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Rapid population growth, urbanization and rising incomes will present an unprecedented opportunity for growth of commercial agriculture and agribusiness in coming years. The value of food consumed in urban areas is set to expand by four times to 2030, but given evidence of a continuing decline in competitiveness much of this could be sourced from imports even in countries with an apparent comparative advantage in agriculture. At the same time, the number of youth entering the labor force will rise to 25 million annually by 2025 putting tremendous pressure on job creation, especially through agriculture. Rising investments in large-scale farming seen in recent years may contribute to increased food supply (although this is highly uncertain given the track record) but some investment, especially in mechanized grain farms, provide few jobs. Even so there is a dire need for increased investment in the sector, both public and private, if it is to realize its potential for growth and poverty reduction.

This paper lays out a number of models of inclusive agribusiness growth, grouped into three categories (i) institutional arrangements for improving productivity of smallholders operating in spot markets, (ii) various types of contract farming arrangements, and (iii) large-scale farms that generate jobs and/or include community equity shares. The institutional and policy context as well as commodity characteristics that favor these models are discussed within a simple transactions cost framework. Examples of apparent successes with each of these models are provided, many based on direct interviews and case studies of innovative firms.

The final section discusses cross-cutting policy priorities to enable the growth of commercial agriculture and agribusiness. These include continuing reforms to liberalize product and input markets, access to technology and skills, stimulating financial and risk markets, securing land rights, and investment in infrastructure through public-private partnerships. Priorities differ by value chain and implementation presents challenges of delicately balancing state intervention and leadership with private initiative. These challenges are illustrated through examples from Africa as well as emerging countries of Asia and Africa.

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For decades, earnings from farming in many developing countries, including in Sub-Saharan Africa, have been depressed by a pro-urban and anti-trade bias in own-country policies, as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and almost certainly added to global inequality and poverty and to food insecurity in many low-income countries. Progress has been made over the past three decades in reducing the trend levels of agricultural protection in high-income countries and of agricultural disincentives in African and other developing countries. However, there is a continuing propensity for governments to insulate their domestic food market from fluctuations in international prices, which amplifies international food price fluctuations. Yet when both food-importing and food-exporting countries so engage in insulating behavior, it does little to advance their national food security. This paper argues that there is still plenty of scope for governments to improve economic welfare and alleviate poverty and food insecurity by further reducing interventions at their national border (and by lowering trade costs). It summarizes indicators of trends and fluctuations in trade barriers before pointing to changes in both border policies and complementary domestic measures that together could improve African food security.

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Jennifer Burney
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FSE's Benin solar market garden project was picked as one of the most five hopeful energy stories of 2012 by National Geographic. Jennifer Burney, FSE fellow and lead on the Benin project, is a National Geographic Emerging Explorer. FSE began its partnership with the Solar Electric Light Fund in 2007 and continues to work together to spread the technology into new villages in West Africa.
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Currently, more than two-thirds of the population in Africa must leave their home to fetch water for drinking and domestic use. The time burden of water fetching has been suggested to influence the volume of water collected by households as well as time spent on income generating activities and child care. However, little is known about the potential health benefits of reducing water fetching distances. Data from almost 200 000 Demographic and Health Surveys carried out in 26 countries were used to assess the relationship between household walk time to water source and child health outcomes. To estimate the causal effect of decreased water fetching time on health, geographic variation in freshwater availability was employed as an instrumental variable for one-way walk time to water source in a two-stage regression model. Time spent walking to a household’s main water source was found to be a significant determinant of under-five child health. A 15-min decrease in one-way walk time to water source is associated with a 41% average relative reduction in diarrhea prevalence, improved anthropometric indicators of child nutritional status, and a 11% relative reduction in under-five child mortality. These results suggest that reducing the time cost of fetching water should be a priority for water infrastructure investments in Africa.

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Jenna Davis
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What does drought in Kansas have to do with underutilized groundwater in sub-Saharan Africa? Potentially a lot, according to a new study by researchers with the Global Freshwater Initiative (GFI), a program of the Stanford Woods Institute. The study, co-authored by FSE senior fellow Scott Rozelle, is the first to systematically analyze and classify water crises around the world. It finds that water systems have a limited set of patterns or "syndromes" which can be classified into one of four categories: unsustainability, vulnerability, chronic scarcity or adaptation. These syndromes have their root causes in just a few factors that influence demand, supply, infrastructure and governance - a finding that challenges long-held views that freshwater issues require highly individualized solutions.
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Without coordinated global action on climate change, it will be increasingly hard to reduce poverty in the world's poorest countries, said UN Development Program Administrator Helen Clark. Clark's visit to campus comes a few weeks before global climate negotiations are set to begin in Doha, Qatar. 

She highlighted ways in which climate change will, and is already, impacting food security in the world's most vulnerable regions: 

  • The IPCC’s climate projections indicate that an increasingly dry and hot climate will make sub-Saharan Africa less suitable for agriculture, reducing the length of growing seasons, lowering yields, and shrinking revenue. Some African countries could see agricultural yields decrease by 50 percent by 2050.
  • Researchers studying the Indian Ocean have concluded that human-caused warming there will make rainfall in the Horn of Africa even more erratic and severe drought more frequent.
  • The cumulative impact of extreme weather, rising temperatures and water stress on staple crops is making global food prices more volatile. Food price spikes disproportionately impact the world’s poor who spend up to 75 percent of their income on food--sparking riots and instability.
  • The World Food Programme estimates that climate change will put 20 percent more people at risk of hunger by mid-century.
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Stanford Woods Institute for the Environment
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Amy Pickering is a research associate and lecturer at Stanford University. She received a BS in biological engineering at Cornell University, a MS in environmental engineering from the University of California, Berkeley and a PhD in interdisciplinary environment and resources at Stanford University. Her current research interests include understanding the relationship between water access, food security, sanitation and infectious disease in rural communities in Kenya, Bangladesh, and Mali.

