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More than a billion people in developing countries suffer from chronic hunger. Long a neglected topic, the role of agriculture in promoting pro-poor growth is attracting renewed attention in the United States and internationally. CGD’s work in this area focuses on how rich countries’ agricultural policies and practices impact people and economic development in the poor world.
Three out of four people in the developing world live in rural areas and depend on agriculture to support themselves and their families. Yet, since development traditionally involves moving people from subsistence farming into higher-productivity activities in manufacturing and services, governments and donors have neglected agriculture for decades. The spike in food prices in 2007–08, coupled with the consequent increases in hunger and poverty, returned food security issues to the policy agenda.
Senior fellow Kimberly Elliott, author of Delivering on Doha: Farm Trade and the Poor, focuses on how rich countries' agricultural policies and practices affect poor people in the developing world. Non-resident fellow Peter Timmer has written extensively on the role of agriculture and food security in the economic development process. Non-resident fellow Jenny Aker conducts research on food aid in the Sahel and on the importance of mobile phones on food prices.
CGD research on food and agriculture analyzes several other topics:
Trade policies and farm subsidies that protect rich-country agricultural producers from competition at the expense of developing countries
The effect of biofuels production on poor people, including through food prices.
The impact of rich-world consumption of "fair trade" agricultural products, such as coffee and chocolate, on poor people and on development.
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Senator Bob Corker (R-TN) and Representative Ed Royce (R-CA) have teamed up with Democratic colleagues Senator Chris Coons (D-DE) and Representative Earl Blumenauer (D-OR) to introduce new legislation that would reform US international food aid to deliver more help to more people in crisis, faster.
This bipartisan group of lawmakers has championed changes to the inefficient policies associated with US global food assistance for years. But both Corker and Royce have announced they will retire from Congress at the end of the current session. This bill represents their last push to see food aid reform over the finish line, and recent changes in the landscape suggest it might also be their best chance to do so. The American Farm Bureau Federation, which long resisted changes to existing international food assistance programs that require the US government to purchase commodities in the United States and ship them long distances to those in need, recently embraced reform.
Giving the US Agency for International Development the flexibility to use cash, vouchers, or locally purchased food when one of those would be faster and more effective in helping hungry people in need
Stretching US food aid dollars by eliminating monetization, a slow and costly process whereby the US government provides NGOs with food that they must arrange to ship and then sell in developing countries to raise funds for their programs
Both bills would also preserve 25 percent of food aid for purchases of US commodities. Senators Corker and Coons estimate that reform could save $300 million that could be used to help feed an additional nine million more people.
As noted in the press release from the Corker and Coons offices, food aid is just 0.2 percent of total US agricultural production, so reducing the share of food aid that is purchased domestically would have a trivial effect on demand and no effect on prices. Recognizing that reality, the head of the American Farm Bureau Federation, Zippy Duvall, recently joined Senators Corker and Coons in an op-ed that called for modernization of food aid programs in the farm bill that Congress must pass this year.
The US shipping lobby—which benefits from requirements that at least half of US-sourced food aid must be transported on US-flagged ships—remains a stalwart opponent of sensible reform. But it’s the House and Senate Agriculture Committees that will draft the new farm bill. And with the Farm Bureau on board, this may be the last, best chance for long-time reform champions to ensure US international food aid reaches more of the people who need it most.
As donors gather next week in Rome to pledge funds to the International Fund for Agriculture Development (IFAD), they may be wondering where the United States is. During a recent debate on the floor of the US House of Representatives, Congresswoman Maxine Waters raised the possibility that the Trump administration may not make a pledge to IFAD. If true, this would represent the loss of the fund’s largest donor and could jeopardize funding from other donors this year. Given the generally high marks this independent fund earns for development effectiveness, the uncertainty around a US pledge is troubling.
In this “America First” moment, it’s worth asking when it comes to IFAD, what’s in it for the United States and what will be lost if the United States drops out?
IFAD is the only multilateral institution dedicated exclusively to eradicating poverty and hunger in rural areas of developing countries. It was established in 1977 as one of the major outcomes of the 1974 World Food Conference, which was organized in response to the food crises of the early 1970s. To date it has granted or lent about US$12.9 billion for over 1,000 agriculture and rural development programs in 124 different countries.
The need for this support is clear. According to the 2017 State of Food Security and Nutrition in the World report, for the first time since 2003 the number of chronically undernourished people in the world has increased, up to 815 million from 777 million in 2015. And the Food and Agriculture Organization estimates that keeping pace with population growth in the developing world will require a 50 percent increase in the production of food and other agricultural products between 2012 and mid-century.
