, ICAR, FARA, multilateral development agencies, bilateralprograms, WFP, FAO and private sector
    28. 28. Capacity Building and Mentoring• Foundation of IFPRI’s programs already inplace; PIM co-finances– IFPRI country knowledge support programs– Regional Strategic Analysis and KnowledgeSupport System (ReSAKSS); SAKSS– AGRODEP African modeling network• Foresight modeling• Junior researchers
    29. 29. Major episodes of recent rapid agricultural growthlinked to policies, institutions, and markets.• China post 1978• Africa 2000’s after reforms of 1990s• Latin American after removal of importsubstitution policies.• Green Revolution: technology+policy• Global: greater openness to tradeStill much to be done, and CGIAR should be active andpresent.• Synergy with commodity and systems research• Partnership with developing countries
    30. 30. Thank You