Asian countries have witnessed a sharp increase in real wage as a result of rapid economic growth and structural transformation in recent years. Using a country level panel data from 1980 to 2010, this paper examines the effects of real wage increase on Asian agriculture that traditionally used family labor intensively on small farms. The empirical evidence supports our hypothesis that an increase in real wages, along with absorptions of labor into nonagricultural sectors, has been inducing the substitution of labor by machines in agriculture. However, this process is less successful in the countries that are constrained by their small operational land sizes, resulting in lowered land productivity. We also demonstrated that dynamic changes in yield are an important determinant of food self-sufficiency ratio. The above findings imply that in the near future, Asian agriculture can face a challenge in maintaining domestic food production. Given the large size of consumer demands in the region and its increasing trend, the future path of Asian agriculture could be a significant constraint on the global food supply–demand balance.

Asian countries have witnessed a sharp increase in real wage as a result of rapid economic growth and structural transformation in recent years. Using a country level panel data from 1980 to 2010, this paper examines the effects of real wage increase on Asian agriculture that traditionally used family labor intensively on small farms. The empirical evidence supports our hypothesis that an increase in real wages, along with absorptions of labor into nonagricultural sectors, has been inducing the substitution of labor by machines in agriculture. However, this process is less successful in the countries that are constrained by their small operational land sizes, resulting in lowered land productivity. We also demonstrated that dynamic changes in yield are an important determinant of food self-sufficiency ratio. The above findings imply that in the near future, Asian agriculture can face a challenge in maintaining domestic food production. Given the large size of consumer demands in the region and its increasing trend, the future path of Asian agriculture could be a significant constraint on the global food supply–demand balance.

Agriculture in Africa south of the Sahara (SSA) is still largely rainfed. SSA also exhibits the lowest crop yields for major staples in the world, largely due to low use of irrigation and fertilizer. Rainfed agriculture poses growing production risks with increased climate variability and change. At the same time, smallholder irrigation in the region developed rapidly over the past decade, albeit starting from very low levels. In addition to largely demand-driven irrigation development by smallholders, there is a significant push by donors for large-scale irrigation development, as well as some push for smallholder irrigation. There has also been a long-standing debate about whether irrigation in SSA should be large scale or small scale to achieve its potential. However, given the potentially high rewards, but also high possibility of failure, the assessment of irrigation potential must go beyond large scale versus small scale to integrate concerns regarding environmental sustainability, resource use efficiency, nutrition and health impacts, and women’s empowerment. The hypothesis underlying this review paper is that how irrigation gets deployed in SSA will be decisive not only for environmental sustainability (such as deciding remaining forest cover in the region) and poverty reduction, but also for health, nutrition, and gender outcomes in the region. The focus of this paper is on the health, nutrition, and gender linkage. We find that to date, few studies have analyzed the impact of irrigation interventions on nutrition, health, and women’s empowerment, despite the large potential of irrigation to affect these important variables. Irrigation interventions may have differential effects on different members in the household and in the community, such as irrigators, non-irrigators, children, and women. Measuring and understanding such differences, followed by improving design and implementation to maximize gender, health, and nutrition outcomes, could transform irrigation programs from focusing solely on increased food production toward becoming an integral component of poverty-reduction strategies.

Though there is increasing evidence of the availability and potential of new agricultural technologies in Africa south of the Sahara, effective demand for them is still low. A recent refocus on increasing farmers’ use of modern technologies such as improved seed and chemical fertilizer has led to a resurgence of input subsidies for these products in many developing countries. One popular mechanism currently in use is input vouchers. Targeted input vouchers are intended to simultaneously improve the targeting of subsidies and develop demand in private markets. While there is growing evidence of the impact of targeted subsidies on private input demand, as far as we are aware no empirical studies have examined the spillover effects of targeted subsidies for just one input on the use of other complementary inputs with which there is low substitutability. Consequently, this study begins to fill this gap by exploring the effect of increasing access to subsidized fertilizer on farmers’ use of improved seed in Nigeria. Using a control function approach within a limited dependent variable framework, we explore the effect of receiving subsidized fertilizer on a farmer’s likelihood of using improved seed. The study finds evidence that increased access to subsidized fertilizer increased the likelihood of farmers using improved seed in Kano, Nigeria. This indicates that farmers are re-optimizing their use of other inputs in response to increasing availability of one input. This complicates the ability to isolate the returns to any one input when evaluating programs targeted at just one input. Our results were robust to various model specifications and indicate that there is a clear link between farmers’ use of improved seed and fertilizer in Kano, which could be leveraged in the development of input subsidy programs across Africa south of the Sahara.

This 2013 Global Food Policy Report is the third in an annual series that provides an in-depth look at major food policy developments and events. Initiated in response to resurgent interest in food and nutrition security, the series offers a yearly overview of the food policy developments that have contributed to or hindered progress in achieving food and nutrition security. It reviews what happened in food policy and why, examines key challenges and opportunities, shares new evidence and knowledge, and highlights emerging issues.