Because most of IFAD’s financing is provided at highly concessional rates that low-income countries can afford, its capital must be periodically replenished in order to prevent a drop in lending capacity. Next week, the fund’s 176 members will wrap up discussions on the parameters for the eleventh such replenishment and the fund’s donors will make their pledges.
Reflecting its economic status and long-standing leadership role in the multilateral system, the United States has traditionally been the largest single contributor to IFAD replenishments. Its US$90 million pledge to the Tenth Replenishment of IFAD’s resources (2016-2018) represented 8.7 percent of the total. While significant, this share is much smaller than is the case for other international funding bodies, such as the Global Fund (33 percent) or the World Bank’s International Development Association (17 percent). Moreover, this US$90 million pledge helps leverage financing that enables IFAD to support a $7 billion program of work, representing a remarkable “leverage” ratio of almost 80 to 1.
IFAD has had a practice of complementing US bilateral assistance programs, thus magnifying the impact of USAID’s work. For example, in northern Ghana, USAID and IFAD have worked together to improve the production and distribution of maize, soya, and sorghum by smallholder farmers. IFAD, USAID, and the US Department of Agriculture have also worked together on agricultural research and pest eradication, including the highly successful eradication of the screwworm in North Africa.
Whatever reason US officials might decide to withhold a pledge from IFAD, it can’t be due to the fund’s effectiveness. In a joint CGD-Brookings assessment, IFAD outscored US bilateral assistance on all dimensions. And another recent independent assessment noted that IFAD has sound fiduciary policies and practices and is fully committed to a results agenda.
When it comes to a US pledge, the good news may be that congressional support for the fund has been very strong on a bipartisan basis over many years. Even as Congress routinely cut Bush and Obama administration requests for funding to the World Bank and other regional development banks, congressional funding for IFAD was routinely protected. More recently, the US government’s global hunger and food security approach embodied in the bipartisan Global Food Security Act (GFSA) of 2016 closely mirrors the fund’s mandate and strategic priorities. These forces could ultimately prevail upon a reluctant Trump administration to come back to the pledging table sometime this year.
But as all of IFAD’s donors meet next week, it will be important for IFAD’s allies in Congress and elsewhere to make clear that US support for the fund remains strong and any lack of pledge at the moment is a temporary problem.
Prior research on foreign investment and supply chains in emerging markets has focused almost exclusively on the creation of international networks in manufacturing and assembly. This paper extends that research, looking beyond manufacturing into supply chain creation in horticulture in developing countries.
One of the mysteries of development economics is why more people in subsistence agriculture don't migrate to cities where incomes are much, much higher. New data suggests one answer: when they move, their incomes may not go up as much as we thought.
Poverty in poor countries is largely a rural phenomenon. The original engine of development in Arthur Lewis's Nobel-winning work in the 1950s was the movement of people out of farming in pursuit of higher urban incomes, and this same movement away from agriculture remains a focus in work on structural transformation today (see CGD work by Peter Timmer and Selvyn Alkus, and others like Margaret MacMillan and Dani Rodrik's here).
The agricultural productivity gap—or the ratio of value-added per worker in other sectors compared to agriculture—is huge. A couple years ago, Doug Gollin, David Lagakos, and Michael Waugh published a paper in the Quarterly Journal of Economics systematically documenting these gaps across a sample of 151 developing countries, and found that on average, value-added per worker in other sectors was roughly three times higher than in agriculture.
Click on citations in the legend to view the cited paper.
Economists see income gaps and begin to tear up at the inefficiencies and arbitrage opportunities. As Gollin et al. wrote, if we take these gaps at face value they suggest that “by reallocating workers out of agriculture, where the value of their marginal product is low, and into other activities, aggregate output would increase even without increasing the amount of inputs employed in production.”
Maybe farmers are just different
Perhaps the most obvious explanation for income differences between farmers and non-farmers is the difference in human capital between workers in each sector. And it's true, education differences are big. But when Gollin et al. try to adjust for these schooling differences—allowing not just for differences in years of schooling, but also for actual learning measured by literacy—the agricultural productivity gap only falls from about 300 percent to about 200 percent. It's still huge.
If the potential income gains are so big, why doesn't everyone move to the city?
Enter a new paper, presented at the American Economic Association conference in Philadelphia last weekend, by Joan Hicks, Marieke Kleemans, Nicholas Li, and Ted Miguel, which attempts to resolve this mystery.