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Outside of China, the world now has more food insecure and nutrient deficient people than it had a decade ago, and the prevalence of obesity-related diabetes, high blood pressure and cardio-vascular diseases is increasing at very rapid rates. Expanded food production has done little to address the fact that between one-third and one-half of all deaths in children under five in developing countries are still related to malnutrition.

“With only three years away from the Millennium Development Goals deadline, this is a terrible track record,” said food and nutrition policy expert Per Pinstrup-Andersen at FSE's Global Food Policy and Food Security Symposium Series last week.  

Pinstrup-Andersen, the only economist to win the World Food Prize (the ultimate award in the food security field), has dedicated his career to understanding the linkages between food, nutrition, and agriculture. What is driving persistent food insecurity and malnutrition in a food abundant world?

Poor food supply management is part of the problem. According to the United Nations Food and Agricultural Organization (FAO), 20-30% of food produced globally is lost every year. That’s enough to feed an additional 3-3.5 billion people.

Jatropha in Africa. Photo credit: Ton Rulkens/flickr.

Biofuels production, such as jatropha in Africa, now competes with food for land, and climate change is already negatively impacting crop yields in regions straddling the equator—with major implications for food supply.

For low-income consumers in both the U.S. and developing countries increasing and more volatile food prices, such as those seen in 2007, are also driving food insecurity. Poor consumers respond by purchasing cheaper, less nutrient food, and less of it.

Nutritional value chain

Consensus is developing—at least rhetorically—among national policymakers and international organizations that investments in agricultural development must be accelerated. Members of the G8 and G20 have committed $20 billion in international economic support for such investments and some developing countries such as Ethiopia and Ghana are planning large new investments.

While most of these recent initiatives focus on expanded food supplies, there is an increasing understanding that merely making more food available will not assure better food security, nutrition, and health at the household and individual levels.

“It matters for health and nutrition how increasing food supplies are brought about and of what it consists,” said Pinstrup-Andersen. “We need to turn the food supply chain into a nutritional value chain.”

Diet diversity is incredibly important for good nutrition. Agricultural researchers and food production companies need to look at a number of different commodities, not just the major food staples, said Pinstrup-Andersen.

“The Green Revolution successfully increased the production of corn, rice, and wheat, increasing incomes for farmers, and lowering prices for consumers, but now it is time to invest in fruits, vegetables and biofortification to deal with micronutrient deficiency,” said Pintrup-Andersen.

Biofortification, the breeding of crops to increase their nutritional value, offers tremendous opportunity for dealing with malnutrition in the developing world, but is not widely available.

This is particularly important for areas in sub-Saharan Africa where between one and three and one and four people are short in calories, protein, and micronutrients. Obesity is actually going up in these countries with the introduction of cheap, processed, energy-dense foods (those high in sugar and fat) contributing to the diabetes epidemic.

Pathways to better health

Women hauling water to their gardens in Benin.

The path to better health and nutrition must look beyond the availability of food at affordable prices, clean water, and good sanitation, and consider behavioral factors such as time constraints for women in low-income households.

“Field studies have shown time and time again that one of the main factors preventing women from providing themselves and their families with good nutrition is time,” explained Pinstrup-Andersen.

He told the story of a woman in Bolivia too burdened with farm and household responsibilities to take the time to breastfeed her six-month old daughter. Enhancing productivity in activities traditionally undertaken by women could be a key intervention to improving good health and nutrition at the household level.

Access is another issue. A household may be considered food secure, in that sufficient food may be available, but food may not be equally allocated in the household.

“If we focus on the most limiting constraint we can be successful,” said Pinstrup-Anderen. “But we must tailor our response to each case.”

For sub-Saharan Africa, this includes investments in rural infrastructure, roads, irrigation systems, micronutrient fertilizer, climate adaptation strategies, and other barriers holding back small farmers.

Fortunately, there has been a renewed attention to the importance of guiding food system activities towards improved health and nutrition. The Global Agriculture and Food Security Program (GAFSP), which facilitates the distribution of some of the G8 and G20 $20 billion commitments, prescribes that country proposals for funding of agricultural development projects must show a clear pathway from the proposed agricultural change to human nutrition.

“But it’s not going to be easy to implement good policies,” warned Pinstrup-Andersen. “There are few incentives in government for multidisciplinary problem solving. The economy is set up around silos and people are loyal to their silos. Agricultural and health sectors are largely disconnected in their priorities, policy, and analysis."

Incentives must change to encourage working across ministries and disciplines to identify the most important health and nutrition-related drivers of food systems, impact pathways, and policy and program interventions to find win-wins for positive health and nutrition.

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Eran Bendavid, Assistant Professor of Medicine at Stanford University provides commentary on nutrition and food policy expert Per Pinstrup-Andersen's presentation and paper on "Food systems and human health and nutrition". The symposium and paper are part of the Center on Food Security and the Environment's Global Food Policy and Food Security Symposium series.

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Eran Bendavid
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