The Malawian economy has in recent months been plagued by a severe foreign exchange crisis, fueled in part by a steadily rising import bill, sharp successive declines in tobacco export prices, the suspension of direct government budget support from several development partners in 2011, and an all-time low in international investor confidence. Up until the regime change in April 2012, the government resisted calls for a devaluation, which at the time resulted in a thriving parallel foreign exchange market. At its peak, the Malawi kwacha was trading at a premium of up to 100 percent in this secondary market. Economic theory shows that such a situation has adverse implications for an economy in terms of the balance-of-payments adjustment process and income distribution in the economy. Those with access to foreign exchange at the official rate are able to extract rents by selling foreign currency or imported goods at inflated prices. Imports sold domestically are then often valued at the parallel exchange rate rather than the official rate, with the parallel market rate serving as the only adjustment mechanism through which equilibrium can be restored in the balance of payments. This has a significant impact on domestic inflation to the detriment of consumers, while those with preferential access to foreign exchange at the official rate capture large rents. A simulation exercise using an economywide model for Malawi considers how the economy responds to different types of foreign exchange shocks under fixed and flexible exchange rate regimes. While the foreign exchange crisis in itself has severe negative implications for the economy, our results suggest that the economy responds much better to these types of shocks under a flexible exchange rate regime (that is, devaluations or a free-floating currency). Our main simulation shows that under the latter policy, gross domestic product growth, although negative, is 1.5 percentage points higher than under a fixed exchange rate policy. Similarly, poverty is 6.9 percentage points lower. A relaxation of the exchange rate policy, however, is only part of the solution; in the longer run, good governance and sound macroeconomic policy that is conducive to growth are needed to address the underlying structural problems in the economy that also contribute to foreign exchange shortages.

This paper presents a model of the Malawi maize commodity market that is developed for use as a policy analysis tool. The model captures national and local maize market dynamics and the linkages existing within the maize market in the country. This research has been undertaken in order to provide policy makers with a robust tool which can be used to simulate the impact of policy changes on markets and households. Such a tool ensures the availability of evidence for informing food and agricultural policies. The model is a multiequation partial equilibrium model of the national maize market in Malawi. It is developed and linked in a top-down unidirectional manner to the local maize economy via a price linkage equation. A nonbehavioral arithmetic microaccounting approach is used to estimate rural household incomes that are linked to the local economy, through which macroeconomic-level maize price changes transmit. The model can be used as a tool for analyzing the impacts of macroeconomic and agricultural policy changes on the maize industry as well as on rural households that rely on maize. The novelty of the model is that it takes into account the interrelationships between farm/household, local-economy, and national maize market prices, as well as economic theory and existing empirical evidence, to build a framework that is capable of linking to the macroeconomy rural subsistence households that are traditionally deemed to have few or no backward and forward linkages.

The purpose of the research summarized in this paper is to provide policy-relevant knowledge on the governance of rural services in Guatemala and thus to contribute to improving the provision of services that are essential for agricultural and rural development. Almost 10 years ago, the Guatemalan government decided to strengthen decentralization and community participation to improve the quality of public services, as well as access to these services for the poor, especially in rural areas. Based on quantitative and qualitative primary data, we examine how services are actually provided today and how community preferences and participation affect service provision in rural Guatemala. Our main finding is that the provision of formally decentralized services by local governments is incomplete. As a result, many rural communities continue to lack access to services, and some of them engage in supplying these services themselves. However, communities do not consider themselves to be more effective at service provision and would therefore prefer to be served by the government. Moreover, we find that community participation in the planning and evaluation of services has a positive impact on the responsiveness of the local government’s service provision. However, the effectiveness of community participation varies greatly among the examined cases, with several participatory governance bodies not functioning properly due to low education levels, poverty, and weak civil-society organization.

This study is motivated by the idea that even though participatory monitoring and evaluation (PM&E) is widely accepted as a tool to manage development programs to be effective, its application is widely constrained by its high start-up resource requirements in terms of both finance and time. However, this paper argues that after the initial investment is made, the payback from using PM&E is much higher both in terms of grassroots-level learning, empowerment, and capacity building and in terms of higher-level strategic decision making which enhances impact. This is demonstrated using field-level experience of implementing PM&E in farmer field schools (FFSs) under the Agricultural Services Support Program and Agricultural Sector Development Program–Livestock (ASSP/ASDP-L) program in Zanzibar, Tanzania. After describing the major steps followed in designing and implementing a PM&E for FFSs, the major lessons learned and challenges faced in the process are discussed. The study found out that PM&E has enabled the tracking of technology uptake and reasons behind adoption and nonadoption of technologies through detailed data collection. This informed and improved decision making at a higher level to design feasible methods to scale up adoption at other FFSs and to devise solutions for nonadoption. The need for incentives to undertake PM&E was found to be one of the major challenges of implementation, among others.