Hicks et al.’s data allows them to go a couple steps further. They measure cognitive ability more carefully than most economic surveys, and find higher-skill farmers select into migration. But perhaps more interestingly, they focus on two long-term longitudinal data sets that track migrants over many years as they move jobs between sectors. This allows them to compare the same worker—with the same education, cognitive skills, and other possibly unmeasurable attributes—in different sectors to estimate the agricultural productivity gap.
What they find is, essentially, nothing.
In Indonesia they find individuals earn about 8 percent more working outside agriculture than from farming, and in Kenya about 6 percent more. When they focus on the rural-urban divide rather than farming versus non-farming, the gap is almost precisely zero in Indonesia and about 17 percent in Kenya. Perhaps 17 percent is not trivial, but it's a very far cry from 200 to 300 percent.
Ruminating on the intellection implications for economists, Dietz Vollrath has an insightful blog post discussing the Hicks et al. paper and the broader literature, provocatively titled “The Return of Peasant Mentality.” As he notes, the modern assumption in development economics is that rural farmers are just like everyone else, i.e., rational maximizing agents, just stuck in a more challenging context. The Hicks et al. evidence suggests instead that they self-selected on measures of cognitive skills. Would we find the same if we measured risk aversion and other psychological attributes? Maybe, as Vollrath speculates, peasants really are different, as an earlier era of development scholars assumed.
So should policymakers turn away from rural-urban migration as an anti-poverty tool? (No.)
The “No Lean Season” initiative in Bangladesh has garnered a lot of attention recently for showing the large welfare benefits from encouraging rural-urban migration. A randomized trial by Gharad Bryan, Shyamal Chowdhury, and Mushfiq Mobarak offered individuals in rural Bangladesh an incentive of about $8.50 to migrate to the city for work during the hungry season. That relatively small incentive induced about 22 percent of people to move temporarily. The result is that family members who stay behind increase consumption by 30 to 35 percent, and eat 550 to 700 more calories per day.
There's a lot of space between 300 percent and zero. Even if the agricultural productivity gap overestimates the gains from moving out of agriculture, the returns to rural-urban migration may still be significant—and well worth promoting through public policy.
Bryan et al.’s RCT in Bangladesh also provides interesting answers to why more people don't migrate spontaneously: they document important roles for risk, subsistence constraints, and for learning about the returns to migration—which induced remigration for years after the treatment incentives are removed once people have gone and seen what they can earn.
Reproduced from Bryan, Chowdhury, and Mobarak (Econometrica 2014)
There's also some evidence that the returns to more permanent (as opposed to the seasonal migration in the Bangladesh study) may be higher in other places.
While Hicks et al. find very little in Kenya and Indonesia, an earlier study in Tanzania by Kathleen Beegle, Joachim De Weerdt, and Stefan Dercon find that rural-urban migrants experience consumption gains of around 30 percent (still a far cry from 300 percent). And while the results are slightly less clean for a variety of data reasons, Alan De Brauw, Valerie Mueller, and Tassew Woldehanna find much, much bigger gains from movement when tracking rural-urban migrants in Ethiopia over many years.
At a bare minimum though, this new evidence from Kenya and Indonesia suggests policymakers should be reluctant to assume that leaving the farm is better for people than they realize, and attempt to coerce movement. Here Hicks et al. invoke Tanzania's disastrous forced villagization policy of the 1970s—hopefully not a policy with many contemporary analogs, but still worth ruling out. And they also highlight that positive selection into migration (i.e., movement of higher skilled people, even on unobservable dimensions) reinforces the tendency for this ladder out of poverty to leave the least fortunate behind, which could be read as a plea not to forget rural development and social protection programs during the structural transformation process.
Should this dampen your enthusiasm for international migration? (Also no.)
While poor farmers in many developing countries are “free,” in the narrowest legal sense, to migrate to urban areas and search for a non-farming job, that's not true for international migrants, who face walls and fences and police demanding papers. With those “frictions,” it makes sense that international income gaps are larger and somewhat more robust.
In one of my favorite CGD papers, my colleagues Michael Clemens and Lant Pritchett together with Claudio Montenegro from the World Bank compare immigrants in the US to observationally identical workers (i.e., same education, age, etc.) in their home countries, and find a lower-bound estimate of an earnings increase of over $13,000 per year in PPP dollars from living and working in America.
The same biases that Hicks et al. identify in rural-urban migration apply internationally—higher-earners select into migration—but once that's accounted for, the returns remain large. Using a lottery of Tongans admitted to New Zealand, David McKenzie, Steven Stillman, and John Gibson show that naive non-experimental estimates of the income gains from international migration overstate the truth by twofold. Nevertheless, they show that randomly selected migrants still experience a 263 percent increase in income (!) one year after migrating.
In sum, there is a risk that “why don’t they just move” becomes the “let them eat cake” of 21st-century development economists. The Hicks et al. paper is perhaps a good reminder to focus on removing the barriers to people’s movement, rather than thinking we know what’s best for them. While the gains to migrants in Kenya and Indonesia appear disappointing, the centrality of structural transformation to poverty reduction in history remains uncontested. It’s not always a simple story though, and more research like this will help us understand that messy process better.
Thanks to Doug Gollin for long and patient answers to my questions, to Michael Clemens for helpful suggestions, and to Divyanshi Wadhwa for research assistance.
Members of the World Trade Organization will be meeting next week in Buenos Aires to discuss the future of agricultural and other trade policies that could have important implications for food security and jobs in developing countries (eventually). And members of the US House and Senate agricultural committees will be meeting through next year to craft a new five-year farm bill that will help shape global markets and determine how much and how quickly US food aid can be delivered to people in desperate need around the world.
Conditions in agricultural markets are not nearly so dire today as they were in the early 2000s, when prices were through the floor, or in 2007-08, when prices doubled and tripled in just a few months. But extreme poverty around the world remains primarily a rural problem and agriculture provides employment for half or more of the people in low- and lower-middle-income countries. And the conditions creating the continuing need for food aid in conflict-ridden areas in Africa and the Middle East are more desperate than at any time in recent memory. That makes the urgency of reforming the US program to make it more responsive and less expensive even greater.
For those interested in these issues and in the implications for the poor and food insecure in developing countries, there are a number of new resources to check out. My recent CGD book, Global Agriculture and the American Farmer: Opportunities for US Leadership, shows why and how agriculture is important to developing countries, and how US (and other) policies affect global agricultural markets. It suggests ways that WTO members could revive their efforts to ensure that these policies are not to the detriment of poor farmers in developing countries. The accompanying brief focuses on a few priorities to make the farm bill less costly for American consumers and taxpayers, as well as the rest of the world, including removal of the in-kind and cargo preference policies hampering food aid deliveries. In other chapters of my book, I focus on US agricultural policies mostly outside the farm bill that undermine global public goods, including biofuels and climate change, and antibiotic use in livestock that contributes to the spread of drug-resistant superbugs.
I also had the pleasure of being a discussant this fall at the launch of two projects hosted by the International Food Policy Research Institute (IFPRI). In an edited volume for IFPRI, Antoine Bouёt, David Laborde, and colleagues provide incredible depth and detail on how the WTO tried to put disciplines on agricultural protection and support in the Doha Round of trade negotiations, with a focus on implications for developing countries. The authors in this volume also look at issues that emerged as a result of the food price spikes in 2007-08, including the role of export restrictions in exacerbating price volatility and of public food stocks and crop insurance in managing volatility.
The second project, involving IFPRI senior research fellow Joe Glauber (also the former chief economist of the US Department of Agriculture) and coordinated by American Enterprise Institute fellow Vincent Smith, takes an in-depth, and critical, look at a dozen farm bill issues. Among those of most interest for developing countries are papers proposing significant reforms to the food aid program (similar to what I recommend in my book and brief) and elimination of import protection and price support for US sugar cane and beet growers.
If you’re interested in the short versions of these resources, the podcast of my conversation with CGD’s Rajesh Mirchandani about my book is here, and video of the two IFPRI events is here and here. The International Centre for Trade and Sustainable Development also has a series of briefings on key WTO ministerial issues here, and will be providing updates from Buenos Aires.
For more on this topic—my colleague Ian Mitchell has written a post exploring key issues where WTO action next week could help prevent future food price spikes. Lots of food for thought!
With a decade since the beginning of the major food price spike in 2007, Ministers gathering at the WTO Ministerial in Buenos Aires this week can make a positive impact on people's lives—with an agreement that will reduce the likelihood and impacts of a food price spike.
Higher global food prices can be helpful to developing countries who are often net food exporters, but unexpected spikes push millions of poor consumers into hunger as supply takes time to respond.
Can Ministers repair the roof while the sun is still shining?
A decade on from the 2007 price spike
It’s exactly 10 years since the beginning of the 2007 global food price spike. That spike more than doubled the price of cereal commodities relative to 2000 and, although exact estimates are difficult, the World Bank estimates this pushed tens of millions into under-nourishment globally. In more developed countries too, these spikes added unnecessarily to inflation, making consumers everyone worse off.
That crisis led to several actions by the G20—it instigated the Agricultural Markets Information System to improve information on markets, and avoid panic-driven export bans; it launched GEOGLAM to use satellite data (I never miss a chance for a GEOGLAM map, see below); and in their Communique Ministers agreed to exempt purchases by the World Food programme from “export restrictions or extraordinary taxes.” These were sensible steps forward and, alongside addressing longer-term structural issues, Trade Ministers in Nairobi helpfully agreed to eliminate subsidies on exports (these usually lower prices, but can push them up when removed sharply, as the EU did in the 2007 spike).
Food price outlook: the sun is shining
Global food prices have been relatively stable and on a downward trend since their peaks in 2011. This reflects the market responding to higher prices, lower energy prices, and increasing productivity. There are no immediate indications (see chart below) of the conflation of factors that led to the 2007 and 2011 spikes.
However, a food price spike is always a possibility. The OECD and UN FAO have suggested “a high probability of at least one severe shock to international markets within the next ten years.” Indeed, with a lower commitment to open trade from the US and perhaps others, in an increasingly volatile climate, disruption in agriculture could more quickly lead to nationalistic, and often foolish, policy responses like export bans that were a (and in my view the) major factor in the previous spikes (for more on the effects of agricultural markets on the poor and food insecure in developing countries, check out my colleague Kim Elliott's new blog post).
What can Trade Ministers do about food price risk?
These would put a ceiling on trade-distorting agricultural subsidies, and reduce the risk that countries regress into a fruitless “arms race” of subsidising their sectors to compete. Agreement would help keep subsidy focussed in non-distorting areas including funds for public good areas like R&D which are important to resilience and productivity.
2. Public stock holding
This is a long-standing problem—India, in particular, want to buy stocks from their farmers at minimum prices which, if above market prices, can be distortive. Whether this exception can be resolved or extended is a key sticking point. WTO rules don’t prevent domestic food aid to the poor or stock-building providing they are at market prices. Still, public stocks are not usually the food security insurance they may appear to be—often, they are just support to the agricultural sector, or perhaps a second-best to social safety nets, rather than being designed to alleviate food shortages and hunger.
3. Transparency and simplification
The United States have proposed stronger action for members that are persistently late in their reporting requirements. The proposed penalties are seen by many as disproportionate and possibly even counterproductive but the aim is a good one. Tunisia have proposed all tariffs should be expressed as a share of product value (rather than complex forms which depend on weight, etc).
4. Reducing fisheries subsidies
It’s clear that by subsidising fisheries, countries are exacerbating the incentives to over-fish, and storing up trouble for later as stocks decline.
In addition to these areas, there are other potential areas of valuable progress—including on Cotton, and on ensuring the Nairobi agreement on ending export subsidies is actionable.
Each of these reforms are valuable in their own right, but the improvements to the food system would also make it more resilient.
Current status of negotiations
Some WTO-watchers think the chances of a deal appear unlikely although there is pressure to make progress under the zero hunger goal (2b) to “correct and prevent trade restrictions and distortions.” There are a number of sticking points, for example, on whether agricultural subsidy limits should be measured in absolute terms, or as a proportion of production. Similarly, India’s public food stock-purchase position has long-been unyielding. Still, as one official put it in Geneva recently, “nearly all successful negotiations look unlikely until the last minute.”
Making global trade relevant to people’s lives
Benign global crop conditions mean that this is a good time to address structural issues. Taken together, alongside their other benefits, an agreement in Buenos Aires would mark another important step forward in addressing the inherent and climate-driven unpredictability of agricultural production and reducing the potential impact and likelihood of food price spikes.
So often, international agreements and G20 negotiations seem remote from peoples’ day-to-day lives. But with an agreements that avoid food price spikes and the hunger and inflation they bring, Ministers attending the WTO have a great chance to demonstrate they are making a difference in people’s lives.
Earlier this month the US Treasury’s top international official announced at a congressional hearing that he would like to see the Global Agriculture and Food Security Program (GAFSP) “wound down.” Not only would the United States no longer make contributions to the fund, but Treasury Undersecretary David Malpass indicated that he wants other GAFSP donors to end their contributions as well, arguing that the fund is duplicative and donors could channel their support through other institutions and funding sources.
This view, at first glance, is not crazy given the proliferation of development trust funds in recent decades, many of which operate with little scrutiny or evidence of impact. But scratching beneath GAFSP’s surface, there are good reasons to be concerned about the potential loss of this particular trust fund. And for those very reasons, it seems unlikely that the other GAFSP donors will be so quick to follow the US lead.
Before examining GAFSP’s merits, it’s worth understanding the history of this relatively young fund. Ten years ago, food prices in developing countries soared to unprecedented levels, resulting in riots that threatened governments as well as social stability around the world. Massive public protests erupted in countries ranging from Haiti to Egypt to Senegal. World Bank President Robert Zoellick predicted at the time that surging food costs could mean "seven lost years" in the fight against worldwide poverty.
Admirably, the international community stepped up to address the challenge. In April 2008, the World Bank and the International Monetary Fund announced a series of measures aimed at mitigating the crisis, including increased loans to African farmers and emergency monetary aid to badly affected areas. UN Secretary-General Ban Ki-moon established a High-Level Task Force on the Global Food Security Crisis that developed a Comprehensive Framework for Action to enhance global food security efforts.
And at the 2009 G8 Summit in L’Aquila, Italy, leaders endorsed a Global Food Security Initiative to help fill agricultural financing gaps in the poorest countries in the world. GAFSP was a core element of this initiative. The United States government was the leading architect of the GAFSP trust fund, and in full disclosure, I played a role in creating the fund as a US Treasury official at the time.
So, even if GAFSP’s historical context is compelling, why does it continue to hold merit today? I see at least three reasons.
1. There continues to be large unmet need for financing agriculture investments in poor countries.
According to the 2017 State of Food Security and Nutrition in the World report, for the first time since 2003 the number of chronically undernourished people in the world has increased, up to 815 million from 777 million in 2015. Moreover, the global population is projected to grow from some 7.3 billion to almost 9.8 billion by 2050, with most of that increase coming in the developing regions. In low-income countries, the population may double to 1.4 billion. According to the Food and Agriculture Organization, feeding humanity will require a 50 percent increase in the production of food and other agricultural products between 2012 and mid-century.
Donor financing does not appear to have kept pace with the need. OECD statistics show that the share of bilateral official development assistance devoted to agriculture production was the same in 2015 (4.3 percent) as it was in 2008. The World Bank, the largest single source of development finance, approved over US$5 billion in agriculture and rural development financing last fiscal year, but this is the lowest level since 2011 and well below the peak of US$8.3 billion in 2009. The GAFSP remains the only multilateral vehicle that targets funding for agriculture and rural development in the poorest countries.
Rather than provide money to any country that demonstrates a need, a steering committee agrees to funds proposals that are chosen for rigorous measures of quality through a competitive process; in the most recent round for selecting public sector projects, just seven of the over twenty proposals were funded. To enhance the selection process, a panel of (unpaid) independent technical experts recommends which proposals should be funded. And, unlike traditional multilateral mechanisms, the GAFSP steering committee is composed of representatives of donors, recipient countries, implementing agencies, and civil society. Monitoring and evaluation of projects is at the forefront of project design and funding decisions, and randomized control trials (RCTs) are incorporated into many project designs.
3. GAFSP is delivering results.
Initial findings from the RCTs of early GAFPS projects are starting to come in and they are very encouraging. For example, in the Integrated Agricultural Productivity Project in Bangladesh, an RCT found that during 2014–2016 income levels of project households cultivating crops and fisheries increased by 15 percent and 37 percent, respectively, compared to non-project household. Similarly, in Rwanda, an RCT reported an 11 percent gain in the value of harvest and a 28 percent gain in the value of sales, respectively, during one season (September to February), and in target irrigated areas, productivity increased by 423 percent. In Cambodia, a government-led, nonexperimental impact evaluation found an 85 percent income gain.
By focusing on agriculture investments, the GAFSP also plays a major role in increasing median incomes in low-income countries by pulling people out of poverty. Investments in agriculture are estimated to be two to four times more effective in reducing poverty than growth generated from other sectors. Not only does improving agricultural productivity make more food available in rural communities, where 70 percent of the world’s poor live, it also provides a sustainable source of income for people with limited opportunity.
So what’s next for GAFSP? The Trump administration has already made clear that it will no longer be contributing to the multi-donor trust fund created by its predecessor. Unfortunately, the administration isn’t satisfied to leave it at that and is now calling on other GAFSP donors to end their contributions to the fund. If GAFSP were an abject failure, such a stance might be met favorably by the other donors, marking the last gasp for GAFSP. But the fund counts among its top donors actors who place a high value on evidence-driven investments, including the Bill & Melinda Gates Foundation and the Canadian, Dutch, German, and British governments. I doubt very much that these donors will be so quick to walk away from such an unambiguous success.
And with time, perhaps the current administration will reconsider its misguided stance on this innovative fund. One prod in this direction just might be a multilateral aid review, which appears to be gaining momentum in the Senate and would introduce an evidence-driven process for evaluating the relative value of the various contributions the United States makes to multilateral institutions.
“There are better ways to improve test scores,” “food is expensive,” “most kids would eat anyway,” and other counterarguments contain some truth, but fail to overturn the basic economic logic of free, universal school feeding in poor countries.
Back in February I visited Tassah Public School in rural Bong county, Liberia. It had several nice classroom buildings arrayed in a big open field, and the teachers were all there to meet us. But there weren't very many kids, which was apparently normal. I sat in on a fifth grade English class with just two students. Enrollment had fallen from 360 students down to just 175 this year, and nobody could tell us why. The principal said some children had to walk three hours through the bush to get there. Being sort of a jerk, I persisted. “Wasn't that true last year as well? The school didn't move, did it?” I got the blank stares I deserved.
Finally, one of my colleagues asked the right question: “Do you have a school feeding program?”
“We used to,” the principal said. (I'm paraphrasing a bit here; my field notes are rough.) But the NGO that ran the program had closed it this year. And when the food left, the kids left. “By midday they're hungry and lose interest” he told us, “and now that there's no food, some just don't come.”
The world is full of hungry kids, not learning anything in school
Earlier this year the UN's Food and Agriculture Organization announced that hunger is rising globally for the first time this century. Admittedly, those numbers are shaky, and the uptick is driven somewhat by acute crises in places like Yemen and South Sudan. But there are broader signs that the world is not on an easy march to eradicating hunger. For instance, the data on child malnutrition rates are based on household surveys rather than macro models of the food supply, so they are somewhat more reliable than hunger numbers. They reveal a long-term global decline in malnutrition rates, but also a rising absolute number of malnourished children in sub-Saharan Africa over several years—which represents more than just a blip or a bad harvest.
At the same time, the World Bank's new 2018 World Development Report focuses on the “learning crisis“ in the developing world. Teachers are underprepared and often absent, basic materials are missing, and schools are poorly managed. As a result, children in many countries go to school for years and emerge functionally illiterate.
One shouldn't draw too strong a link here. These twin crises of growing hunger and low learning have distinct causes, even where they overlap geographically. But a problem's solution doesn't need to be a mirror image of its cause, and school feeding may help make progress on both fronts.
As with any public policy, the case for school feeding rests on its effectiveness, affordability, and—a dimension that is particularly acute in fragile states—its feasibility.
Aren't there better ways to improve learning outcomes?
If you survey the research on how to improve learning outcomes in developing countries, you'll find the reviews disagree on what works best, but few put much emphasis on food.
As Dave Evans and Anna Popova at the World Bank note in that link, some reviews declare pedagogical interventions the clear (albeit vaguely defined) winner, while others highlight computers and technology. JPAL, an organization that specializes in RCTs in poor countries, has put a big emphasis on hiring contract teachers to run remedial lessons targeted at students' ability level.
Evidence on the effectiveness of school feeding is more promising than this summary might suggest though.
First, food keeps kids in school. As Harold Alderman and Don Bundy note in the World Bank Research Observer (2011), “numerous studies show that in-school feeding has a positive impact on school enrollment or participation in areas where initial indicators of school participation are low.” The graph below shows results from all the available studies we could find (drawn mostly from earlier reviews here, here , here, here, here, and here).
Second, food facilitates learning. Quoting Alderman and Bundy again, “Improved performance as measured by tests of achievement is often reported for [school feeding programs], although there is a fair amount of variance as to which ages and which skills are most affected.”
Beyond its effectiveness, a potential selling point of school feeding is its feasibility. Abysmal learning levels and chronically absent teachers highlight that many poor countries simply can't deliver basic education to the bulk of their populations. But experiences from India to Mozambique suggest that even weak states—sometimes with the help of aid donors—can successfully deliver meals to millions of kids. Writing about India's massive school feeding program, Abhijeet Singh notes:
All of this suggests that governments might do more good for more kids if they reallocated money away from some current activities that rank high on the global development agenda in education—including purchasing laptops and even (gasp) raising teacher salaries—in order to feed kids.
Won't a universal school lunch program end up feeding a lot of kids who would eat anyway? Sounds inefficient and wasteful.
A shockingly high share of kids actually won't eat anyway. Back in 2004, Farzana Afridi measured children's nutrition intake over the previous 24 hours in Madhya Pradesh communities served by India's national school meals program, and randomly assigned children to be interviewed so that the recall period would or would not fall on a school day. She found that on average children's nutrient consumption went up on school days by the equivalent of 50 percent to 100 percent of the nutrients in school meals—with no such difference for children in schools where the program wasn't operating. Free food was additional food.
It's not just in India that school meals seem to provide nutrition that kids wouldn't get anyway. In both Kenya and Jamaica (see references in chart), school feeding led to significant weight gain for children and some evidence of increased height. Research in China focused not on school meals per se, but found that randomly assigning nutrition supplements to school children raised hemoglobin levels (confirming a nutritional deficit was present that wouldn’t be met otherwise) and contributed to significant learning gains. (Notably, other research in China shows that nutrition supplements outperformed the government’s policy of one egg per child in school.)
But even if some “undeserving” kids will get free lunch in a universal program, there are good reasons to make any such program universal.
Targeting or “means testing” opens a dangerous can of worms. The state in low-income countries often lacks the capacity to target social programs effectively. In proposing a universal basic income, the Indian Ministry of Finance noted that many current anti-poverty programs are so mis-targeted that they cease to be progressive at all. When the central government lacks the information to target objectively, a common response is to devolve that job to local officials. But giving local politicians the discretion to pick beneficiaries opens them up to corruption and clientelism.
Universality may also be good politics. Political support for anti-poverty and social protection programs often hinges on the participation of the middle class, and simple models of rational voters suggest proposals of targeted anti-poverty programs may lead to lower transfers to the poor than universal proposals.
Is universal school feeding really affordable?
According to the World Food Program, school feeding costs an average of about $56 a year per child in poor countries, rising to about $370 in upper-middle and high-income countries. Poor countries only spend about $82 a year on basic education, so adding meals would be a non-trivial increase in percentage terms in some contexts. Note, however, that some of the biggest programs, like India's, cost just a fraction of this, at about 3 cents per child per day.
Financing universal school meals is a serious obstacle. But it's worth noting that the sticker price may seriously exaggerate the true social cost of these programs. Consider two extreme scenarios.
If households would fill in the gap and kids would eat just as much without school meals, then the social cost of school feeding is only the extra expense of public provision, over and above what households would have spent otherwise. At a dollar a week to feed kids lunch, it's not at all clear that public provision of food costs more than private provision. No study I've seen to date can reliably answer this question, but it seems school feeding could very well be cost saving. The WFP notes that even in the most expensive large school feeding programs, the cost of administration and delivery is about 20 percent of the total, and government food subsidies lower the price of food for non-beneficiaries.
Alternatively, consider the other extreme scenario in which all school feeding is additional, which is closer to what Afridi found in India. In this case the social cost of school feeding is higher—we're spending money that wouldn't have been spent otherwise. So be it. To most audiences, the moral and policy case for school feeding is stronger, not weaker, in this scenario, if the counterfactual is that children go hungry.
State capacity and basic needs trump Econ 101
When I took Econ 101 in Lincoln, Nebraska, we learned that education has positive externalities that justify government intervention, while food staples are commodities that can be efficiently traded on private markets. Lincoln is a town full of high-quality Midwestern public schools, surrounded by private commercial farms producing more corn than America knows what to do with. The world around me looked like my textbook.
Rural Liberia does not look like my Econ 101 textbook. State capacity to deliver basic services and households' urgent need for food are much more important considerations than addressing externalities. Even if food markets functioned perfectly, many households simply lack the means to buy or grow enough food to feed their children. The cash-strapped government does little to help them. Public efforts to provide basic schooling have mostly failed. As of 2015, net primary enrollment was 37 percent and three-quarters of adult Liberian women who had gone to six years of primary school were still illiterate. Meanwhile, 32 percent of their kids are stunted, a sign of severe malnutrition.
Fixing Liberia's schools is an intellectual and political juggernaut. Feeding kids isn't.
Afridi, F. (2010). Child welfare programs and child nutrition: Evidence from a mandated school meal program in India. Syracuse University.
Du, X., Zhu, K., Trube, A., & Hu, X. (2006). Effects of school-milk intervention on growth and bone mineral accretion in Chinese girls aged 10-12 years: accounting for cluster randomisation. British Journal Of Nutrition, 1038-9.